Should Tesla invest $5B in xAI? Musk asks X followers
Billionaire entrepreneur Elon Musk has used social media, to gauge the possibility of a $5 billion investment by Tesla into his AI start-up, xAI. Through his X handle, Musk queried his followers about whether Tesla should make this substantial investment, stating he was "testing the waters" for a potential deal. This inquiry follows Tesla's fourth consecutive quarter of disappointing profits.
Musk emphasizes xAI's contribution to Tesla's advancements
During a post-earnings call, Musk was questioned about the potential of Tesla investing in xAI, or integrating the Grok chatbot into Tesla's software. In response, he confirmed that "Tesla is learning quite a bit from xAI." He further highlighted that xAI has been instrumental in advancing full self-driving (FSD) and in building up the new Tesla data center.
Investment will be subject to board approval
xAI's recent funding round and valuation
xAI, established by Musk in 2023, raised approximately $6 billion in a funding round earlier this year. This round valued the start-up at around $18 billion before the deal, and received significant backing from Sequoia Capital and Andreessen Horowitz. This investment represents one of the largest investments to date in generative AI.
