Outlook Business Desk
Tesla has committed $2 billion to xAI, Elon Musk’s artificial intelligence venture that developed Grok AI. The move reinforced Tesla’s AI-led strategy and potentially supporting Musk’s efforts to meet milestones linked to his performance-based pay.
Elon Musk’s proposed compensation comes as stock-based awards that could total $1 trillion in value, but payouts depend entirely on Tesla achieving demanding operational and valuation milestones, rather than guaranteeing immediate personal wealth.
The stock award is split into 12 tranches, with the first released only after Tesla hits a $2 trillion market capitalisation. Unlocking the full package requires the company’s valuation to surge to $8.5 trillion.
Tesla’s electric vehicle business is facing pressure as Chinese rivals introduce lower-priced, updated models. Ongoing production delays and intensifying competition continue to weigh on growth, even as EV sales remain the company’s main revenue source.
Elon Musk is steering Tesla towards an artificial intelligence-led future, moving beyond electric vehicles. Company executives say xAI could cut costs by limiting in-house AI infrastructure while strengthening Tesla’s plans for autonomous vehicles.
Key milestones include deploying one million robotaxis, producing one million Optimus humanoid robots and reaching 10 million Full Self-Driving subscriptions, with xAI expected to help manage large autonomous fleets.
Musk also told investors Tesla will phase out Model S and X vehicles, converting their production lines into Optimus robot manufacturing, using existing factory space to accelerate the company’s shift toward robotics.
Although, Elon Musk has a history of missing robotaxi timelines, with nationwide targets later scaled back. Tesla now runs a limited robotaxi service in Austin, Texas, as reported by Reuters, keeping investors cautious despite renewed assurances on future production timeline.