Elon Musk’s artificial intelligence startup xAI will help develop key Tesla initiatives and potentially share some of the EV maker’s revenue. According to sources The Wall Street Journal.
The proposal presented to investors reportedly calls for Tesla to license xAI’s AI models to power its Full Self-Driving (FSD) driver assistance software, as well as its Siri-like voice assistant and Optimus humanoid robot.
The amount of revenue Tesla shares with xAI will depend on how much the startup’s technology is used, but xAI is considering an equal split with FSD, the report added.
Representatives from xAI told investors that the company will be a key technology provider for Tesla’s future software products, the people said. The Wall Street Journal.
Tesla and xAI did not immediately respond to requests for comment.
The talks with Tesla about a revenue-sharing deal come as xAI becomes increasingly cash-rich and ramps up its own projects.
xAI raised $6 billion in May from investors including Andreessen Horowitz, Sequoia Capital, and Saudi Arabia’s Prince Alwaleed bin Talal, and last weekend, the company brought online a new supercomputer called Colossus, which is designed to train a large-scale language model called Grok, a rival to OpenAI’s GPT-4.
Grok is only available to paying subscribers of Musk’s social media platform X, but many Tesla experts believe it will eventually be the artificial intelligence that powers Optimus.
Musk himself has also hinted at a possible deeper relationship between xAI and Tesla, saying he plans to discuss it with the automaker’s board of directors in July. Potential investment of $5 billion He was CEO of AI startup xAI, and on an earnings call that month, he told analysts that xAI is already “helping advance self-driving and the buildout of new Tesla data centers.”
But Musk’s approach to integrating his companies has been controversial among some investors and lawmakers, and in June he acknowledged transferring Nvidia chips designed for training neural networks from Tesla to X and xAI.
“Tesla didn’t have anywhere to send the Nvidia chips to power them up, so they would have just been left sitting in a warehouse.” He posted on X.
Meanwhile, Musk increasingly sees self-driving as key to Tesla’s future, saying the company will spend $10 billion on AI this year. The company will also reportedly unveil its long-awaited robotaxi at an event in October.
Tesla bulls like Ark Investment’s Cathie Wood see robotaxis as a cornerstone of the company’s valuation and potential upside: In July, she predicted that a self-driving taxi platform could spark a tenfold rise in Tesla’s stock price.
“The self-driving taxi platform is the biggest AI project evolving right now,” she told Bloomberg TV.
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