Elon Musk warned he would rather build AI products outside of Tesla Inc. if he doesn’t achieve 25% voting control, suggesting the billionaire wants a bigger stake in the world’s most valuable electric vehicle maker.
Musk, Tesla’s single largest shareholder with more than 12% of the company, was responding to a social media post questioning why he would need another large compensation package to stay motivated. He said the reason no new plan has been put in place is because the company is still awaiting a verdict in a shareholder suit against an earlier $55 billion package — an unprecedented amount at the time.
Musk argued in a post on X that the car company is a collection of a dozen startups. He called for a comparison between Tesla and General Motors Corp., traditionally one of the auto industry’s global leaders. Tesla, for example, is developing the Optimus robot, and last month posted a video showing improvements it’s made to the humanoid prototype.
The automaker is also investing more than $1 billion into its Dojo supercomputer project, which will train the machine-learning models behind the EV maker’s self-driving systems and which analysts have estimated 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 carmaker, but is “arguably the leader in real-world AI.”
I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
— Elon Musk (@elonmusk) January 15, 2024
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control,” the CEO posted on X. “If I have 25%, it means I am influential, but can be overridden if twice as many shareholders vote against me vs for me. At 15% or lower, the for/against ratio to override me makes a takeover by dubious interests too easy.”
Musk said he would be fine with a dual-class voting structure to allow this, “but am told it is impossible to achieve post-IPO in Delaware.”
After more than 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 dissatisfaction over a panoply of issues, from Tesla’s succession planning to accusations that he’s distracted by his work with X, the platform formerly known as Twitter that he bought for $44 billion in 2022 and sold billions of dollars in Tesla stock to fund.
The company has also been hit by a barrage of negative news: an about-face on EVs from car rental giant Hertz Global Holdings Inc., another price cut in China, and signs of rising labor costs.
“What is Tesla? A car, energy, or AI company,” Daniel Kollar, head of consultancy Intralink’s automotive and mobility practice, said. “If it’s not an AI company, then I don’t see an issue establishing a new company. That said, I don’t see his behavior or choice of language benefiting any of his companies now.”
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