Elon Musk has publicly denied a recent report suggesting a potential agreement between Tesla and xAI, a deal that would reportedly see Tesla use xAI’s models in exchange for a share of the automaker’s revenue.
According to the initial story from The Wall Street Journal, Tesla was purportedly exploring a deal to license xAI’s models to support its Full Self-Driving (FSD) software, voice assistant technology for its vehicles, and even software for the Tesla humanoid robot, Optimus. The report indicated that revenue-sharing could form part of this partnership, with xAI gaining a percentage of future Tesla revenue.
However, Musk was refuted these claims, posting on his social media platform X that while he didn’t read the article, the report was “not accurate.” He emphasized that while Tesla has learned valuable insights from xAI engineers that have helped accelerate the development of FSD, there was no need for Tesla to license xAI’s models. “The xAI models are gigantic, containing, in compressed form, most of human knowledge, and couldn’t possibly run on the Tesla vehicle inference computer, nor would we want them to,” Musk said.
Haven’t read the article, but the above is not accurate.
— Elon Musk (@elonmusk) September 8, 2024
Tesla has learned a lot from discussions with engineers at xAI that have helped accelerate achieving unsupervised FSD, but there is no need to license anything from xAI.
The xAI models are gigantic, containing, in…
This statement challenges the original Wall Street Journal report, which had suggested that xAI would play a significant role in Tesla’s technological advancements in exchange for financial compensation. The report indicated that the terms of any potential deal would depend on how heavily Tesla relied on xAI’s AI models as opposed to developing in-house solutions. The article further noted that executives at xAI had discussed an even revenue split with Tesla for FSD profits.
Founded in 2023, xAI was established by Musk to rival OpenAI, the company he co-founded but eventually parted ways with. xAI aims to push the limits of AI, and its models are said to be trained on data from Musk’s other companies, including Tesla, SpaceX, The Boring Company, Neuralink, and X. This vision includes leveraging data across these organizations to enhance their technological innovations.
Although no formal licensing or revenue-sharing deal between Tesla and xAI appears to be in the works, there is no denying the close relationship between the two companies. xAI has hired several former Tesla engineers, and Musk himself has diverted resources such as Nvidia AI chips from Tesla to xAI, reinforcing the interconnection between his ventures.
Musk is also seeking board and shareholder approval for Tesla to invest $5 billion into xAI.
Nevertheless, Musk’s denial of any formal agreements between Tesla and xAI may indicate his intent to maintain some separation between his AI and EV ambitions.
Tesla’s board, which has been criticized for its perceived lack of independence, has yet to voice any concern over Musk’s involvement with xAI. However, several shareholders have filed lawsuits in the Delaware Court of Chancery, arguing that Musk’s efforts to build xAI come at Tesla’s expense.
