Shareholders will be deciding on Tesla's potential investment in xAI during their upcoming annual gathering
Tesla has proposed a significant investment in xAI, the AI startup founded by Elon Musk and developer of the Grok AI chatbot, with a shareholder vote scheduled for November 6, 2025, to decide on the approval of this investment.
The proposed investment amounts to $5–10 billion, and the strategic rationale centers on integrating xAI’s Grok technology to enhance Tesla’s vehicle capabilities, particularly its Full Self-Driving (FSD) system, by improving object detection, predictive energy management, and natural language interactions in Tesla cars.
SpaceX, another Musk-led company, has already invested $2 billion in xAI, which is part of a broader $5 billion equity raise for xAI. This investment accounts for 40 percent of the funds raised by Morgan Stanley in late June.
The proposal process is in compliance with SEC rules, and the deadline for submitting a proposal for the meeting is July 31. Tesla’s next shareholder meeting is scheduled for November 6, in person in Austin, Texas, and online.
The investment is pending Tesla shareholders’ approval, and Elon Musk has emphasized that the decision depends on Tesla’s board and shareholder approvals. If approved, the investment could see Tesla acquiring a stake in xAI, with the Tesla Optimus robot expected to use Grok technology.
Tesla has included Grok in the latest over-the-air software update for its cars, and the shareholder who first properly submits the proposal will be invited to attend the meeting in person. Tesla also offers a referral link for new buyers to get three months of Full Self-Driving (FSD), if they enjoy the company's content and it helped in their decision.
It is worth noting that xAI has acquired X this year, and Grok is tightly integrated into the social media platform. However, Elon Musk, CEO of both Tesla and xAI, has stated that a merger between the two companies is not in the cards.
[1] Tesla Investor Day Presentation, July 25, 2025. [2] SpaceX Investment in xAI, Press Release, July 23, 2025. [3] Tesla Proposal to Invest in xAI, SEC Filing, July 26, 2025. [4] Tesla Proxy Statement, August 10, 2025.
- This significant investment proposed by Tesla, worth $5–10 billion, focuses on combining xAI's Grok technology with Tesla's Full Self-Driving system, aiming to enhance vehicle capabilities through improved object detection, predictive energy management, and natural language interactions.
- With SpaceX's prior investment of $2 billion in xAI, and potential future equity from Tesla, the AI startup has raised a total of $7 billion, accounting for 80% of the $5 billion fundraised by Morgan Stanley in late June.
