Early Votes Favor Musk’s Tesla $5B Investment in xAI

Elon Musk has published a poll on social media platform X asking users if Tesla should invest $5 billion in his artificial intelligence business xAI. Early votes suggest most are in favor

Musk stated that the poll was conducted to “test the waters,” as it was performed immediately following Tesla’s lowest profit margin in five years, which was attributed to price cuts and increased spending on AI projects. He also stated that board approval and shareholder vote are required.

Musk stated during Tesla’s earnings conference call that xAI would be “beneficial in the advancement of full self-driving and the construction of the new Tesla data center.” He also mentioned the opportunities to integrate xAI’s chatbot, Grok, with Tesla’s software.

Approximately 386,000 individuals participated in the poll within three hours of its posting, with 70% of respondents supporting the investment.

Musk, the world’s wealthiest individual, established xAI last year to develop an alternative to ChatGPT. In May, the startup secured $6 billion in series B financing, resulting in a post-money valuation of $24 billion. Sequoia Capital and Andreessen Horowitz are among the investors.

Musk has previously stated that he intends for a quarter of xAI, previously known as Twitter, to be owned by investors in X. Even though the social media firm’s value has plummeted since then, Musk purchased it for $44 billion.

Musk also dismissed concerns that he may be allocating resources from Tesla to some of his other companies during the earnings call.

In June, CNBC reported that he had placed an order with Nvidia (NVDA.O) to facilitate the shipment of thousands of AI processors to Tesla, xAI, and X. Musk stated that Tesla’s data center was already at capacity and that there was no additional space to store the processors.

On X, Musk is a frequent poller. In 2021, he conducted a Twitter poll to determine whether selling 10% of his Tesla stake would be advisable. A few days later, he began selling shares.