Current:Home > MyElon Musk demands 25% voting control of Tesla before expanding AI. Here's why investors are spooked. -QuantumProfit Labs
Elon Musk demands 25% voting control of Tesla before expanding AI. Here's why investors are spooked.
View
Date:2025-04-16 03:58:47
Tesla CEO Elon Musk on Monday said he would want to have 25% voting control of the electric vehicle maker before expanding its artificial intelligence and robotics efforts and that without such a stake, he would "prefer to build products outside of Tesla."
Musk's comments have sparked a "firestorm," according to Wedbush Securities analyst Dan Ives, who pointed out that Musk's ownership stake in Tesla stands at about 13%. Boosting the billionaire's ownership to one-quarter of voting control would effectively force Tesla to give him a major payout, restructure its shares or pull another financial lever.
The issue isn't necessarily the overhang of Musk's getting a massive pay package, but the risk that he'll take AI initiatives outside of Tesla, which has been working on a number of related projects, like the Tesla Full Self-Driving chip (FSD) and a humanoid robot. Some investors are drawn to Tesla chiefly for these initiatives, which could eventually lead to the development of humanoid robots that perform routine tasks or fully self-driving cars.
"It's no secret and a key to our bullish thesis that all AI initiatives be kept within Tesla from Dojo to Optimus to FSD to various robotaxi and other robotic developments," Ives wrote in a research note about Musk's comments. "[I]f
Musk ultimately went down the path to create his own company (separate from Tesla) for his next generation AI projects this would clearly be a big negative for the Tesla story."
I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
— Elon Musk (@elonmusk) January 15, 2024
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
Tesla shares slipped 1.8% in premarket trading.
Musk: "I can't be overturned"
Tesla is best known for its electric vehicle manufacturing, but Musk noted in his Monday post on X, the platform formerly known as Twitter, that the company is far more than a car maker.
"You don't seem to understand that Tesla is not one startup, but a dozen," he wrote. "Simply look at the delta between what Tesla does and GM."
Musk added that his motivation for wanting 25% control of Tesla is that he has enough of a stake "to be influential, but not so much that I can't be overturned."
Still, Musk himself has whittled his Tesla stake by selling about 100 million shares in 2022 to raise funds to purchase X. And Tesla's board can't introduce a new pay package while the company faces a lawsuit alleging excessive pay for Musk, which is tied to his 2018 compensation, worth as much as $55 billion, Ives added.
However, Ives predicted that the issue will blow over. "Musk is Tesla and Tesla is Musk and AI is a key to the future of Tesla," he wrote. "We believe this is just more drama in the Tesla story that will not bear fruit."
- In:
- Elon Musk
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
TwitterveryGood! (795)
Related
- Intel's stock did something it hasn't done since 2022
- Albert Ruddy, Oscar-winning producer of ‘The Godfather’ and ‘Million Dollar Baby,’ dies at 94
- Farmers must kill 4.2 million chickens after bird flu hits Iowa egg farm
- Texas power outage map: Over 800,000 outages reported after storms, with more on the way
- Macy's says employee who allegedly hid $150 million in expenses had no major 'impact'
- Former California water official pleads guilty to conspiring to steal water from irrigation canal
- Chicago police fatally shoot stabbing suspect and wound the person he was trying to stab
- Man charged with hate crimes after series of NYC street attacks
- Who are the most valuable sports franchises? Forbes releases new list of top 50 teams
- Mike Tyson said he feels '100%' after receiving medical care for 'ulcer flare-up'
Ranking
- A Mississippi company is sentenced for mislabeling cheap seafood as premium local fish
- Three people shot to death in tiny South Dakota town; former mayor charged
- A driver with an Oregon-based medical care nonprofit is fatally shot in Ethiopia while in a convoy
- General Hospital Actor Johnny Wactor’s Mom Speaks Out After His Death in Fatal Shooting
- Opinion: Gianni Infantino, FIFA sell souls and 2034 World Cup for Saudi Arabia's billions
- How one school district is turning to AI to solve its bus driver shortage
- Reese Witherspoon Cries “Tears of Joy” After “Incredible” Niece Abby’s High School Graduation
- Horoscopes Today, May 28, 2024
Recommendation
'Vanderpump Rules' star DJ James Kennedy arrested on domestic violence charges
What is Manhattanhenge and when can you see it?
Severe storms over holiday weekend leave trail of disaster: See photos
Jimmy Kimmel's son Billy, 7, undergoes third open-heart surgery
Gen. Mark Milley's security detail and security clearance revoked, Pentagon says
Mom speaks out after 3 daughters and their friend were stabbed at Massachusetts theater
What we know about the young missionaries and religious leader killed in Haiti
Melinda French Gates to donate $1B over next 2 years in support of women’s rights