Elon Musk has publicly stated that he does not support a merger between Tesla and xAI, his artificial intelligence startup known for developing the Grok chatbot. The comment comes amid increasing speculation among Tesla investors about closer ties between the electric vehicle (EV) giant and Musk’s growing AI ventures.
Musk Responds to Tesla Investor Concerns
On Monday, July 14, 2025, Musk replied with a simple “No” on his social media platform X (formerly Twitter) in response to a user post asking whether Tesla investors supported a potential merger between Tesla and xAI.
- Musk’s statement puts to rest merger rumours that had circulated following his earlier comments expressing interest in Tesla investing in xAI.
- On Sunday, Musk suggested he would ask Tesla shareholders to vote on whether Tesla should invest in xAI, but clarified that a full merger is off the table.
Background: xAI’s Rapid Growth and Valuation Talks
Founded by Musk, xAI has quickly grown into a major player in the AI space, competing with companies like OpenAI and Anthropic.
Key facts about xAI’s growth:
- In March 2025, xAI acquired X (formerly Twitter) in a $33 billion deal, valuing the combined group at $80 billion.
- According to sources reported by Reuters in June, xAI has been in talks to raise funds at a valuation of over $120 billion.
- Some discussions have suggested a potential valuation as high as $200 billion for xAI.
- The Wall Street Journal reported that Musk’s other company, SpaceX, committed $2 billion as part of a $5 billion equity round for xAI.
Why Musk May Reject a Tesla-XAI Merger
Analysts suggest several reasons behind Musk’s clear stance:
- Tesla’s core focus remains on EVs, energy storage, and autonomous driving, whereas xAI is primarily focused on AI chatbots and foundational AI models.
- Regulatory and shareholder complexities could arise from merging two companies with different market segments and investor priorities.
- Musk may prefer keeping xAI as a separate entity to maintain strategic flexibility in the rapidly evolving AI industry.
What’s Next for Tesla and xAI?
While Musk has ruled out a merger, discussions around Tesla investing in xAI remain active. Shareholder approval would be required for such an investment, and Musk has hinted at bringing this question to a formal vote.
- Tesla may still explore partnerships or minority investments in xAI rather than full ownership.
- xAI’s future valuation and fundraising will likely remain a key watch point for investors in both Tesla and Musk’s broader business empire.
Conclusion
Elon Musk has definitively stated he does not support a Tesla-XAI merger, putting speculation to rest while leaving the door open for potential investment partnerships between the two companies.
As Tesla continues focusing on electric vehicles and energy products, and xAI expands in the competitive AI landscape, investors will be watching closely for further developments regarding funding, partnerships, and shareholder decisions.
