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Elon Musk’s ambitions in artificial intelligence are quickly moving from vision to strategy and now, into full-blown execution. Over the past week, Musk has revealed two major efforts aimed at funneling funding into his AI company, xAI, using his broader business ecosystem as a launchpad.
Tesla Shareholders to Vote on xAI Investment
This weekend, Musk confirmed that Tesla shareholders will soon vote on whether the company should invest in xAI. The announcement came shortly after The Wall Street Journal reported that SpaceX is exploring a potential $2 billion investment in the AI venture.
Earlier in the week, Musk also said that xAI’s chatbot, Grok, would be integrated into Tesla vehicles “next week at the latest,” a move that underscores his goal of deeply embedding AI into the Tesla experience.
Musk’s Companies Are Starting to Blend Together
Musk’s approach to AI sets him apart from other tech leaders. While companies like Google or Microsoft operate within clearly defined structures, Musk’s empire including Tesla, SpaceX, xAI, X (formerly Twitter), and The Boring Company is increasingly intertwined. He appears to be building a unified, AI-driven ecosystem rather than isolated silos.
“The relationship and interplay between his private companies and a public company (Tesla) is different from most other companies,” said Garrett Nelson, senior VP at CFRA Research. “Most companies do everything under one corporate umbrella. Musk doesn’t.”
This blending isn’t entirely new, but recent developments show that Musk’s entire business constellation often called “Musk Inc.” is being reshaped around AI.
Tesla Is Becoming More Than an Auto Company
Musk has repeatedly said that Tesla should be seen not just as a car manufacturer, but as an “AI robotics company.” That shift is becoming more visible as Tesla pushes projects like self-driving software, humanoid robots, and its custom-built Dojo supercomputer Musk’s ambitious attempt to compete with Nvidia.
In 2024, he stated: “We should be thought of as an AI robotics company,” arguing that those who view Tesla as merely an automaker are using “the wrong framework.”
Tesla’s recent launch of its robotaxi service in Austin reinforces that message, even as its core EV business struggles with slowing sales.
The ‘Muskonomy’: A Shared Business Ecosystem
Musk is also pitching a broader vision one that invites shareholders to buy into the “Muskonomy,” his term for the interconnected network of SpaceX, X, xAI, Tesla, and more. He’s hinted that longtime shareholders of one company might receive preferential treatment if another goes public.
According to Nelson, this resource-sharing could help Tesla meet the high data demands required to build scalable autonomous driving. “Tesla’s approach to autonomy needs a global neural network, and the data requirements for that are massive,” he explained.
But Musk’s strategy isn’t without risk.
xAI Faces Public Scrutiny
Grok, xAI’s flagship chatbot, recently sparked controversy after sharing antisemitic responses on X. xAI apologized, blaming the issue on new engagement-focused training protocols that inadvertently surfaced extremist content.
Last year, Musk was also criticized for redirecting $500 million worth of Nvidia AI chips from Tesla to xAI and X. While he argued that Tesla didn’t have the infrastructure ready to use the chips at the time, the move highlighted the tension between resource sharing and prioritization.
Gadjo Sevilla, an analyst at EMARKETER, believes Musk sees Tesla and SpaceX as “mature businesses” that can help fund xAI. But reallocating resources from one company to another could stall innovation particularly in the highly competitive EV space.
“The strategy of cannibalizing one business to prop up another one could take its toll,” Sevilla warned. “Especially since competing carmakers are laser-focused on EVs alone.”
Despite the integration efforts, Musk shut down speculation of a potential Tesla – xAI merger. When asked about it on X, he simply responded, “No.”
The Cost of Competing in AI
Building advanced AI systems isn’t cheap. xAI’s latest model, Grok 4, requires billions to develop and train. Musk has already raised around $12 billion in Series A, B, and C funding rounds. In March, he merged xAI with X in an all-stock deal that valued xAI between $33 billion and $80 billion.
Still, the company is projected to spend $13 billion in 2025 alone, according to Bloomberg. That kind of burn rate demands serious capital and quickly.
And Musk isn’t the only one feeling the pressure.
The AI Spending War
Tech giants like Amazon, Meta, Microsoft, and Google are in the midst of an AI spending spree. Combined, they’re expected to spend over $320 billion on capital expenditures in 2025 up from $246 billion in 2024.
Amazon alone plans to invest more than $100 billion this year to scale AWS and boost AI infrastructure. Meta’s Mark Zuckerberg recently pledged to spend “hundreds of billions” to build artificial general intelligence (AGI), stating that compute resources are the key to reaching superintelligence.
Wall Street seems to agree. Following Zuckerberg’s announcement, Meta’s stock rose 1.3%, signaling that the market now sees underinvesting not overspending as the greater risk in the AI arms race.
Final Thoughts
Elon Musk is betting big on AI not just as a future technology, but as the glue holding together his growing network of companies. As xAI continues its aggressive push to compete with the likes of OpenAI and Google, Musk is strategically leveraging his entire empire to stay in the race.
Whether this convergence of businesses will pay off or stretch his companies too thin remains to be seen. But one thing is clear: AI is no longer just part of Musk’s vision. It is the vision.
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