Musk Denies Tesla And xAI Collaboration On AI Technology And Revenue Sharing

Tech mogul Elon Musk denied reports that the artificial intelligence startup xAI will support the electric vehicle manufacturer Tesla in using AI models to develop self-driving technology and that the two companies will share revenue.

In a report citing a proposed agreement as described to investors, The Wall Street Journal stated over the weekend that Tesla would use xAI's artificial-intelligence models to power its driver-assistance software, full self-driving technology, or FSD, and voice assistant, and in return share revenue with xAI.

However, Musk, in a post on X, said that the report was not accurate. "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," he posted.

The WSJ report stated that apart from FSD, xAI would support Tesla with additional features such as voice assistant in its electric cars and software to power its humanoid robot Optimus.

However, Musk countered that by saying, "The xAI models are gigantic, containing, in compressed form, most of human knowledge, and couldn't possibly run on the Tesla vehicle inference computer, nor would we want them to."

While the two companies discussed splitting the revenue related to FSD, distribution of revenue from other features would depend on the volume of AI technology utilized by Telsa, the report stated.

After launching xAI last year, Musk suggested about opportunities to integrate xAI's chatbot, Grok, with Tesla's software, and building a new Tesla data center. In July, this year, Musk said he discussed with Tesla board about investing $5 billion in xAI.

The two companies share a close relationship, with xAI hiring several Tesla employees. Last year, Musk redirected thousands of Nvidia AI chips from Tesla to xAI, stating that carmaker had "no use" for them, reported Investor.com.

Tesla shareholders have filed suits in the Delaware Court of Chancery, claiming that reallocation of resources had harmed Tesla investors.

Musk had also threatened to shift AI and robotics work to xAI if his compensation at Tesla was not hiked.

During the xAi launch, the company envisioned training its models using data from Musk's various companies—Tesla, SpaceX, The Boring Company, Neuralink, and X, aiming at enhancing technology across all of these companies, TechCrunch reported.

Musk started xAI to compete against OpenAI, which he co-founded, but quit later.