Elon Musk loves pressing his luck when it comes to what he can get his Tesla shareholders to do. Just a few weeks after he got them to approve a $56 billion pay package, he’s apparently asking them to indirectly bail out the investors of his social media company, X (Twitter, baby).
Technically, the rescue involves xAI and X, which is still dealing with the fallout of Musk’s ill-advised $44 billion takeover of the company nearly two years ago. Issues compounded when Musk announced X would own 25 percent of the artificial intelligence company. In an effort to intertwine xAI and Tesla at Tesla’s second-quarter earnings call on July 23, Musk said the automaker was “learning quite a bit” from xAI (the sixth company Musk owns), according to Bloomberg. He then apparently made some sort of vague mention of the company advancing Tesla’s driver-assistance features and helping build up a new data center.
Here’s more about what Musk has said about intertwining xAI and Tesla, from Bloomberg:
“Regarding investing in xAI, I think we’d need to have a shareholder approval of any such investment,” Musk said. “But I’m certainly supportive of that, if shareholders are.”
Soon after the call wrapped, Musk created a poll on X, throwing out a big number.
“Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors?” he asked. In parentheses, he wrote that board approval and a shareholder vote are needed, so the poll was “just to test the waters.”
I don’t know, man. Perhaps that $5 billion could be better spent at Tesla. They could put that money toward making sure the Cybertruck doesn’t keep breaking, or they could update its aging lineup of vehicles, or they could even work on that $25,000 car. There are so many possibilities!
This is not the first time Musk has attempted to use one of his companies to bail out another he was interested in, as Bloomberg explains:
Remember, Musk dumped billions of dollars’ worth of Tesla shares that year to help fund his Twitter purchase, tanking the carmaker’s stock. Also recall that Musk has bailed out one company in his orbit with another before — Tesla acquired SolarCity in 2016, and even the CEO himself later regretted it. And don’t forget that one of the reasons Tesla gave for making Musk eligible for $55.8 billion worth of stock options was to incentivize him to focus on the car company.
In a lot of ways, Musk’s empire is cannibalizing itself – even outside of what his interests happen to be day to day. xAI is apparently hiring away a ton of Tesla employees, and AI chips that were once destined for Tesla have been sent to xAI instead.