Elon Musk has refuted a report suggesting that Tesla might license AI models from his AI startup, xAI, as part of an agreement to integrate the technology into Tesla’s Full Self-Driving (FSD) software and other systems. The Wall Street Journal reported that Tesla had considered sharing revenue with xAI for using its AI models to enhance FSD, Tesla’s voice assistant, and even the development of its humanoid robot, Optimus.
However, Musk took to X (formerly Twitter) to dismiss the claim, calling the report “not accurate.” In his post, Musk stated, “Tesla has learned a lot from discussions with engineers at xAI that have helped accelerate achieving unsupervised FSD, but there is no need to license anything from xAI.”
The Relationship Between Tesla and xAI
Musk founded xAI in 2023 as a direct competitor to OpenAI, a company he helped co-found but left due to differences in vision. xAI focuses on developing advanced AI models, with an ambitious vision to encompass “most of human knowledge” in its systems. Despite its rapid development, Musk emphasized that these models are too large to be effectively integrated into Tesla’s current vehicle systems.
“The xAI models are gigantic,” Musk wrote, “and couldn’t possibly run on the Tesla vehicle inference computer, nor would we want them to.”
This clarification suggests that while there has been collaboration between engineers from both companies, xAI’s vast models do not directly influence Tesla’s FSD or its current AI development needs.
xAI’s Ambitions and Synergies with Musk’s Companies
Earlier reports, including those from TechCrunch, have indicated that xAI aims to leverage data from Musk’s various ventures, including Tesla, SpaceX, The Boring Company, Neuralink, and X (formerly Twitter), to enhance its AI models. This cross-company collaboration is seen as a unique advantage, positioning xAI to develop powerful AI systems that could potentially benefit Musk’s broader portfolio of companies.
As part of xAI’s $6 billion funding round pitch, it was suggested that xAI’s models could be applied to improve technologies across these firms. While Musk’s recent statement downplays direct licensing to Tesla, xAI’s broader vision still implies synergies with these companies, where knowledge and technology could flow freely between Musk’s ventures.
Shareholder Concerns and Legal Challenges
The overlap between Musk’s businesses has sparked concern among Tesla shareholders, some of whom have filed lawsuits accusing Musk of diverting resources and talent away from Tesla to his new AI startup. Shareholders argue that the creation of xAI poses a conflict of interest, particularly as it could potentially compete with Tesla’s own AI-driven initiatives.
While Musk’s clarification may address some concerns, the close ties between Tesla and xAI — particularly given Musk’s ownership and leadership roles in both companies — will likely continue to draw scrutiny.
Looking Ahead: The Role of AI in Tesla’s Future
Tesla has long been a leader in autonomous driving technology, and AI plays a crucial role in advancing Full Self-Driving (FSD) capabilities. While xAI may not be licensing its massive models to Tesla, the company’s AI research and collaboration with Tesla engineers could still have an indirect impact on the ongoing development of Tesla’s FSD system.
In his post, Musk highlighted the value of conversations between xAI engineers and Tesla, emphasizing that these discussions have accelerated the development of unsupervised FSD, a key milestone in Tesla’s roadmap to full autonomy. This suggests that while the companies may not be formally licensing technology, their collaboration has already provided valuable insights.
Conclusion: A Fine Line Between Collaboration and Competition
Elon Musk’s denial of the need for Tesla to license xAI’s models highlights the fine line he walks between collaboration and competition across his various ventures. While xAI and Tesla may not have a formal licensing agreement, the transfer of knowledge and insights between the two companies demonstrates the potential for synergy without formal integration.
As Musk continues to build out xAI’s capabilities, the extent to which this startup will directly influence Tesla’s technology remains unclear. However, given the ongoing shareholder lawsuits and scrutiny, it’s clear that any perceived overlap between the companies will continue to be a contentious issue. For now, Tesla’s focus remains on improving its FSD system, while xAI continues to grow as an independent but highly complementary entity within Musk’s empire.
