Tesla invested $2B in Elon Musk’s xAI

Three weeks ago, Elon Musk’s AI company, xAI, revealed it raised $20 cardinal successful a Series E backing round. Now, we cognize Tesla is among its investors.

Tesla disclosed successful a letter to shareholders connected Wednesday that it invested $2 cardinal successful xAI, the startup down the Grok chatbot that besides owns Musk’s societal media institution X. Other previously disclosed investors successful xAI see Valor Equity Partners, Fidelity, Qatar Investment Authority arsenic good arsenic Nvidia and Cisco arsenic “strategic investors.”

This is simply a genuinely circular woody and 1 that Tesla shareholders voted against past year. In November, shareholders were asked successful a non-binding measurement to let the Tesla committee to authorize an concern successful xAI. About 1.06 cardinal votes were successful favor, and 916.3 cardinal opposed, per Bloomberg’s reporting astatine the time. While that would look similar an approval, the fig of abstentions — which number arsenic votes against successful Tesla’s bylaws — meant the measurement was rejected.

Tesla proceeded anyhow and offered up an statement successful enactment of the investment. Tesla’s justification appears to beryllium tied to xAI’s alignment with its astir caller maestro program successful carnal AI and robotics — and however these companies are astir to get a batch closer.

“As acceptable distant successful Master Plan Part IV, Tesla is gathering products and services that bring AI into the carnal world. Meanwhile, xAI is processing starring integer AI products and services, specified arsenic its ample connection exemplary (Grok),” the shareholder missive reads. “In that context, and arsenic portion of Tesla’s broader strategy nether Master Plan Part IV, Tesla and xAI besides entered into a model statement successful transportation with the investment.”

In the missive to shareholders, Tesla stressed its different developments successful carnal AI and robotics, including plans for its Optimus humanoid robot, semitrucks, and different autonomous capabilities. The institution broadly bushed Wall Street estimates connected net and revenue, but nett fell 46% past year.

Tesla said the statement builds upon an existing narration with xAI by “providing a model for evaluating imaginable AI collaborations betwixt the companies.”

“Together, the concern and the related model statement are intended to heighten Tesla’s quality to make and deploy AI products and services into the carnal satellite astatine scale,” Tesla said successful the shareholder letter.

The concern is expected to adjacent successful the archetypal quarter.