Elon Musk's xAI Eyes Share of Future Tesla Revenue in Potential Deal

Elon Musk‘s AI venture xAI is reportedly discussing a potential deal with Tesla Inc. The deal would involve Tesla licensing AI models from xAI for its Full Self-Driving software.

What Happened: The proposed deal would entail Tesla sharing a portion of its revenue with xAI. In return, xAI would contribute to the development of additional features for Tesla, such as a voice assistant similar to Siri and software for Tesla’s humanoid robot, Optimus.

The specifics of the revenue-sharing agreement would be contingent on the extent to which Tesla utilizes xAI’s technology in comparison to its own. Discussions between xAI executives and Tesla have reportedly included the possibility of an even revenue split from Tesla’s Full Self-Driving (FSD) service, reports The Wall Street Journal.

Musk has been vocal about his belief that Tesla’s future is heavily dependent on advancements in robotics and artificial intelligence. Tesla’s FSD service is currently priced at $99 a month or a flat fee of $8,000.

Additionally, Tesla is in the process of developing a robotaxi, which is expected to be unveiled on October 10.

Also Read: Elon Musk’s AI Startup Could Reach A Whopping $20 Billion Valuation, Exceeding Initial Expectations

A formal partnership with xAI aligns with Musk’s history of sharing resources across his various businesses. However, this practice has sparked concerns about potential conflicts of interest, particularly in relation to the sharing of resources between publicly traded Tesla and xAI.

Several Tesla shareholders have initiated lawsuits, alleging that the redirection of resources to xAI has adversely affected Tesla’s investors. These cases are currently under review in the Delaware Court of Chancery.

Why It Matters: The potential partnership with xAI could significantly bolster Tesla’s AI capabilities, potentially leading to enhanced features and services.

However, the deal also raises questions about the fair distribution of resources and potential conflicts of interest, which could have implications for Tesla’s shareholders and overall market performance.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.