Elon Musk Rejects Merger Between Tesla and xAI, Despite Investment Talks

Tesla CEO and tech billionaire Elon Musk has stated he does not support a merger between Tesla Inc. and his AI company, xAI. This comment came as a direct response to a question posed by a user on X (formerly Twitter) asking Tesla investors whether they would support such a merger. Musk simply replied, “No,” shutting down any merger speculation between the electric vehicle giant and his growing AI venture.

The clarification follows Musk’s earlier announcement on Sunday that he would seek a shareholder vote on whether Tesla should invest in xAI. Musk had previously expressed optimism about such a partnership, saying “it would be great” if Tesla could invest in the AI company. However, the recent statement makes it clear that while investment may be on the table, a full corporate merger is not under consideration.

xAI, the artificial intelligence firm behind the Grok chatbot that rivals ChatGPT, has been gaining momentum. In March 2025, xAI acquired social media platform X (formerly Twitter) in a $33 billion deal, boosting the group’s valuation to around $80 billion. Reports suggest that xAI is now seeking further funding at a valuation of over $120 billion, with some discussions reportedly placing it as high as $200 billion.

Additionally, The Wall Street Journal reported that Musk’s aerospace firm, SpaceX, has already committed $2 billion to xAI as part of a $5 billion equity funding round. This highlights Musk’s intent to scale xAI rapidly, leveraging his ecosystem of companies without necessarily integrating them through mergers.

As of now, both Tesla and xAI have not provided official statements to Reuters regarding the future of any potential collaboration. Musk’s comments indicate a strategic preference for cross-company investment over consolidation, allowing each enterprise to maintain operational independence while pursuing synergistic opportunities in AI, mobility, and automation.

Source: Reuters