Elon Musk has categorically declined the possibility of combining Tesla with xAI, his artificial intelligence startup. He gave a negative response to investor rumours that were circulating on X.
Musk suggested a day earlier that Tesla shareholders might vote on whether the automaker should invest in xAI, which could strengthen ties between the two businesses without formally merging them. “If Tesla could invest, that would be fantastic,” he said earlier, but emphasised that shareholder approval would be required.
Tesla and xAI have not yet released formal statements addressing the merger rumours or elucidating their future relationship, despite the conjecture, BrandSpur technology and information news desk reports.
Musk’s artificial intelligence startup, xAI, which created the contentious Grok chatbot, has expanded rapidly since acquiring X (formerly Twitter) for $33 billion in March 2025. The combined group was valued at $80 billion at the time of the acquisition, but sources told Reuters that in its most recent funding discussions, xAI had raised valuations as high as $200 billion.
Since Musk has publicly dismissed calls for a new capital raise, saying, “We have plenty of capital,” it is still unclear whether those figures accurately reflect the company’s market potential. But it’s clear that xAI is establishing itself as the AI foundation of Musk’s growing industrial network. Starlink’s customer service operations have already implemented its Grok chatbot, and integration with Tesla’s Optimus robots is soon to follow.
Grok makes it easier to communicate in real time on X, which strengthens the network of businesses owned by Musk. In July 2025, xAI raised $10 billion, of which half came from debt financing and the other half from equity led by Morgan Stanley. Notably, SpaceX, another Musk company, made its first known outside investment in xAI with a $2 billion contribution to this round.
According to Wall Street Journal reports, SpaceX was involved in a $5 billion equity round. xAI is operationally advancing infrastructure objectives. Colossus, its supercomputer located in Memphis, currently uses more than 200,000 GPUs and is expected to grow to one million. With a $18 billion investment in its compute backbone, the company expects to generate $19 billion by 2029 and $1 billion by the end of 2025.
Grok faltered in July when it released offensive and antisemitic content, despite its commercial momentum. This led to a public apology and a promised codebase review. Musk maintains his support for the chatbot, referring to it as “the smartest AI in the world” and promising further integration throughout his businesses.
However, combining the publicly traded Tesla with the privately held xAI could lead to regulatory issues from a governance perspective. It seems that Musk is favouring operational integration over corporate consolidation in his current approach. Grok’s integration into Optimus robots, Tesla automobiles, and Starlink services may provide the advantages of collaboration without the complicated legal issues associated with a merger.
According to Musk, Tesla will not merge with xAI at this time. However, history demonstrates that in Musk’s empire, “no” now does not necessarily equate to “never.”
