Musk Denies Reports of xAI Involvement in Talks Over Tesla Revenue Sharing

Photo : Reuters

Elon Musk has denied a recent report claiming that his artificial intelligence startup, xAI, is in talks with Tesla over a potential revenue-sharing agreement. The report, published by The Wall Street Journal on Saturday, suggested that Tesla would license xAI’s AI models to enhance its driver-assistance software, including Full Self-Driving (FSD) technology, and share future revenue with the AI company in return.

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According to The Wall Street Journal, which cited unnamed sources familiar with the matter, the proposed arrangement involved xAI contributing its AI expertise to support Tesla’s development of FSD technology. In exchange, xAI would receive a portion of the revenue generated from Tesla’s driver-assistance and self-driving software. The report also stated that xAI could assist Tesla in developing other features, such as a voice assistant for its electric vehicles and software to operate its humanoid robot, Optimus.

However, Musk quickly refuted the report on Saturday, taking to his social media platform, X (formerly known as Twitter), to clarify the situation. He acknowledged that Tesla had benefited from discussions with xAI engineers, which had accelerated the progress towards achieving unsupervised FSD. Despite this collaboration, Musk emphasized that there was no need for Tesla to license any technology from xAI. He labeled the report as "not accurate."

The Journal further reported that the revenue-sharing terms between Tesla and xAI would depend on how heavily Tesla relied on xAI’s AI technology versus its own proprietary developments. It was suggested that xAI executives had discussed the possibility of splitting revenue evenly with Tesla from FSD, depending on the extent of xAI's involvement in the technology.

Founded by Musk last year, xAI was launched with the intention of competing with major players in the AI field, such as Microsoft-backed OpenAI. From the outset, concerns were raised about how Musk would manage his various ventures, with some observers worrying that he might direct Tesla resources toward the new AI startup. 

Musk has consistently maintained that xAI would be instrumental in advancing Tesla's FSD technology and enhancing its future developments. He has also indicated that xAI could play a role in building Tesla’s new data center and that there would be opportunities to integrate xAI’s chatbot, Grok, with Tesla’s software systems. 

In July, Musk revealed that he and Tesla’s board of directors had plans to discuss a potential $5 billion investment in xAI, further signaling his commitment to the AI company's growth and integration with Tesla’s operations.

As of now, there is no official confirmation of any formal agreement between Tesla and xAI, and Musk’s denial casts doubt on the likelihood of any imminent deal. Nevertheless, the ongoing collaboration between the two companies highlights Musk’s long-term vision of utilizing AI to enhance Tesla’s technological capabilities.