Tesla Bets $1 Trillion on Musk’s AI Future

(The Post News) – Tesla’s investors handed chief executive Elon Musk a major victory Thursday. They endorsed a $1 trillion compensation package. This solidifies his hold on the automaker. It also strengthens his ambitious vision to reshape Tesla into an AI and robotics powerhouse.

More than 75% of investors at Tesla’s annual meeting in Austin, Texas, voted in favour of the plan. Approval sends a clear message: shareholders believe in Musk’s ambitious strategy to merge Tesla operations with his AI startup xAI.

Musk Tightens Grip on Tesla’s AI Direction

The compensation package rewards Musk only when Tesla hits aggressive targets. These targets include delivering one million Optimus robots, deploying one million robotaxis, and achieving an $8.5 trillion valuation.

In exchange, Musk gets long-term control of Tesla. This move has reassured investors. He will not divert attention to SpaceX or xAI before delivering for Tesla.

“Tesla’s not just a car firm,” he said, to ringing applause from the shareholders. “It’s an AI company that builds cars, robots and energy systems.

xAI is Musk’s company that plays an increasingly important role in Tesla’s roadmap. It is a 2023 startup building large-scale reasoning models. These models drive the Grok chatbot on X. According to Musk, these models will train Tesla’s self-driving systems and humanoid robots.

“AI is the brain of Tesla’s future,” Musk says. “With xAI, we’re designing that brain in-house.”

Tesla will also build its own semiconductor factory “Terafab” to manufacture AI chips at scale. The result would be a reduction in the dependence on suppliers like Samsung and TSMC. It would align with the xAI chip research as a step toward full vertical integration.

The plan also faced opposition from some institutional investors. Norway’s Norges Bank Investment Management was among the opponents. They were concerned over its scale and potential dilution. Critics say the situation will lead to Musk having conflicts of interest in both Tesla and xAI.

Yet, the majority of shareholders voted in support of Musk. Many believed Musk deserved the benefit of the doubt. They reasoned this because he transformed Tesla from a niche EV startup into the world’s most valuable carmaker.

“Shareholders believe Musk is the only person who can make Tesla’s AI future real,” Wedbush analyst Dan Ives said. “Now he has to prove it.”

A Bet on AI and Robots

Tesla faces declining car sales. It is also dealing with regulatory challenges over self-driving technology. The company faces increasing pressure from BYD and Waymo. Yet investors continue to see AI as the company’s next major growth driver. Success will make Tesla the world’s first trillion-dollar AI-driven manufacturing company. But if Musk fails, the trillion-dollar wager will turn into a unique cautionary tale in history. Either way, the future of Tesla is connected to artificial intelligence. At its core is xAI.

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Boipelo Leburu

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I am a journalist specializing in politics, war, and economic issues, dedicated to bringing you news from around the globe and from our local communities. I act as a watchdog and facilitator in society, providing the public with a platform to voice their opinions on social issues and hold their leaders accountable. With a deep appreciation for diverse cultures and ideas, I am passionate about exploring the complexities of human experiences and storytelling in innovative ways. My goal is to deliver engaging information that fosters discussions and debates, ultimately creating a well-informed community through rigorous research, analysis, and solution-based journalism.

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