Musk is attending Cannes Lions this week with an aim to reassure ad groups and global brands over the future of X.
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Tesla CEO Elon Musk posted an informal poll on social network X asking whether his publicly traded automaker should invest $5 billion into his newest startup, xAI.
Specifically, he asked: “Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors? (Board approval & shareholder vote are needed, so this is just to test the waters)”
The billionaire CEO — who concurrently runs Tesla, SpaceX, The Boring Company, Neuralink, X Corp. and now xAI — shared the poll shortly after Tesla’s second-quarter earnings call concluded on Tuesday evening.
Tesla reported second-quarter earnings that fell shy of analysts expectations for the fourth consecutive quarter, and declining revenue in its core automotive segment. However, the company saw soaring energy storage sales, and focused investors’ attention on a future filled with its robotaxis and humanoid robots now in development.
Shares of Tesla declined more than 7% after hours following the company’s second-quarter update.
Musk’s companies frequently work with and pay one another, but not to the tune of billions of dollars. For example, as CNBC has previously reported, SpaceX has purchased ad campaigns to promote its Starlink satellite internet services on X (formerly Twitter). And The Boring Company is building tunnels at Tesla’s Texas factory.
During the Tuesday earnings call, shareholders asked Musk whether Tesla might invest in xAI and integrate xAI’s software, named Grok, into its vehicles.
Musk replied, “Tesla is learning quite a bit from xAI. It’s been actually helpful in advancing Full Self-Driving and in building up the new Tesla data center. With regards to investing in xAI, I think we’d need to have a shareholder approval of such investment. But I’m certainly supportive of that if shareholders are.”
The $5 billion number did not come up until Musk posted the poll after the call.
He did not elaborate on the ways in which Grok was “advancing” the company’s driving technology.
Formed in March last year, and first discussed publicly by Musk in July 2023, xAI develops large language models and AI software products aiming to compete with offerings from Google, Microsoft, OpenAI, Meta and others.
AI chatbots can be used to generate story ideas, transcripts, a list of action items based on meeting notes, to create or edit code for computer programmers, or to translate ideas from English to another language, for example.
XAI’s first product, Grok, is a far cry from providing the utility of leading chatbots like OpenAI’s ChatGPT, Google’s Bard, Microsoft’s Bing and Anthropic’s Claude today. Musk has billed Grok as a politically incorrect and witty alternative to these existing offerings.
Musk and Tesla did not immediately respond to requests for more information on Tuesday, including why the CEO did not choose to incubate xAI at Tesla originally.
Previously, xAI raised a $6 billion series B round of funding and attained a post-money valuation of $24 billion, according to a company blog post on May 27.