Elon Musk Denies Report of xAI Seeking Share in Future Tesla Revenue

Elon Musk has denied a recent report suggesting that his artificial intelligence startup, xAI, is in talks to secure a share of future revenue from Tesla in exchange for providing access to its technology and resources. According to a report by The Wall Street Journal, the proposed arrangement would involve Tesla licensing xAI’s artificial intelligence models to enhance its driver-assistance software, full self-driving (FSD) technology, and other features, with xAI receiving a portion of the revenue generated from these technologies.

The report, which cites unnamed sources familiar with the discussions, also mentioned that xAI could support the development of additional features for Tesla, including a voice assistant for its electric vehicles and software to power Tesla’s humanoid robot, Optimus. The terms of the revenue-sharing agreement would reportedly be contingent on how extensively Tesla utilized xAI’s technology compared to its own. The discussions included a proposal for an equal revenue split between xAI and Tesla for the FSD technology.

However, Musk, who is also the CEO of Tesla, took to his social media platform X (formerly known as Twitter) late on Saturday to refute the claims made by The Wall Street Journal. “Tesla has learned a lot from discussions with engineers at xAI that have helped accelerate achieving unsupervised FSD, but there is no need to license anything from xAI,” Musk wrote. He added that the report is “not accurate,” suggesting that while there have been productive exchanges between engineers from both companies, there is no formal licensing agreement or revenue-sharing plan in place.

Musk’s denial comes amidst growing scrutiny over the relationship between his various business ventures, including Tesla, xAI, SpaceX, and other companies. Since Musk launched xAI last year with the intent to compete with established players like Microsoft-backed OpenAI, there have been concerns about whether the resources and focus of Musk’s companies could become intertwined in ways that might not always be in the best interest of each entity’s shareholders.

Musk has previously stated that xAI aims to assist in advancing Tesla’s full self-driving technology and in building the automaker’s new data center. He has also mentioned potential integrations of xAI’s chatbot, Grok, with Tesla’s software, highlighting the collaborative potential between the companies without specifying any financial or contractual commitments.

Despite Musk’s public rejection of the report, the exact nature of the collaboration between xAI and Tesla remains a topic of interest among investors and industry observers. The potential integration of xAI’s advanced AI capabilities into Tesla’s technology suite could significantly enhance the performance of Tesla’s vehicles, particularly in the realm of autonomous driving, where Tesla has been striving to achieve fully unsupervised driving capabilities.

Musk’s statement also underscores the competitive dynamics in the rapidly evolving field of artificial intelligence, where companies are seeking to leverage AI technologies to gain an edge in their respective markets. While Tesla has been a leader in electric vehicles and autonomous driving technologies, its ongoing efforts to achieve fully autonomous driving have faced challenges, including regulatory scrutiny and technical hurdles.

By leveraging AI, companies like Tesla can improve not only vehicle performance but also customer experience through innovations like voice assistants and more intuitive in-car interfaces. However, Musk’s assertion that Tesla does not need to license xAI’s technology indicates confidence in Tesla’s in-house capabilities and a desire to keep the company’s technological developments proprietary.

As the relationship between Tesla and xAI continues to unfold, stakeholders will be keen to see how these two companies might collaborate in the future, and whether Musk’s AI ambitions will have broader implications for Tesla’s strategic direction. For now, Musk’s response serves to quell speculation about a formal revenue-sharing arrangement between the two entities, at least in the immediate term.