Tesla’s shareholders are set to soon decide whether to approve the electric vehicle manufacturer’s investment in Elon Musk’s artificial intelligence startup xAI—a proposal framed as a strategy to reinforce Tesla’s goals in the realms of AI, robotics, and energy.
This proposal, put forth by Stephen Hawk—a Florida-based shareholder who holds $2,000 worth of Tesla’s common stock—appears in Tesla’s proxy statement alongside a company-supported initiative to increase Musk’s 10-year compensation package to $1 trillion. Hawk outlined his rationale for the proposal in a supporting statement:
“Tesla’s integration of Grok into its vehicle lineup has already shown the real, tangible advantages of partnering with xAI. As Tesla shifts its focus toward AI-powered technologies—including Full Self-Driving (FSD) and robotics—a strategic investment in xAI would ensure the company gains access to cutting-edge AI capabilities, fuel product innovation, and ultimately enhance shareholder value.”
Notably, Tesla’s board— which typically advises investors to reject shareholder-initiated proposals—has taken a neutral stance on this particular request.
Should Tesla move forward with investing in xAI, it would become the second of Musk’s companies to do so. SpaceX, Musk’s aerospace enterprise, has already pledged $2 billion to xAI as part of the startup’s $5 billion equity fundraising round. Industry analysts have suggested that SpaceX’s participation might indicate xAI is facing challenges in securing investments from external sources. (It’s also worth noting that Musk merged X—formerly known as Twitter—with xAI earlier this year.)
Some Tesla shareholders have raised concerns that xAI constitutes a competitor to Tesla, especially since Musk has repeatedly characterized the EV maker as an AI company. Last year, a group of shareholders filed a lawsuit against Musk and Tesla, alleging that the company allowed Musk to launch a rival AI firm. However, the case was ultimately dismissed.
Hawk’s proposal arrives at a critical time for Tesla, as the company grapples with declining electric vehicle sales and a underwhelming robotaxi rollout. In response, Tesla has sought to shift investor focus away from these challenges and toward its AI initiatives—primarily the testing and deployment of autonomous vehicles and Optimus, its humanoid robot.
Musk has argued that he needs a larger controlling stake in Tesla to effectively lead the company’s AI efforts, without being diverted by his work at xAI. Alongside the xAI investment proposal, shareholders will also vote on a Tesla-endorsed 10-year compensation plan for Musk, which could grant him more than 25% control over the company.
This filing comes as Tesla continues to appeal a decision by a Delaware judge to invalidate Musk’s previous $56 billion pay package. The new compensation plan would link Musk’s earnings to ambitious performance targets, most notably increasing Tesla’s market capitalization from its current level of approximately $1 trillion to over $8 trillion.
“Tesla can’t reach an $8 trillion market cap relying solely on FSD and robotaxis. To hit that $8 trillion mark, xAI is pretty much a necessity,” Gene Munster, Managing Partner at Deepwater Asset Management, told TechCrunch. “We’re talking about numbers that have never been achievable before. To get there, we need developments that seem impossible right now—and widespread adoption of humanoid robots is probably the biggest driver of that.”
Munster further explained that xAI could 助力 Tesla’s pursuit of that massive market cap in multiple ways.
“Simply the excitement generated by a Tesla-xAI partnership will push Tesla’s valuation higher,” he noted. He added that potential returns from the investment, combined with access to xAI’s resources (such as computing power), could help elevate shareholder value and advance Tesla’s own AI aspirations.
Tesla’s shareholder vote is scheduled for November 6 at 3:00 PM Central Time, to be held at Tesla’s Gigafactory Texas. The event will also be streamed live via the link provided here.