US EditionTesla to invest $2 billion in xAI, Elon Musk’s OpenAI competitor
Tesla’s $2 billion investment in xAI supports its Master Plan Part IV to integrate digital AI with robotics and autonomous vehicles, enhancing AI collaboration, Tesla said.
- On Wednesday, Tesla disclosed it had agreed to invest $2 billion in xAI and entered a framework agreement to evaluate AI collaborations, with the deal expected to close in Q1'2026.
- The share purchase tied to xAI's $20 billion Series E announced earlier this month, which valued the company at approximately $230 billion, and Tesla justified the move by citing Master Plan Part IV.
- Grok, xAI's large language model and chatbot/image generator, has faced probes from the European Commission and California Department of Justice, with Malaysia and Indonesia suspending Grok after a recent release enabled deepfake images.
- Despite a failed non-binding November measure, the Tesla board approved the investment while Tesla shareholders sue Elon Musk for breach of fiduciary duty and seek court action to transfer his xAI ownership.
- Tesla said the deal is intended to help deploy AI into the physical world at scale, highlighting Optimus, Tesla semitrucks, and other autonomous projects with investors including Nvidia and Qatar Investment Authority.
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