Tesla shareholders will immediately vote whether the electric car maker will invest in Elon Musk’s AI startup Xai. This has been proposed as a way to enhance Tesla’s ambitions in AI, robotics and energy.
Along with a company-supported push to raise Musk’s 10-year salary package to $1 trillion, the proposal, listed in Tesla’s representation statement, acquires a shares with $2,000 in common stock from Florida shareholder Stephen Hawk. His supportive statements include:
Tesla’s integration of Grok into the vehicle demonstrates the specific benefits of collaboration with Xai. As Tesla pivots towards AI-driven technologies such as fully autonomous driving and robotics, strategic investments in Xai ensure access to advanced AI capabilities, enhance product innovation and drive shareholder value.
Boards that often propose that investors oppose shareholder proposals are neutral on this.
If Tesla were to invest in Xai, he would be the second company in the mask company. SpaceX, Musk’s Aerospace Company, has pledged to invest $2 billion in Xai as part of a $5 billion stock raise. Analysts speculate that SpaceX’s involvement in XAI could indicate that AI companies are struggling to nurture from outside investors. (Musk merged X, a company previously known as Twitter, with Xai earlier this year.
Musk often describes his EV company as an AI company, so some Tesla shareholders claim that Xai is Tesla’s rival. Last year, shareholders sued Musk and the company for allowing Musk to start a rival AI company, but the case was dismissed.
Hawk’s proposal means Tesla is working on weaker EV sales and an inactive Robotaxi rollout. The company has sought to move investors away from these headwinds and direct Tesla’s AI efforts. This focuses on testing and deployment of self-driving cars and their humanoid robots.
Musk claims that instead of being distracted by other AI companies, he needs more control over Tesla to lead the company’s AI efforts. In addition to the proposal to invest in Xai, shareholders will vote for Musk’s Tesla Support 10-Year Compensation Plan, which can give them 25% or more control.
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The filing is as Tesla continues to appeal the Delaware judge’s decision to break Musk’s early $56 billion pay package. The new plan will tie mask compensation to an ambitious benchmark. This will increase Tesla’s market value from around $1 trillion today to over $8 trillion.
“Tesla will not reach $8 trillion market capitalization based on FSD and Robotaxi. We need Xai to reach that $8 trillion,” Gene Munster, managing partner at Deepwater Asset Management, told TechCrunch. “We’re talking about numbers that were historically unthinkable. To get to them, we need to do what we can’t think about now. And one of them is humanoid robots everywhere. That’s probably the biggest lever.”
Investors noted that Xai can help Tesla reach its market capitalization in several ways.
“The excitement around Xai and Tesla is what makes Tesla highly rated,” he said, adding that its investment and potential returns from access to Xai’s resources will help boost shareholder value and Tesla’s own AI ambitions.
Tesla shareholder votes are scheduled for November 6th at 3pm at Tesla’s Giga Factory Texas at 3pm Central time, and will be streamed live here.
