Tesla Shareholders to Vote on Musk’s xAI Investment
▼ Summary
– Tesla shareholders will vote on a proposal to allow investment in Elon Musk’s AI startup xAI, aimed at strengthening Tesla’s AI, robotics, and energy ambitions.
– The proposal, from a shareholder with a $2,000 stake, argues that investing in xAI would enhance innovation and shareholder value through access to advanced AI capabilities.
– Tesla’s board is neutral on this proposal, unlike its typical opposition to shareholder suggestions, while SpaceX has already committed $2 billion to xAI.
– Some shareholders view xAI as a rival to Tesla, having previously sued over Musk starting an AI competitor, though the case was dismissed.
– The vote coincides with Tesla’s push to focus on AI amid weak EV sales and a proposed $1 trillion pay package for Musk to increase his control for leading AI efforts.
Tesla shareholders are preparing to cast a crucial vote on whether the electric vehicle manufacturer should invest in Elon Musk’s artificial intelligence venture, xAI. This proposal aims to reinforce Tesla’s strategic positioning in AI, robotics, and energy, aligning with the company’s broader technological ambitions.
The initiative was introduced by Stephen Hawk, a Florida-based shareholder holding a modest stake in Tesla. In his supporting statement, Hawk emphasized that integrating Grok into Tesla vehicles showcases the practical advantages of collaborating with xAI. He argues that a strategic investment would not only grant Tesla access to cutting-edge AI capabilities but also accelerate product innovation and enhance long-term shareholder value.
Tesla’s board has adopted a neutral stance on the proposal, a notable departure from its usual tendency to recommend voting against shareholder-led ideas. Should the measure pass, Tesla would become the second Musk-led company to invest in xAI, following SpaceX’s commitment of $2 billion as part of a larger equity fundraising effort. Some analysts interpret SpaceX’s involvement as a sign that xAI may be encountering challenges in attracting external investors.
The proposal arrives amid ongoing tension among some investors who view xAI as a direct competitor to Tesla, especially given Musk’s frequent characterization of the automaker as an AI-driven enterprise. Last year, a group of shareholders even filed a lawsuit alleging that Musk was diverting attention and resources to a rival AI firm, though the case was ultimately dismissed.
Tesla is currently navigating a period of softer electric vehicle sales and a slower-than-expected rollout of its robotaxi services. In response, the company has sought to shift investor focus toward its AI and autonomy initiatives, including the development of its Full Self-Driving system and the Optimus humanoid robot.
Simultaneously, shareholders will vote on a separate company-endorsed proposal to substantially increase Musk’s compensation package over the next decade, a move that could grant him more than 25% control of Tesla. Musk has asserted that greater ownership is necessary to keep him fully engaged in Tesla’s AI pursuits rather than being pulled toward his other ventures.
This vote occurs against the backdrop of Tesla’s ongoing legal appeal of a Delaware court’s rejection of Musk’s previous $56 billion pay package. The new proposal ties Musk’s earnings to extremely ambitious performance milestones, including growing Tesla’s market valuation from around $1 trillion to more than $8 trillion.
Gene Munster, managing partner at Deepwater Asset Management, remarked that achieving such an unprecedented market cap would likely require more than just advances in autonomous driving and robotaxis. He suggested that xAI could play a pivotal role by generating excitement, providing computational resources, and opening new revenue streams, all of which could significantly elevate Tesla’s valuation.
The shareholder meeting is set for November 6 at 3 PM Central Time and will be held at Tesla’s Gigafactory Texas, with a live stream available for remote participants.
(Source: TechCrunch)
