Tesla Examines Shareholder Proposals for Investment in xAI

Tesla has acknowledged the submission of multiple shareholder proposals concerning a potential investment in CEO Elon Musk‘s artificial intelligence start-up, xAI. This initiative aligns with Musk’s overarching strategy to unify his business ventures, particularly following xAI’s acquisition of the social media platform X for $33 billion in March. The acquisition is intended to enhance the capabilities of chatbots developed by xAI, which has aggressively pursued funding this year.

According to a report by Morgan Stanley last month, xAI successfully raised $5 billion in debt and secured an additional $5 billion through a strategic equity investment. As part of Musk’s strategy to integrate his businesses, the Grok chatbot has already been incorporated into Tesla vehicles, further blurring the lines between his various enterprises.

The potential investment in xAI arrives during a challenging period for Tesla. The company is grappling with several issues, including Musk’s political activities, which have reportedly impacted the demand for its electric vehicles. Additionally, Tesla’s shares have experienced a significant decline of 22% this year. Despite these challenges, Musk has expressed a willingness to consider shareholder proposals on any relevant topic, as he stated during Tesla’s recent quarterly earnings call.

Tesla’s annual shareholder meeting is set for November 6, where the company will address these proposals. To comply with Securities and Exchange Commission (SEC) regulations, Tesla plans to include only one proposal per topic in its proxy statement. Earlier this month, the board established July 31 as the deadline for shareholders to submit their proposals for consideration.

As Tesla navigates these complex dynamics, the interest in investing in xAI highlights the ongoing intertwining of Musk’s various business interests and the potential implications for Tesla’s future direction.