Tesla CEO Elon Musk announced on Thursday that he and the board of the electric vehicle company will discuss a $5 billion investment in his artificial intelligence startup xAI, raising concerns about potential conflicts of interest. Musk, who launched xAI last year to compete with Microsoft-backed OpenAI, has sparked worries that he might divert Tesla resources to support the AI venture. Despite these concerns, Musk’s proposal has garnered substantial support from his followers. A social media poll he conducted showed that over two-thirds of nearly 1 million respondents favored Tesla investing in xAI, although it's unclear how many of these respondents are actual Tesla investors. The poll came just after Tesla reported that its second-quarter automotive gross margin and profit fell short of Wall Street estimates, following price cuts and sales incentives.

Musk indicated that the public’s support for the investment will be discussed with Tesla’s board. He also mentioned during Tesla’s earnings call that xAI could advance full self-driving technology and contribute to the development of a new Tesla data center, with opportunities to integrate xAI’s chatbot, Grok, into Tesla's software. However, experts have criticized the potential investment, suggesting it might not be in the best interest of Tesla shareholders and highlighting the uncertain profitability of AI ventures. Musk’s history with AI includes leaving OpenAI in 2018 due to a potential conflict with Tesla’s AI development for self-driving vehicles. He revealed in April that xAI is hiring some engineers from Tesla to retain talent amid recruitment by OpenAI. Recently, xAI raised $6 billion in Series B funding, achieving a post-money valuation of $24 billion with investors like Andreessen Horowitz and Sequoia Capital. Despite Musk's plans for xAI, including partial ownership by investors in the social media platform X, his past ventures have faced scrutiny over conflicts of interest, such as the controversial acquisition of SolarCity by Tesla in 2016.