Tesla announced a $2 billion investment in xAI, Elon Musk's artificial intelligence startup, as part of xAI's recent $20 billion funding round. The investment, disclosed in Tesla's fourth-quarter report, was made on market terms consistent with other investors and is expected to close in the first quarter of 2026.
The move aims to accelerate Tesla's development in autonomous driving and robotics by leveraging xAI's work on large language models like Grok. However, the decision has raised corporate governance concerns among some investors, particularly as it follows a non-binding shareholder proposal against such an investment that failed to pass in November 2025 and an ongoing shareholder lawsuit regarding potential conflicts of interest.