Tesla shareholders will vote in November on whether the electric carmaker should invest in Elon Musk’s artificial intelligence startup xAI, according to a proxy filing that also includes a proposed $1 trillion pay package for the CEO.
The shareholder proposal was submitted by Stephen Hawk, a Florida-based investor holding about $2,000 worth of Tesla stock. In his supporting statement, Hawk wrote: “Tesla’s integration of Grok into its vehicles demonstrates the tangible benefits of collaboration with xAI. As Tesla pivots toward AI-driven technologies, including Full Self-Driving and robotics, a strategic investment in xAI would secure access to advanced AI capabilities, enhance product innovation, and drive shareholder value.”
Unlike its usual practice of recommending against such measures, Tesla’s board took a neutral stance on the proposal. If approved, Tesla would become the second Musk-led company to back xAI, after SpaceX committed $2 billion as part of the startup’s $5 billion equity raise. Musk also merged X, the platform formerly known as Twitter, with xAI earlier this year.
Some investors have previously raised concerns that xAI could compete with Tesla, which Musk has often described as an AI-focused company. A shareholder lawsuit accusing Musk of creating a rival AI firm was dismissed last year.
The proposal comes as Tesla faces slowing EV sales and challenges in launching its long-promised robotaxi fleet. Musk has argued he needs a larger stake—more than 25% control—to guide Tesla’s AI efforts, which include autonomous driving and the Optimus humanoid robot.
Tesla is simultaneously asking shareholders to back a new 10-year compensation package for Musk, tying payouts to milestones such as delivering 20 million vehicles annually, producing one million Optimus robots, and reaching a market capitalization above $8 trillion. The filing follows the company’s appeal of a Delaware judge’s decision to strike down Musk’s earlier $56 billion pay package.
“Tesla’s not going to get to $8 trillion market cap based on FSD and robotaxi. To get to that $8 trillion, you kind of need xAI,” said Gene Munster, managing partner at Deepwater Asset Management. “Just the excitement around xAI and Tesla together is going to move Tesla’s valuation higher,” he added, noting that access to xAI’s resources, such as compute, could also strengthen Tesla’s AI ambitions.
