Daijiworld Media Network - San Francisco
San Francisco, Nov 8: A proposal urging Tesla Inc. to authorize an investment in Elon Musk’s artificial intelligence startup xAI failed to gain approval, clouding prospects for the carmaker to take a formal stake in the venture.
According to a regulatory filing released late Friday, the nonbinding measure received 1.06 billion votes in favor and 916.3 million votes against, while 473 million shareholders abstained — the highest abstention count for any proposal this year. Under Tesla’s bylaws, abstentions are counted as votes against, leading to the proposal’s rejection.
Though the motion was advisory, Tesla’s General Counsel Brandon Ehrhart said the board will review “next steps in light of the level of shareholder support.”
Elon Musk, who has been advocating the move, earlier floated a $5 billion investment plan last year to bolster Tesla’s AI ecosystem through xAI. The two companies already share close business ties — xAI spent nearly $200 million on Tesla’s Megapack batteries in 2024, and Tesla has integrated xAI’s chatbot, Grok, into its vehicles.
In its proxy statement, Tesla noted that Musk was working on “innovative processes” at xAI that might not align entirely with Tesla’s mission and therefore “should not be built using Tesla’s resources.” However, it also acknowledged that Musk’s AI ventures “could advance autonomous decision-making and real-world adaptability,” benefiting Tesla’s self-driving and robotics projects.
Tesla Chair Robyn Denholm, speaking to Bloomberg, said xAI’s work was “very overarching,” focusing broadly on AI development, while Tesla remained committed to “real-world energy and transport applications.”
An investment in xAI would have further intertwined Musk’s vast business empire — which already includes SpaceX, Tesla, and X (formerly Twitter). Musk has merged xAI with X, using social media posts from the platform to train AI models and distribute Grok through it.
xAI is currently raising $20 billion in debt and equity, reportedly from investors such as Nvidia Corp., to fund large-scale data centers and chip infrastructure, including a new facility in Memphis.
The failed vote underscores shareholder caution over Musk’s overlapping business interests even as AI continues to play a growing role in Tesla’s future strategy.