Musk Rules Out Tesla-xAI Merger, Despite Possible Investment Talks

Elon Musk stated on Monday that he does not back a merger between Tesla Inc. (NASDAQ: TSLA) and xAI, his artificial intelligence startup behind the Grok chatbot. Responding directly to a question on X about whether Tesla shareholders favored a merger with xAI, Musk simply replied, “No.” The statement follows Musk’s earlier comment that he would ask Tesla investors to vote on whether the electric vehicle maker could invest in xAI, suggesting alternative forms of collaboration remain on the table.

Tesla and xAI have not issued official statements to clarify the potential structure of any partnership. xAI, founded by Musk last year, aims to develop advanced AI systems that compete with leading players such as OpenAI’s ChatGPT and Anthropic’s Claude.

Musk’s latest AI venture has already attracted significant capital. According to Reuters, sources in June revealed that xAI had been in discussions to raise new funding at a valuation exceeding $120 billion, with figures as high as $200 billionreportedly under consideration. In March, xAI acquired X (formerly Twitter) in a $33 billion deal, bringing the combined entity’s value to roughly $80 billion at the time (Reuters, March 2025).

Additionally, The Wall Street Journal reported on July 12 that Musk’s SpaceX has pledged approximately $2 billion to xAI as part of a larger $5 billion equity round, underscoring his aggressive push to position the startup as a heavyweight in the AI race (WSJ, July 2025).

For now, a full merger between Tesla and xAI appears unlikely, though Musk’s comments leave the door open for strategic investments or partnerships subject to shareholder approval.