February 24, 2024

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Elon Musk talks about why he wants more control over Tesla before building artificial intelligence

Elon Musk talks about why he wants more control over Tesla before building artificial intelligence

Musk argued in a post on X that the car company is a collection of dozens of startups (File)

Washington:

Elon Musk has warned that he would prefer to build artificial intelligence products outside of Tesla if he does not achieve 25% voting control, suggesting the billionaire wants a bigger stake in the world's most valuable electric car maker.

Musk, Tesla's largest single shareholder with more than 12% of the company, was responding to a social media post questioning why he needed another large compensation package to remain motivated.

He said the reason a new plan had not been put in place was because the company was still waiting for a ruling in a shareholder lawsuit against a previous $55 billion package — an unprecedented amount at the time.

Musk argued in a post on X that the car company is a collection of dozens of startups.

He called for a comparison between Tesla and General Motors, which is traditionally one of the leading car manufacturers in the world.

Tesla, for example, is developing the Optimus robot, and last month published a video demonstrating improvements it had made to the human prototype.

The automaker is also investing more than $1 billion in the Dojo supercomputer project, which will train machine learning models behind the electric car maker's self-driving systems that analysts estimate could add $500 billion to Tesla's value.

At Tesla's inaugural AI Day in 2021, Musk said he wanted to show that the company is more than just an electric car maker, but “arguably the leader in real-world AI.”

“I'm uncomfortable with Tesla developing into a leader in AI and robotics without 25% voting control,” the CEO posted on X. “If I own 25%, it means I'm influential, but I could be overtaken if double the number of shareholders voting against me versus for me. At 15% or less, the ratio of up and down that would exceed me makes a takeover by questionable interests very easy.”

Musk said he would be fine with a dual-class voting structure to allow this, “but I'm told it's impossible to achieve beyond the IPO in Delaware.”

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After doubling in 2023, Tesla shares have fallen 12% this year, wiping out more than $94 billion in market value.

The world's richest person is grappling with shareholder discontent over a wide range of issues, from Tesla's succession planning to accusations that he was sidetracked by his work with X, the platform formerly known as Twitter that he bought for $44 billion in 2022 and sold for billions of dollars. Tesla stock to finance.

The company has also been hit with a barrage of negative news: a radical change in stance on electric vehicles from car rental giant Hertz Global Holdings Inc., another price cut in China, and signs of rising labor costs.

“What is Tesla? An automotive, energy or artificial intelligence company,” said Daniel Kollar, head of the automotive and mobility practice at consulting firm Intralink. “If it's not an AI company, I don't see a problem with starting a new company. However, I don't see his behavior or choice of language benefiting any of his companies now.”

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)