Musk Denies Licensing xAI to Tesla Amid

Earnings Discussions

Elon Musk denies reports of a licensing deal between Tesla and xAI. Although Tesla benefited from xAI input, no formal agreement or investment has been made.

Musk Rejects Licensing Allegations

Elon Musk has firmly denied recent reports that claimed his AI startup, xAI, planned to offer Tesla equity in exchange for access to its AI models. A Wall Street Journal article suggested Tesla would license xAI’s models to boost its Full Self-Driving (FSD) software and autonomous vehicle tech. In return, xAI would receive a portion of Tesla’s revenue from its driver-assistance features.

Responding directly on his platform X (formerly Twitter), Musk stated,

“Tesla has learned a lot from discussions with engineers at xAI that have helped accelerate achieving unsupervised FSD, but there is no need to license anything from xAI.”
He labeled the report as “not accurate.”

Inside the Alleged Partnership Proposal

According to sources cited by the Wall Street Journal, xAI was expected to help Tesla enhance several features. These included a voice assistant for its vehicles and software for the Optimus humanoid robot. The report also mentioned that xAI and Tesla discussed a 50-50 revenue split, depending on Tesla’s level of reliance on xAI’s technology.

However, no final agreement was reached. The revenue-sharing arrangement was said to depend on how much Tesla incorporated xAI’s models versus using its own systems. xAI did not respond to requests for comment.

Why Musk Started xAI

Musk launched xAI in 2023 to compete with OpenAI, a Microsoft-backed AI powerhouse. Since then, many have speculated about a possible merger of Tesla’s infrastructure with xAI’s capabilities. Musk has shared that xAI could play a role in developing Tesla’s full self-driving technology and help build its new data center infrastructure.

Moreover, he suggested that xAI’s chatbot, Grok, might one day integrate with Tesla’s vehicle software. This integration could enhance how drivers interact with Tesla systems, adding a layer of personalization and automation.

A Potential $5 Billion Investment

In July, Musk revealed that he and Tesla’s board would consider a $5 billion investment in xAI. This disclosure fueled further speculation about a deeper collaboration between the two entities. It also raised questions about how closely Tesla and xAI might align their operations moving forward.

Final Word: Clarification and Future Possibilities

Despite the media buzz, Musk maintains there is no formal licensing agreement between Tesla and xAI. He clarified that while Tesla has benefited from discussions with xAI engineers, the company does not rely on any of xAI’s licensed technology. For now, xAI’s role in Tesla’s future remains unofficial and undefined.