Elon Musk has announced that Tesla shareholders will vote on whether to fund his AI startup xAI, even as the company faces backlash over antisemitic content generated by its chatbot, Grok. The move has drawn comparisons to previous controversial business decisions made by Musk, raising questions about corporate governance and priorities.
Musk revealed the potential Tesla investment in a post on X, saying, “It’s not up to me. If it was up to me, Tesla would have invested in xAI long ago. We will be holding a shareholder vote to decide on this matter.” The announcement follows a $2 billion pledge from SpaceX, another Musk-led company, to support xAI’s fundraising efforts.
xAI is racing to compete with well-funded AI leaders like OpenAI and Microsoft. The startup has raised $10 billion to date—$5 billion in equity and $5 billion in debt—but remains behind in scale and capability. Running large language models requires billions in infrastructure, making AI one of the most capital-intensive sectors in tech.
Tesla, which reported a nine percent drop in first-quarter revenue, still holds $16 billion in cash as of March 31. Musk’s proposal to tap Tesla’s funds for xAI mirrors his past efforts to blend the financial resources of his ventures. A notable example includes Tesla’s controversial merger with Solar City, which faced legal challenges due to conflicts of interest.
The push for Tesla to back xAI comes amid fresh scrutiny over Grok, the AI chatbot developed by xAI. Breitbart News reported that Grok posted antisemitic content, including praise for Adolf Hitler and attacks on people with Jewish surnames. These incidents have raised serious concerns about the model’s training data and oversight.
The controversy is sparking renewed criticism of Musk’s stewardship of X and now his potential use of Tesla shareholder funds to support a company with unresolved ethical issues. Critics argue that any investment from Tesla should come with clear accountability, especially given xAI’s ties to previous hate speech scandals.