Exclusive: Elon Musk’s AI startup xAI has discussed a deal where it would get some Tesla revenue in exchange for providing the carmaker access to its technology and resources https://t.co/eKtGJnVMRy via @WSJ
— Paul Triolo (@pstAsiatech) September 8, 2024
Tesla CEO Elon Musk has denied reports suggesting that the electric vehicle company has considered sharing revenue with his AI startup, xAI, in exchange for utilizing its AI models. The potential arrangement would have involved Tesla licensing xAI’s models to power its driver-assistance software, known as Full Self-Driving (FSD), and develop features like a voice assistant for Tesla vehicles and software for the company’s humanoid robot, Optimus. Musk addressed the report on his social media platform X, formerly known as Twitter, stating, “Tesla has learned a lot from discussions with engineers at xAI that have helped accelerate achieving unsupervised FSD, but there is no need to license anything from xAI.” He emphasized that the xAI models are extremely large and contain, in compressed form, a substantial portion of human knowledge, making them unsuitable to run on Tesla’s vehicle inference computers.
Just a few years ago, if you would have told me that Elon Musk sold Tesla stocks to pay for ads that promote natural gas and petrol production as part of a presidential candidate’s campaign, I would have never believed you.
Now, it’s the third nuttiest thing he did this week. pic.twitter.com/cvgIFsKb1m
— Fred Lambert (@FredericLambert) September 7, 2024
The report had sparked concerns over potential conflicts of interest, given Musk’s dual roles as the CEO of Tesla, a public company, and the founder of xAI, his privately-held AI startup. Some have argued that talent and resources have been diverted from Tesla to what is essentially a competing company.
Musk denies revenue collaboration with xAI
Tesla’s stock climbed 3% on Monday following Musk’s denial of the revenue-sharing agreement.
“I laugh more at stuff that I read on 𝕏, than everything else combined”
Elon Musk
pic.twitter.com/NHlbsH0wdt— Tesla Owners Silicon Valley (@teslaownersSV) September 10, 2024
However, the company’s shares have fallen roughly 20% over the past 12 months, representing a loss of nearly $200 billion in market capitalization, with particular struggles in China, the world’s largest car market. Despite the challenges, some investors see long-term growth opportunities for Tesla, particularly in using AI to develop autonomous driving software.
Musk founded xAI in 2024 as a competitor to OpenAI, an organization he co-founded but subsequently left. The pitch for xAI outlined a vision where its models would be trained on data from Musk’s various companies to enhance technology across these enterprises. The situation underscores ongoing concerns about Musk’s management decisions and their implications for Tesla’s future, amid the balancing act between his public and private ventures.
April Isaacs is a news contributor for DevX.com She is long-term, self-proclaimed nerd. She loves all things tech and computers and still has her first Dreamcast system. It is lovingly named Joni, after Joni Mitchell.
