CONFLICT OF INTEREST
Musk has a habit of treating his various separate companies as parts of a unified whole. The most egregious example was Tesla’s acquisition of SolarCity in 2016, whereby the EV company bought a spiralling rooftop solar business that was chaired by Musk, owed him (and SpaceX) money and was run by his cousin.
Even the analyst Jonas later characterised that deal as a “controlled detonation”.
When Musk first bought Twitter, which became X, he brought in engineers from Tesla to review its code. A few months ago, he redirected thousands of Nvidia chips destined for Tesla to xAI, explaining it away as a logistical hiccup.
If Tesla were to now actually invest billions in xAI, and/or share revenue with it, the potential conflict of interest could hardly be clearer. X has struggled as a business since Musk’s takeover, with advertising revenue under pressure and Fidelity, one of the co-investors, marking down the value of its stake enormously.
Musk has indicated that the shareholders of X would own 25 per cent of xAI, though it isn’t clear if that would be individually or collectively through X itself. Either way, any infusion of cash or revenue potential from Tesla would be useful not only to xAI but to the broader X project.
Such a deal would also make a mockery of Tesla’s justification for awarding a gigantic options package to Musk and then pushing for its reinstatement after a Delaware court struck it down.
Chairwoman Robyn Denholm exhorted shareholders to vote yes by arguing, in part, that it would keep Musk’s roving eye focused on Tesla: “We want those ideas, that energy and that time to be at Tesla, for the benefit of you, our owners,” she wrote.
This followed Musk’s unsubtle threat to take his AI vision elsewhere if he didn’t get a bigger stake in Tesla (after he had sold off a chunk during the takeover of Twitter).
From: channelnewsasia
Business News
