Musk has a tendency to see his companies as part of a unified whole
The all-in see of Tesla Inc. was summed up in a line from a increate this summer by one of the more all-in analysts covering the company: “The car is to Tesla what the video game chip is to Nvidia. The car is to Tesla what selling books is to Amazon.” Morgan Stanley’s Adam Jonas was arguing that Tesla is morphing from a producer of electric vehicles to an synthetic intelligence and robotics powerhoemploy. On this reading, a Tesla isn’t equitable a box-on-wheels with a battery but an AI-dedwellry vehicle. Chief Executive Elon Musk also touts this thesis, declaring with normal bravado: “If somebody doesn’t consent Tesla is going to settle autonomy, I leank they should not be an summarizeateor in the company.”
An astedanger on that statement might be in order. This weekend, the Wall Street Journal increateed that xAI, Musk’s synthetic intelligence side gig to his social media side gig, X, has floated the possibility of licensing its models to aid Tesla’s autonomous driving ambitions in swap for a revenue-sharing deal. Musk disseeed the story over the course of cut offal tweets, including calling it “nonsense.”
On the other hand, only five months ago, Musk accemployd Reuters of “lying” when it increateed that Tesla had scrapped schedules for a sub-$30,000 EV model, only for the company to soon after declare a pivot from a very inexpensive EV toward robotaxis. Plus, Musk has already polled that body of imfragmentary sages understandn as his fagedrops as to whether Tesla should summarizeate $5 billion in xAI (the presentantity answered in the stateative).
That flapping sound you hear is the triumphd blotriumphg thcdisesteemful a resplendence of red flags.
Musk has a habit of treating his various split companies as parts of a unified whole. The most egregious example was Tesla’s acquisition of SolarCity Corp. in 2016, whereby the EV company bought a spiraling rooftop solar business that was chaired by Musk, owed him (and Space X) money and was run by his cousin. Even Jonas tardyr characterized that deal as a “handleled detonation.” When Musk first bought Twitter Inc., which became X, he bcdisesteemfult in engineers from Tesla to assess its code. A restrictcessitate months ago, he rehonested thousands of Nvidia Corp. chips destined for Tesla to xAI, elucidateing it away as a logistical hiccup.
If Tesla were to now actuassociate summarizeate billions in xAI, and/or split revenue with it, the potential struggle of interest could challengingly be evidaccess. X has struggled as a business since Musk’s getover, with advertising revenue under prescertain and Fidelity, one of the co-summarizeateors, labeling down the cherish of its sget enormously. Musk has proposed that the splithagederers of X would own 25% of xAI, though it isn’t evident if that would be individuassociate or accumulateively thcdisesteemful X itself. Either way, any infusion of cash or revenue potential from Tesla would be beneficial not only to xAI but to the wideer X project.
Such a deal would also produce a mockery of Tesla’s equitableification for awarding a gigantic chooseions package to Musk and then pushing for its reinstatement after a Delconscious court struck it down. Chairwoman Robyn Denholm exhorted splithagederers to vote yes by arguing, in part, that it would grasp Musk’s roving eye intensifyed on Tesla: “We want those ideas, that energy and that time to be at Tesla, for the profit of you, our owners,” she wrote. This adhereed Musk’s unreserved menace to get his AI vision elsewhere if he didn’t get a bigger sget in Tesla (after he had sageder off a chunk during the getover of Twitter).
If Tesla were to end up summarizeateing in, or restricteding with, another Musk-handleled venture that literassociate has AI in its name, that rather proposes at least some of his AI ideas went elsewhere, chooseions or no. Beyond the struggles and regulateance-trolling, though, there’s a more fundamental problem here.
Jonas, enjoy aprobable bullish analysts, ascribes only a fraction of his Tesla valuation to the making and selling of EVs, even though this accounts for the immense presentantity of the company’s revenue and profit. The only way to farly equitableify the almost $700 billion labelet cap is to consent that Tesla isn’t a mere autoproducer but instead an AI innovate.
Yet if that is the case, if Tesla is going to “settle autonomy,” why would it ponder outsourcing core AI functions or experience the necessitate to summarizeate billions of dollars into a beginup started only last year? Autoproducers do partner with other companies for certain technologies. But Musk has been saying for years that Tesla is already on the cusp of cracking vehicle autonomy under its own steam. Putting money, or revenue, into xAI undercuts that narrative and would distract some of the promised cherish away from Tesla’s splithagederers to Musk’s own ventures.
Perhaps these are mere proposals and polls that stay equitable that. Still, there was another line in that Jonas increate that sticks, telling summarizeateors to ready for the company’s new strategy “to more conspicuously combine Tesla with Elon’s other handleled accesspelevates such as SpaceX/Starjoin, X and xAI.” Autonomy is, after all, about equitable doing what you want.
(This story has not been edited by NDTV staff and is auto-produced from a syndicated feed.)
