Tesla Shareholders Nix Investment in Musk’s xAI

A Tesla Inc. shareholder proposal authorizing the board to invest in xAI failed to pass, clouding prospects for the Elon Musk–led carmaker to take a stake in his artificial intelligence startup, Lindsay Blakely, Kara Carlson, and Kurt Wagner reported for Bloomberg News.

Musk has been publicly supportive of Tesla making the investment and had floated the idea of a $5 billion infusion last year. (Image: xAI)

The nonbinding measure garnered 1.06 billion votes in favor of authorization, exceeding the 916.3 million votes against, Tesla disclosed in a recent regulatory filing.

However, more than 473 million shareholders abstained — more than twice the number for any other proposal on this year’s proxy. Tesla’s bylaws count abstentions as votes against, so the measure did not pass, Craig Trudell also reported for Bloomberg News.

Because the proposal was advisory, the board will consider next steps in light of the level of shareholder support, General Counsel Brandon Ehrhart said during Tesla’s annual shareholder meeting.

Musk has been publicly supportive of Tesla making the investment and had floated the idea of a $5 billion infusion last year.

The companies already have business ties: xAI spent nearly $200 million on Tesla’s Megapack batteries in 2024, and Tesla has integrated the AI startup’s chatbot, Grok, into its vehicles.