Elon Musk’s xAI could help Tesla with FSD and Optimus

A proposal that was presented to investors calls for Tesla to license xAI’s AI models to help power Full Self-Driving (FSD), which is the company’s driver assistance software, as well as a Siri-like voice assistant and its robot humanoid Optimus. , according to the report.

The amount of revenue Tesla shares with xAI would depend on how much the startup’s technology is used, though xAI has discussed an equal split for FSD, the report added.

xAI representatives also told investors that it is a future supplier of critical technologies for Tesla’s software products, sources told WSJ.

Tesla and xAI did not immediately respond to requests for comment.

Talks about a Tesla revenue-sharing deal come as xAI is flush with capital and ramping up its own projects.

In May, xAI raised $6 billion from Andreessen Horowitz, Sequoia Capital and Saudi Prince Alwaleed Bin Talal, among others. And last weekend, xAI brought online a new supercomputer called Colossus, which is designed to train its large language model known as Grok, a rival to OpenAI’s GPT-4.

While Grok is only available to paying subscribers to Musk’s X social media platform, many Tesla experts believe it will eventually form the artificial intelligence that will power Optimus.

Musk himself raised the prospect of closer ties between xAI and Tesla, saying in July that he would discuss a potential $5 billion investment in his AI startup with the automaker’s board. And on an earnings call that month, he told analysts that xAI was already “helpful in advancing Full Self-Driving and building the new Tesla data center.”

But Musk’s practice of bringing his various companies closer has been controversial with some investors and lawmakers. In June, he admitted to hijacking Nvidia chips designed to train Tesla’s X and xAI neural networks.

“Tesla didn’t have anywhere to send the Nvidia chips to run them, so it would just sit in a warehouse.” posted on X.

Meanwhile, Musk increasingly sees autonomy as key to Tesla’s future and has said the company will spend $10 billion this year on AI. The company will also unveil its highly anticipated robotaxi at an event in October.

Tesla bulls like Ark Investment’s Cathie Wood see robotaxis as a foundation for the company’s valuation and growth potential. In July, she predicted that an autonomous taxi platform would be the catalyst for a 10-fold increase in Tesla’s stock price.

“Self-driving taxi platforms are the biggest AI project evolving today,” she told Bloomberg TV.

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