Tesla (TSLA) said it will invest about $2B in Elon Musk’s AI company xAI (X.AI).
Tesla said that on Jan. 16 the company signed an agreement to invest about $2B to acquire shares of Series E Preferred Stock of xAI as part of their recent publicly-disclosed financing round.
The electric carmaker said that, as given in Master Plan Part IV, Tesla is building products and services that bring AI into the physical world. Meanwhile, xAI is developing leading digital AI products and services, such as its large language model (Grok).
“And we just had like a lot of investors ask us to do this as there’s a lot of investors or Tesla shareholders say like, we should invest in xAI. So that’s like we’re just doing what shareholders asked us to do pretty much. But Grok will be very helpful in, say, maximizing the efficiency of the management of a large autonomous fleet,” said Tesla CEO Musk on the company’s earnings call.
Tesla CFO Vaibhav Taneja noted that Tesla vehicles are already using Grok.
“But if there are things which xAI can help accelerate our progress, then why should we not do that and that is the reason why we’ve gone ahead with such an investment because this is part of the strategic initiative,” said Taneja. “If there are ways and means we can find efficient ways for others to help us and xAI literally fits into that mold. So that’s why we went ahead with it.”
Grok has recently come under scrutiny following the alleged generation of deepfake images by the AI service.