Tesla just disclosed a $2 billion investment in Elon Musk's AI startup xAI, making it a major participant in the company's massive $20 billion Series E funding round announced three weeks ago. The move comes despite shareholders explicitly voting against authorizing such an investment last November, raising fresh questions about corporate governance at the EV giant. Tesla's justification? A new "framework agreement" tying xAI's digital AI capabilities to Tesla's physical AI ambitions in robotics and autonomous vehicles.
Tesla just made one of the most controversial investment decisions in its history, and shareholders aren't happy about it. The EV maker revealed Wednesday it's putting $2 billion into Elon Musk's AI startup xAI, becoming a major investor in the company's record-breaking $20 billion Series E round that closed earlier this month. The kicker? Tesla's own shareholders explicitly rejected this exact move just two months ago.
The disclosure came buried in Tesla's Q4 shareholder letter, the same document that revealed the company's profit plunged 46% last year despite beating Wall Street estimates on revenue. Tesla is now officially alongside heavy hitters like Valor Equity Partners, Fidelity, and Qatar Investment Authority in xAI's cap table, with Nvidia and Cisco participating as strategic investors.
But the corporate governance implications are what's really turning heads. Back in November, Tesla put a non-binding measure to shareholders asking for board authorization to invest in xAI. The vote count looked positive at first glance: 1.06 billion votes in favor versus 916.3 million against, according to Bloomberg's reporting at the time. But here's where Tesla's bylaws get interesting - abstentions count as votes against. When those were tallied, the measure actually failed.
