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Elon Musk's heavy investment in xAI poses many risks. Photo: Bloomberg . |
Elon Musk is accelerating his strategy to expand into the field of artificial intelligence (AI), despite the financial challenges and risks involved. In the context of the increasingly fierce global AI race, Musk has made no secret of his ambition to turn xAI, the young company he founded, into a real rival to OpenAI and many other major competitors.
What’s notable is that rather than seeking independent funding for xAI, Musk is mobilizing internal resources from subsidiaries in his empire. From SpaceX to Tesla, financial and infrastructure resources are being redirected to serve AI goals. The move has sparked controversy among investors, especially as core companies like Tesla struggle with declining sales and growing market pressure.
Risky investment
Billionaire Elon Musk is directing capital from companies in his empire, including Tesla and SpaceX, into the AI field, with the ambition of building a new force that competes directly with OpenAI and many other major rivals.
On July 13, Tesla CEO announced that he would hold a vote with the electric car company's shareholders to seek their opinions on investing in xAI, the artificial intelligence research company founded by the billionaire himself. This move comes right after SpaceX agreed to invest about $2 billion in xAI, according to Bloomberg . Previously, in March, this AI company was merged into the social network X in a stock exchange deal, thereby raising its valuation to about $113 billion .
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xAI faces losses of up to $1 billion per month. Photo: Bloomberg . |
Musk has said he doesn’t want to consolidate companies in his ecosystem, but he believes Tesla investors should have access to the growth opportunities from xAI. However, the billionaire did not provide a specific explanation for xAI’s losses of more than $1 billion a month, especially as the company tries to build competing artificial intelligence models.
According to Bloomberg , xAI is expected to cost around $13 billion by 2025. Meanwhile, the company has yet to gain a strong foothold in the enterprise market or the software development community, both of which OpenAI and Anthropic have already made significant impact on.
More worrying is the level of technological risk that xAI is facing. Recently, the company’s chatbot Grok was heavily criticized after posting content praising Adolf Hitler on the X platform, leading to a public apology for the “horrific behavior” that many users experienced.
Musk's risky move
Despite its status as the world’s most valuable automaker, Tesla is facing a series of challenges, including falling sales, negative market sentiment, and a 22% loss in its stock price this year. Against this backdrop, investing in an unprofitable startup like xAI raises concerns about Elon Musk’s asset allocation.
Nancy Tengler, CEO of Laffer Tengler Investments, said any investment in xAI would dilute the financial resources of the electric vehicle division. However, she also said that Tesla’s loyal shareholders would likely approve the proposal, as they did with the controversial SolarCity merger in 2016.
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Elon Musk devotes a lot of resources to xAI. Photo: Bloomberg . |
Tesla has yet to release official documents for its annual shareholder meeting in November, and several key figures, including board chair Robyn Denholm and investor relations director Travis Axelrod, declined to comment on the plan.
Other companies in Elon Musk’s ecosystem are also playing a significant role in his AI ambitions. SpaceX operates more than 7,000 Starlink satellites, creating the infrastructure that xAI can use to distribute large-scale language models. Meanwhile, Tesla sold $230 million worth of Megapack batteries to xAI’s Memphis data center in the first two months of 2025.
The electric car giant is also testing the integration of its Grok chatbot into its products, which allows users to interact with AI by voice while driving. However, according to Morningstar expert Seth Goldstein, Elon Musk has not yet proven the importance of investing in xAI. If the company remains completely separate, as the Tesla CEO has said, the board may take a closer look to protect shareholder interests.
Source: https://znews.vn/nuoc-co-lieu-linh-cua-elon-musk-post1568639.html
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