Musk Polls X Followers on Investing $5 Billion in xAI Through Tesla
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Elon Musk Tests Waters for $5 Billion Tesla Investment in AI Startup
Elon Musk recently posed a question to his followers on X, exploring the possibility of Tesla Inc. investing a substantial $5 billion into his artificial intelligence startup. This move comes on the heels of Tesla's report of a fourth consecutive quarter of unsatisfactory profits. During an earnings call, Musk was queried about Tesla potentially investing in xAI or incorporating the Grok chat bot into its software.
Musk disclosed that Tesla has been gleaning significant insights from xAI, which have proven beneficial in advancing its Full Self-Driving capabilities and the development of a new Tesla data center. Expressing his support for the investment idea, Musk emphasized that such a move would require shareholder approval. To gauge the sentiment, he conducted a poll on the topic the subsequent Tuesday.
xAI's Financial Milestones and Future Prospects
Established in 2023, Musk's xAI has already made notable financial strides, successfully raising approximately $6 billion in a recent funding round. This fundraising effort pegged the AI startup's valuation at around $18 billion prior to any prospective investment. Prominent backers in this round included Sequoia Capital and Andreessen Horowitz, marking it as one of the largest investments in the burgeoning generative AI sector.
External Valuation and Conflict of Interests
In line with Musk's stipulations, any future deal's valuation would need to be determined by credible external investors. This requirement underscores the importance of transparency and fair market practices in such high-stakes financial moves. However, Musk's extensive involvement with multiple ventures, including overseeing six companies, has led to criticism regarding potential conflicts of interest.
An example of such scrutiny emerged in June when Musk acknowledged diverting scarce AI chips from Tesla to his other ventures, X Corp. and X.AI Corp. This revelation has added a layer of complexity to the discussion around Tesla's potential investment in xAI, highlighting the intricate balance Musk must maintain between his various business interests.
