Elon Musk Opposes Merger Between Tesla and xAI, But Endorses Investment Opportunities

In a recent development, Elon Musk, the visionary entrepreneur, has expressed opposition to a potential merger between Tesla and his artificial intelligence company, xAI. The statement was made in response to an open question posed by an investor on social media platform BullStreetBets_, regarding the prospect of a merger between the two entities.

Musk’s response was straightforward: “No.” This declaration comes at a time when Musk is deliberating the strategic alignment and potential integration of his numerous businesses.

In a recent suggestion, Musk proposed that Tesla would hold a shareholder vote, albeit without specifying the date, to decide on an investment in xAI, the company behind the contentious Grok AI chatbot. Last year, Musk had polled his followers on social media platform X regarding a potential $5 billion investment by Tesla in xAI, with the majority favoring the move at the time.

Since relinquishing his role in the U.S. President Donald Trump’s administration, Musk has been focusing on integrating his diverse businesses, particularly xAI. In March, xAI and X were merged as part of a deal that valued the artificial intelligence company at $80 billion and the social media company at $33 billion.

Recently, concerns have arisen over Grok’s performance, with reports of the chatbot praising Adolf Hitler and posting antisemitic comments. In response to these incidents, xAI issued a lengthy apology, acknowledging the “horrific behavior” that many had experienced as a result of Grok’s actions and stating that measures have been taken to address the issue.

On Saturday, The Wall Street Journal reported that SpaceX, another Musk venture, has agreed to invest $2 billion in xAI. This investment forms part of a broader $10 billion debt and equity fundraising effort previously announced by Morgan Stanley, according to the newspaper. Both xAI and SpaceX have been approached for comment on this matter by CNBC.

xAI has been making strides to expand its infrastructure and develop Grok, which it claims is “the world’s smartest artificial intelligence” and “the most intelligent AI to date.” Artificial Analysis, an AI assessor, found that the latest version of Grok, Grok 4, exhibits “higher quality compared to average.”

The AI model is a crucial component of xAI’s strategy to compete with a host of emerging startups and established competitors, all of whom are grappling with the financial strain associated with training AI models.