Tesla Invests $2 Billion in xAI, Proceeding Despite Shareholder Vote

Tesla has committed $2 billion to Elon Musk's artificial intelligence company, xAI, a move that follows a shareholder vote last November which failed to give the investment explicit approval. The company announced the purchase of Series E preferred shares in its fourth-quarter shareholder update on January 28, 2026.

The decision comes as Tesla reported its first annual revenue decline, with 2025 sales dropping 3% to $94.8 billion, driven by an 8.6% fall in vehicle deliveries. Despite this, quarterly profit exceeded analyst expectations. The company stated the investment aligns with its Master Plan Part IV, focusing on deploying AI in the physical world, and will complement existing collaborations like the integration of xAI's Grok software in Tesla vehicles.

Last November's shareholder vote presented a complex picture: while more votes were cast in favor of the proposal than against, a significant number of abstentions—treated as opposition under company rules—meant the non-binding measure did not pass. The board reviewed the outcome before proceeding. The stake, part of xAI's $20 billion funding round which included investors like Nvidia, is pending regulatory approval for a first-quarter close.

Tesla's energy storage business provided a bright spot, with revenue surging 27% for the year. The company ended 2025 with over $44 billion in cash, making the xAI investment a small portion of its reserves. The announcement was met with a rise in Tesla's share price in after-hours trading, suggesting investor focus may be shifting from automotive challenges to the company's broader AI ambitions, which include its Optimus humanoid robot and a planned robotaxi.

Source: Webpronews