Tesla shareholders are set to vote on a proposal that would allow the electric vehicle maker to invest in Elon Musk’s artificial intelligence startup, xAI. The proposal is presented as a strategic move to strengthen Tesla’s ambitions in AI, robotics, and energy.
This proposal was put forward by Stephen Hawk, a Florida shareholder with a $2,000 stake in Tesla common stock. In his supporting statement, Hawk argues that Tesla’s integration of xAI’s Grok into its vehicles shows the tangible benefits of collaboration. He believes a strategic investment would secure access to advanced AI capabilities, enhance product innovation, and drive shareholder value as Tesla pivots toward AI-driven technologies like Full Self-Driving and robotics.
The item is listed in Tesla’s proxy statement alongside a separate company-backed proposal to raise Musk’s pay package. Unlike many shareholder proposals, which the board typically recommends voting against, the board has remained neutral on this investment idea.
If approved, Tesla would become the second of Musk’s companies to invest in xAI. His aerospace company, SpaceX, has already committed to a $2 billion investment as part of a larger equity raise. Some analysts have interpreted SpaceX’s involvement as a signal that xAI may be having difficulty raising funds from outside investors.
This proposal is not without controversy. Some shareholders have previously argued that xAI is a rival to Tesla, noting that Musk himself often describes the EV company as an AI company. Last year, a group of shareholders even sued Musk and Tesla for allowing him to start a competing AI firm, though the case was ultimately dismissed.
The vote comes at a challenging time for Tesla, which is grappling with weakening electric vehicle sales and a slow robotaxi rollout. The company has been attempting to shift investor focus toward its AI and autonomy efforts, including its Full Self-Driving technology and its Optimus humanoid robot.
Musk has argued that he needs a larger controlling stake in Tesla to properly lead the company’s AI initiatives and avoid being distracted by his other ventures. Alongside the xAI investment proposal, shareholders will also vote on a new Tesla-backed ten-year compensation plan for Musk that could increase his control of the company to more than twenty-five percent.
This new filing occurs as Tesla continues to appeal a Delaware judge’s decision to strike down Musk’s previous $56 billion pay package. The new proposed plan ties his compensation to extremely ambitious benchmarks, including increasing Tesla’s market value from its current $1 trillion to over $8 trillion.
According to one analyst, achieving such an unprecedented market cap would require more than just self-driving cars and robotaxis. He suggested that xAI would be a necessary component, potentially through the excitement of a merger, returns on the investment, or access to xAI’s computational resources. The integration of advanced AI and the widespread deployment of humanoid robots could be the significant lever needed to reach those financial heights.
Tesla’s shareholder vote is scheduled for November 6 at 3 PM Central Time at the company’s Gigafactory Texas. The meeting will also be streamed live online.