Tesla stock higher on potential for xAI investment; full merger would be the 'next stage,' analyst says

Tesla banal (TSLA) roseate Monday aft CEO Elon Musk said Tesla should beryllium capable to put successful his xAI (XAAI.PVT) startup, pending a shareholder vote. This would beryllium different lawsuit of the “Muskonomy” astatine play, successful which Musk’s companies go much financially intertwined and perchance beneficial to him.

In effect to a idiosyncratic connected X.com asking astir Tesla investing successful xAI, Musk said that Tesla shareholders would person the accidental to “vote connected that matter.” The user’s petition came aft a Wall Street Journal study implicit the play that Musk’s SpaceX (SPAX.PVT) had agreed to put $2 cardinal successful xAI’s latest fundraising round. The idiosyncratic said it was “not fair” to Tesla retail investors that the institution was not invested successful xAI, to which Musk agreed and said, “If it was up to me, Tesla would person invested successful xAI agelong ago.”

Musk said successful a aboriginal station that Tesla should not merge with xAI, though the 2 companies presently enactment together. The xAI Grok chatbot was added to Tesla’s vehicles successful a caller bundle update, though this has been a contentious determination arsenic Grok has been embroiled successful contention surrounding antisemitic statements.

Bloomberg noted that xAI is besides a Tesla customer, purchasing astir $200 cardinal worthy of Tesla megapack vigor retention batteries.

Musk’s companies investing successful 1 different — and adjacent merging unneurotic — is thing new. In March, xAI bought retired Musk’s X.com successful a woody valuing X.com astatine $33 billion, a precise bully woody for investors successful the societal media company. In 2016, Tesla acquired SolarCity for $2.6 billion; the star steadfast was struggling astatine the clip and was antecedently tally by Musk’s household members, per Walter Isaacson’s Musk biography.

Indeed, the commingling of resources betwixt Musk’s companies is thing new, though it is somewhat controversial. Tesla engineers person been moving astatine some X.com and xAI, and highly sought-after Nvidia chips primitively destined for Tesla’s AI efforts were directed to xAI.

Shareholder groups person complained astir what appears to beryllium a struggle of involvement for Musk and his companies successful the past. In this case, Musk appears to favour a institution similar xAI, successful which helium owns a ample involvement and tin much afloat control.

Wall Street analysts, including Wedbush’s Dan Ives, suggested a Tesla and xAI tie-up could heighten Tesla’s artificial quality beingness and indirectly compensate Musk, whose Tesla wage bundle has been stuck successful ineligible limbo.

In a caller note, Ives argued that Musk needed a caller bundle giving him 25% voting powerfulness to incentivize him, on with “guardrails” that guaranteed his clip astatine the company. Musk chided Ives for the guardrails suggestion, telling the expert to “shut up.”