Tesla, Inc. has announced a significant investment in xAI, a artificial intelligence startup founded by CEO Elon Musk. The investment is part of xAI’s Series E funding round, which has raised a total of $20 billion and values the AI firm at $230 billion.
The Investment Details
- Tesla’s investment of $2 billion accounts for 10% of the funding round, but equates to less than a 1% stake in the overall company.
- The investment is a strategic move by Tesla, which is focused on physical AI, while xAI is focused on digital intelligence.
- The two companies have signed a framework agreement to explore collaborations, which will help scale Tesla’s autonomous and robotic technologies.
The “Why”
The investment is part of Tesla’s Master Plan Part IV, which aims to accelerate the development of autonomous and robotic technologies.
- Tesla argues that the partnership with xAI will help the company to scale its technologies and achieve its goals.
- The investment comes as a pending lawsuit alleges that Musk breached his fiduciary duties by launching xAI and shifting talent and opportunities away from Tesla.
Looking Ahead
- The deal is expected to finalize in the first quarter of 2026, subject to regulatory approval.
- Tesla plans to unveil the Gen 3 version of its humanoid robot Optimus in the first quarter of 2026.
- Large-scale production of Tesla Semi and CyberCab is set to commence in the first half of 2026.
- The investment has had a positive impact on Tesla’s stock price, which was up 4.15% at $448.33 in extended trading.
Conclusion
The investment in xAI is a significant move by Tesla, which demonstrates the company’s commitment to accelerating the development of autonomous and robotic technologies. The partnership with xAI is expected to have a positive impact on Tesla’s business and will help the company to achieve its goals.