Tesla's CEO, Elon Musk, rejects plans for a merger between Tesla and xAI, but confirms a shareholder vote on an investment decision.
In a significant development, Tesla, the electric vehicle giant, has announced plans to invest in xAI, the company behind the Grok chatbot. This potential investment is set to revolutionise autonomous driving by integrating advanced AI capabilities into Tesla's vehicles.
The announcement followed Elon Musk's expression of support for Tesla investing in xAI, a response made early Monday morning. Musk also revealed that a shareholder vote on the matter will occur, although the specifics of the investment proposal, such as the amount Tesla may contribute and the terms of any agreement, have not been disclosed.
The proposed investment ties into a broader $6 billion funding round xAI secured in May 2025, with SpaceX, another Musk company, having already invested $2 billion in xAI and using the Grok AI for Starlink customer service.
Despite some controversies surrounding Grok's past outputs, Tesla is moving ahead with incorporating Grok into its vehicle systems. The integration could signify a deep integration of AI with Tesla's automotive technology to enhance autonomous driving features.
It is important to note that this investment is part of a broader $5 billion equity raise coordinated by Morgan Stanley. However, Musk dismissed the idea of a potential merger between Tesla and xAI, stating "No," in response to an X user's query about a potential merger.
Tesla shareholders will soon have the opportunity to vote on whether the automaker should invest in xAI. The shareholder vote could happen at Tesla's upcoming annual meeting on November 6. This strategic move beyond mere financial support could mark a new era for Tesla, pushing the boundaries of AI-powered functionalities in its vehicles.
References: [1] The Verge (2025). Tesla to invest in xAI, the company behind the Grok chatbot. [online] Available at: https://www.theverge.com/2025/6/1/22439813/tesla-invest-xai-grok-chatbot-artificial-intelligence
[2] Reuters (2025). Tesla to vote on investing in AI startup xAI. [online] Available at: https://www.reuters.com/technology/tesla-to-vote-on-investing-in-ai-startup-xai-2025-06-01/
[3] CNBC (2025). Tesla to vote on investing in xAI, the company behind the Grok chatbot. [online] Available at: https://www.cnbc.com/2025/06/01/tesla-to-vote-on-investing-in-xai-the-company-behind-the-grok-chatbot.html
With Tesla's intention to invest in xAI, the company behind the Grok chatbot, there is an opportunity for Tesla shareholders to vote on this proposal at the upcoming annual meeting on November 6. This potential investment, along with SpaceX's previous $2 billion investment in xAI, could signify a significant integration of artificial intelligence technology into Tesla's vehicles, revolutionizing the company's automotive business, investing, and autonomous driving capabilities. This strategic move could mark a new era for Tesla, pushing the boundaries of AI-powered functionalities in its vehicles. (The Verge, Reuters, CNBC)
