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Tesla shareholders have voted against a proposal for the board to authorize an investment in Elon Musk's artificial intelligence (AI) start-up, xAI. Despite the non-binding measure receiving over 1.06 billion votes in favor, it was defeated due to nearly half a billion abstentions being counted as no votes under Tesla's rules. The decision comes as a setback for Musk, who had publicly supported the idea of a $5 billion investment last year. Tesla's board has said it will take the strong support for the proposal into account when deciding on future actions. This comes after General Counsel Brandon Ehrhart said at Tesla's annual shareholder meeting that they would consider their next steps based on how much support there was from shareholders. The outcome of the vote could also be seen as a strategic consideration by Tesla, given its existing partnerships and technological focus. Despite the vote, xAI and Tesla already have a business partnership. The AI start-up bought nearly $200 million worth of Megapack batteries from Tesla. Plus, Grok, an AI chatbot developed by xAI, has been integrated into Tesla cars. This shows that while the proposed investment didn't go through, there are still strong ties between these two companies in terms of technology and resources. Tesla's board chair Robyn Denholm was cautious about the potential investment in an interview with Bloomberg News last week. She said they hadn't invested in xAI yet because it was developing different technology than what Tesla is pursuing for real-world AI applications. Despite the board's caution, Tesla acknowledged that Musk's work in AI could lead to advancements in autonomous decision-making and real-world adaptability. These developments could potentially benefit Tesla's vehicles and robotics offerings. The company's official statement also said that some of Musk's projects may not fit squarely within its mission, which is why they are being careful about where to invest their resources.
