FYI: Elon Musk is contemplating a $5 billion investment from Tesla into his AI startup, xAI, pending approval from Tesla’s Board of Directors.

Elon Musk to Discuss $5 Billion xAI Investment with Tesla Board of Directors

Elon Musk is exploring the possibility of Tesla investing $5 billion into his burgeoning artificial intelligence company, xAI. This idea was floated following a social media poll conducted on platform X, which drew considerable attention.

Shareholder Approval Needed

The topic came up during Tesla’s Q2 2024 earnings call, when Musk was questioned about Tesla potentially investing in xAI and the integration of Grok, xAI’s prominent AI technology, into Tesla’s system. Musk emphasized that while Tesla has already benefited from collaborations with xAI—particularly in advancing full self-driving capabilities and the development of Tesla’s new data center—any formal investment would ultimately require approval from Tesla’s shareholders.

"I should say Tesla is learning quite a bit from xAI. It’s been actually helpful in advancing full self-driving and in building up the new Tesla data center," Musk remarked. "Regarding investing in xAI, I think we need to have shareholder approval of any such investment. I think we need a vote on that."

Social Media Poll Results

To gauge public opinion, Musk instituted a poll on social media platform X. The poll garnered significant participation, amassing 958,086 votes. A decisive 67.9% voted in favor of the investment, while 32.1% opposed it. The comments on the poll indicated substantial support from the Tesla community, though it should be noted that votes from non-shareholders could also have influenced the results.

Reflecting on the poll’s outcome, Musk mentioned in a subsequent post that he’d bring the idea to the Tesla Board of Directors. "Looks like the public is in favor. Will discuss with Tesla board," he wrote.

xAI: Rising Fast

Though xAI is the newest of Musk’s enterprises, it has already made notable strides. Recently, Musk announced the activation of xAI’s supercomputer cluster in Memphis, Tennessee, featuring 100,000 Nvidia H100 GPUs. This significant computational resource gives xAI a robust platform for AI training and development.

Musk praised the collaborative effort that enabled the supercomputer’s launch. "Nice work by xAI team, X team, Nvidia team, and supporting companies getting Memphis Supercluster training started at ~4:20 a.m. local time. With 100k liquid-cooled H100s on a single RDMA fabric, it’s the most powerful AI training cluster in the world! This is a significant advantage in training the world’s most powerful AI by every metric by December this year," Musk shared in another post on X.

As xAI continues to grow and attract top talent, Tesla’s potential $5 billion investment could significantly bolster its resources and capabilities, driving further innovation in AI technologies beneficial to both companies.

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Article by William Kouch, Editor of Automotive.fyi