Elon Musk’s AI company, xAI, recently raised $20 billion in a Series E funding round, with Tesla contributing $2 billion as part of the investment, the company disclosed in a shareholder letter. xAI develops the Grok chatbot and owns social media platform X, and the Tesla investment is structured to explore strategic AI and robotics collaborations.
The move aligns with Tesla’s Master Plan Part IV, which emphasizes integrating AI into physical products, including autonomous vehicles, Optimus robots, and energy storage systems. Tesla already supplies xAI with Megapack batteries for its data centers and has integrated the Grok chatbot into some vehicles. xAI also plans to develop AI for humanoid robots, complementing Tesla’s robotics ambitions.
The shareholder letter noted that the framework agreement is intended to enhance Tesla’s ability to deploy AI products and services at scale. The investment comes despite a previous shareholder vote rejecting the funding, with Tesla emphasizing strategic alignment as justification. The deal is expected to close in the first quarter, coinciding with Tesla’s planned capital expenditures to expand vehicle autonomy and scale production of Optimus robots.
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