Elon Musk on Monday stated he does not support merging his artificial intelligence company, xAI, with electric automaker Tesla, amid ongoing speculation about how the two businesses might collaborate or integrate.
The comment came in response to a question posted by X account @BullStreetBets_ asking Tesla investors whether they support a merger between Tesla and xAI. Musk’s reply was a straightforward “No.”
Future of Tesla and xAI Relationship
While rejecting a merger, Musk hinted that Tesla may hold a shareholder vote at an unspecified time to decide if the automaker should invest in xAI. Last year, Musk polled his followers on X about a potential $5 billion Tesla investment in xAI, with the majority supporting the idea.
Since leaving his position in the current administration, Musk has moved toward closer integration of his companies. A notable example occurred in March when Musk merged xAI and the social media company X, valuing xAI at $80 billion and X at $33 billion.
Last week, Musk announced that Tesla vehicles would soon feature xAI’s Grok chatbot—an AI assistant that has faced controversy over antisemitic remarks and praise of Adolf Hitler. xAI issued a public apology and corrective measures following the incident.
SpaceX Investment in xAI
Reports indicate that SpaceX, Musk’s aerospace company, has agreed to invest $2 billion in xAI as part of a broader $10 billion debt and equity fundraising round led by Morgan Stanley.
xAI is ramping up development of Grok, which it claims is the “world’s smartest artificial intelligence.” Independent AI assessor Artificial Analysis has rated Grok 4 as “higher quality compared to average.”
The AI model is central to xAI’s attempt to compete with numerous emerging startups and established tech giants, all grappling with the high costs associated with AI research and training.
What The Author Thinks
Elon Musk’s decision against merging Tesla and xAI is a smart move. Although synergy between AI and electric vehicles seems natural, prematurely merging two complex businesses risks distracting from each company’s core strengths. Instead, careful collaboration and strategic investments can foster innovation without the pitfalls of a rushed merger.
Featured image credit: TipRanks
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