Tesla’s board of directors will deliberate on whether to invest in Elon Musk’s artificial intelligence company, xAI, after shareholders expressed support for the proposal during Thursday’s annual meeting — the same event where they reapproved Musk’s $1 trillion pay package.
While a majority of shareholders voted in favor of investing in xAI, a significant portion abstained, leaving the decision as non-binding but symbolically powerful.
“Since this is an advisory vote, the board will examine the next steps in light of this level of shareholder support,” said Tesla’s General Counsel Brandon Ehrhart while announcing the results.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
The potential partnership marks the latest chapter in Musk’s growing web of interlinked ventures, often referred to as “The Muskonomy.” The entrepreneur’s companies — Tesla, SpaceX, Neuralink, The Boring Company, and xAI — have increasingly shared talent, resources, and strategic objectives, blurring the boundaries between them.
Musk, who founded xAI in July 2023, has made no secret of his preference for tighter integration among his firms. Musk teased the idea earlier this year in a poll. He had asked, “Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors?” Over 67% of responders voted yes. He, however, admitted that it’s up to shareholders.
xAI has quickly become one of Musk’s most valuable startups. The company, which created the Grok chatbot integrated into X, has raised more than $12 billion and reached a $50 billion valuation by mid-2024. It positions itself as a direct competitor to OpenAI, Anthropic, and Google DeepMind, with a focus on developing AI systems that, in Musk’s words, “seek to understand the universe.”
An investment from Tesla would add another financial link to Musk’s growing corporate ecosystem. In March, xAI acquired X in an all-stock deal valuing the two companies at $80 billion and $33 billion, respectively. Earlier in the year, SpaceX also announced plans to invest $2 billion in xAI, bolstering its AI capabilities for autonomous systems and data analysis.
Some shareholders have embraced the idea of Tesla joining that circle. “Tesla has always been an AI company revolutionizing transportation, energy, and robotics through FSD and Optimus,” said Stephen Hawk, the investor who introduced the xAI investment proposal. “Let’s not outsource our destiny, but rather own it and maintain power, control, and safety.”
Still, concerns persist about potential conflicts of interest. Musk’s past deals have drawn scrutiny from regulators and investors alike. In 2016, Tesla’s $2.6 billion acquisition of SolarCity — a company founded by Musk’s cousin and chaired by Musk himself — led to a lawsuit alleging self-dealing and misuse of corporate funds. Although a Delaware court ultimately ruled in Musk’s favor in 2022, critics argue that SolarCity’s troubled integration delayed Tesla Energy’s profitability for years.
If Tesla’s board decides to proceed, the amount of the investment will be determined internally. Analysts say such a move could deepen Tesla’s AI expertise but also increase governance risks.
Tesla’s value is believed to increasingly rest on its software and AI prowess, not just cars, and a tie-up with xAI could strengthen its position, though it also raises old questions about Musk’s overlapping interests and where Tesla’s priorities truly lie.