Musk evaluates possible Tesla $5 billion xAI funding amid its steady Bitcoin reserves Musk evaluates possible Tesla $5 billion xAI funding amid its steady Bitcoin reserves
Tesla's Bitcoin holding remains unchanged during the previous quarter.
2 min read
Updated: Jul. 24, 2024 at 11:05 am UTC
NORAD and USNORTHCOM Public Affairs / Public Domain. Remixed by CryptoSlate
Elon Musk appears to be considering whether his Electric Vehicle (EV) manufacturing company, Tesla, should invest $5 billion in his artificial intelligence (AI) startup, xAI.
On July 24, Musk polled his followers about the potential investment, with early results showing support for the move. However, Musk clarified that the poll was only exploratory and any decision would need board and shareholder approval.
Musk said:
“Board approval and shareholders vote are needed, so this is just to test the waters.”
As of press time, more than 500,000 people had participated in the poll, with around 69% voting in favor of the move.
Meanwhile, this poll has raised concerns about Musk diverting Tesla’s resources to other ventures. Yet, during Tesla’s July 23 earnings call, Musk dismissed these worries. He emphasized that xAI could advance Tesla’s self-driving capabilities and aid in developing a new data center. Musk also mentioned opportunities to integrate xAI’s chatbot, Grok, with Tesla’s software.
However, if the investment gets approved, it would substantially increase xAI’s valuation to more than $24 billion. The move would also provide the AI startup adequate funding to compete with leaders like OpenAI, Google, and Anthropic in the generative AI field.
Tesla’s Bitcoin holdings unchanged
In a parallel development, the earnings call also revealed that Tesla’s Bitcoin holdings remained unchanged for the eighth consecutive quarter, with no purchases or sales between April and June 2024.
The report shows the firm held $184 million of digital assets as of June 30. However, Bitcoin Treasuries data pegs Tesla as the world’s third-largest Bitcoin holder, behind MicroStrategy and Marathon Digital. The EV manufacturer holds 9,720 Bitcoin, valued at about $640 million at press time.
Tesla began its Bitcoin journey in February 2021 by purchasing $1.5 billion worth of Bitcoin. In the second quarter of 2022, it sold over 30,000 Bitcoin for $936 million. Since then, Tesla has remained silent about its Bitcoin holdings despite community calls for more purchases.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Tesla
Tesla is a manufacturer of electric vehicles and a clean energy company led by billionaire Elon Musk.
South African-born Elon Musk has founded several companies, including X.com (which later became PayPal), SpaceX and Tesla Motors.