's private startup , xAI, has reportedly briefed investors on its plans to develop the AI that will power Tesla's Optimus robot.
This development comes from a Bloomberg, which says that xAI executives said their goal is to “develop self-sufficient AI to power robots like Tesla’s Optimus.”
Tesla used to be a robotics company – Why is xAI involved?
In recent years, Musk has been pushing the idea that Tesla is not just a car manufacturer but a leading AI and robotics. Tesla's high stock valuation is largely based on this promise, particularly regarding the future value of Full Self-Driving (FSD) and the humanoid robot Optimus.
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Elon Musk has claimed that Optimus will be "the greatest product ever created by mankind," implying that its value will be eclipsed by Tesla.
However, it appears that Optimus’ “brain,” the core software that provides its value, may not be a Tesla asset. Instead, it appears that it will be developed by xAI, a private company in which Musk has significantly more control than Tesla. If Tesla is simply building the hardware and xAI is providing the intelligence, that positions Tesla as a contract robot manufacturer for Musk’s private business or as a major customer licensing intellectual property .
This report could be detrimental to Musk's defense in the ongoing lawsuits accusing him of breaching his fiduciary duties at Tesla.
Previously, it was reported that Musk threatened to develop AI products outside of Tesla unless he was granted 25% voting control, a demand that many shareholders believed was met when his substantial compensation package . However, despite achieving what he wanted, he appears to be moving the value of AI outside of Tesla.
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This follows a pattern seen in recent years. Musk claimed that xAI was necessary because it was focused on “ AGI ” while Tesla was focused on “ real-world AI .” He stated that Tesla, with the “real-world AI” developed through its autonomous driving efforts , would be responsible for building the brain of the Optimus robot.
This new report challenges that distinction. If xAI is indeed developing the brain for Optimus, it would directly take on Tesla’s primary mission of “real-world AI.”.
Also, according to the statement, xAI will develop “AI to power robots like Tesla’s Optimus,” which implies other humanoid robots as well. This in turn means it becomes a direct competitor to Tesla.
That's why some Tesla shareholders have sued Musk and Tesla's board for breach of fiduciary duty after xAI was founded. They argue that Musk had no right to start this endeavor outside of Tesla and are demanding that Musk's stake in xAI be vested in Tesla.
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The conflict of interest is significant. Musk is essentially managing a situation where shareholder capital is at stake. He raised capital for Tesla based on the promise of AI dominance, used Tesla’s resources and reputation to build the necessary infrastructure, and now appears to be transferring valuable intellectual property, AI itself, to a private company he controls.
