Tesla Stock Rises After Report Musk’s xAI Is Raising $15 Billion

Tesla is using AI to train robots. Coming into Wednesday trading, Tesla stock was down 1% year to date and up 16% over the past 12 months. (AFP via Getty Images)

Key Points

• Tesla stock closed up 0.7% to $403.99, potentially influenced by xAI’s reported $15 billion fund-raising round.
• xAI, an AI company owned by Elon Musk, is reportedly raising $15 billion, valuing it at approximately $230 billion.
• Tesla shareholders recently voted on an advisory proposal to authorize an investment in xAI, with 1.1 billion votes in favor.

Tesla stock edged higher on Wednesday, possibly boosted by one of CEO Elon Musk’s other companies: xAI.

Shares of the electric-vehicle maker added 0.7% to $403.99, while the S&P 500 and Dow Jones Industrial Average rose 0.4% and 0.1%, respectively.

The move came after The Wall Street Journal reported that Musk’s AI company, xAI, was on the verge of raising $15 billion, valuing the start-up at about $230 billion. xAI was valued at north of $110 billion in March, after it merged with Musk’s social media company X.

Musk, who owns an estimated 50% of xAI, stands to add another $50 billion or $60 billion to his wealth following the deal. The valuations, and Musk’s exact ownership, aren’t known with certainty.

That increase in wealth isn’t bad, considering Tesla shareholders recently voted to award Musk restricted stock options worth roughly $1 trillion if all performance incentives are met.

Results of the shareholder vote were disclosed at the company’s Nov. 6 annual meeting. Investors voted on another proposal this year, brought by shareholders, favoring an investment in xAI. Tesla received 1.1 billion votes in favor of the advisory vote, 916 million against, and 473 million abstentions.

The vote isn’t binding in any way, but it indicates how closely Tesla shareholders are watching xAI. The synergies seem obvious. Both companies are spending billions to create useful AI applications.

Wall Street is watching, too. Wedbush analyst Dan Ives sees Tesla moving toward an “investment and partnership” with xAI.

That hasn’t happened yet. There is another reason Tesla can get bumps from AI-related news. Investors view it as less like a car maker and more like an AI stock these days.

AI-trained self-driving cars and humanoid robots are supposed to fuel the next phase of explosive growth for Tesla. That is why the company is valued at $1.3 trillion and the shares trade for about 180 times estimated 2026 earnings.

Write to Al Root at allen.root@dowjones.com