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Tech Bytes: Tesla CEO Elon Musk polls social media on $5 billion investment in AI startup

Published 24/07/2024, 03:58 pm
© Reuters.  Tech Bytes: Tesla CEO Elon Musk polls social media on $5 billion investment in AI startup
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Tesla (NASDAQ:TSLA) owner and serial pollster of his followers Elon Musk has launched a poll on his social media platform X, asking users whether his electric vehicle business should invest $5 billion in an artificial intelligence startup, xAI.

Perhaps unsurprisingly, early votes show most users favour the move.

Testing the waters

"Board approval and shareholder vote are needed, so this is just to test the waters," Musk said on the poll.

The poll follows Tesla's report of its lowest profit margin in five years due to price cuts and increased spending on AI projects.

In June, CNBC reported that Musk had ordered Nvidia to ship thousands of AI chips intended for Tesla to xAI and X. Musk explained that Tesla's data centre was full, with no space for the chips.

During Tesla's earnings conference call, Musk stated that xAI would be “helpful in advancing full self-driving and in building up the new Tesla data centre”.

He pointed to opportunities to integrate xAI's chatbot, Grok, with Tesla's software.

Nearly three hours after the poll was posted, around 386,000 users had participated, with 70% voting in favour of the investment.

Tesla did not immediately respond to a Reuters request for comment, and xAI could not be reached for comment.

Alternative to ChatGPT

Musk, the world's richest person, launched xAI last year, aiming to build an alternative to ChatGPT. The startup raised $6 billion in a Series B funding round in May, achieving a post-money valuation of $24 billion. Backers include Andreessen Horowitz and Sequoia Capital.

He has previously stated that he plans for a quarter of xAI to be owned by investors in X, formerly known as Twitter, which he acquired for $44 billion. The social media firm's value has since declined.

On the earnings call, Musk also dismissed concerns about diverting resources from Tesla to his other companies.

Musk frequently uses polls on X. In 2021, he asked Twitter users whether he should sell 10% of his Tesla stake and began selling shares just days after the poll.

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