Tesla CEO Elon Musk announced over the weekend that shareholders of his EV maker Tesla will vote on whether to invest in his own artificial intelligence firm xAI.
In other words, the mercurial billionaire is orchestrating a potentially massive shift in funds to prop up his cash-burning — and gas-burning — AI startup, the flagship product of which is the troubled chatbot Grok.
In March, Musk merged xAI with his social media platform X, which had previously seen an advertiser exodus triggered by his embrace of far-right extremism and disregard for content moderation.
Behind the scenes, it's unlikely that either arm of the company — social media or AI — is making very much money in the grand scheme of things. Enter Musk's plan: siphon money from one business to another.
And it's not just Tesla, either. On Saturday, the Wall Street Journal reported that Musk was pumping $2 billion from his space company SpaceX into xAI, almost half of the startup's recent equity raise.
Since Tesla is a publicly-traded company, though, Musk will need to convince his shareholders to support the bailout.
"It’s not up to me," Musk tweeted on Sunday. "If it was up to me, Tesla would have invested in xAI long ago."
It's exactly the kind of move we'd expect Musk to make, redistributing funds between the many businesses that he sometimes runs more like an empire than independent entities that make their own decisions.
But it's also a risky gambit that couldn't have come at a worse time. Tesla is in a precarious position itself right now, with revenues cratering due to plunging sales, largely the result of Musk's own actions and an influx of compelling competition.
However, despite Tesla's dire predicament, investors are still propping up a near-$1 trillion valuation.
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