A Bloomberg report indicates that Elon Musk’s private artificial intelligence startup, xAI, plans to develop the AI for Tesla’s Optimus humanoid robot. xAI informed investors of this development.
This news concerns analysts and investors because it contradicts the long-promoted narrative that Tesla is a leading AI company. That narrative has served as a key justification for Tesla’s high stock valuation.
The situation introduces a potential conflict of interest. It could impact shareholder lawsuits alleging Musk breached his fiduciary duty. If Tesla is primarily responsible for the hardware while xAI develops the crucial software, Tesla risks being positioned as a contract manufacturer for Musk’s private enterprise.