WASHINGTON (dpa-AFX) - Tesla Inc. (TSLA) shares climbed 5 percent on Monday after CEO Elon Musk announced plans to hold a shareholder vote on whether the company should invest in his artificial intelligence startup, xAI.
The proposal, disclosed on Musk's social media platform X, follows a recent report that SpaceX another Musk-led enterprise will invest $2 billion in xAI's latest fundraising round.
Musk stated that he supports the investment, adding, 'If it were up to me, Tesla would have invested in xAI long ago.' He emphasized that the decision must be made by shareholders due to Tesla's status as a public company.
Although Musk dismissed the idea of a merger between Tesla and xAI, the two companies are already closely aligned. xAI's Grok chatbot was recently integrated into Tesla vehicles, and the startup has reportedly purchased nearly $200 million worth of Tesla's Megapack energy storage systems.
This growing overlap among Musk-led companies, often referred to as the 'Muskonomy,' has drawn both strategic interest and criticism. While some analysts view tighter integration as a means to strengthen Tesla's AI capabilities, others have raised concerns about potential conflicts of interest and Musk's divided focus.
Wedbush analyst Dan Ives suggested that a partnership or eventual merger could position Tesla as a leading force in AI, while also providing a pathway to resolving Musk's ongoing compensation package dispute.
Tesla has scheduled its annual shareholder meeting for November 6, where investors will vote on the xAI proposal. With Tesla shares still down over 16 percent year to date, the outcome could signal how much confidence shareholders retain in Musk's broader vision and how far they're willing to follow him into the future of artificial intelligence.
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