Tesla CEO Elon Musk said Monday that he would like to have 25% of the electric vehicle maker’s votes before expanding its artificial intelligence and robotics efforts and that without such participation he would “prefer build products outside of Tesla.”
Musk’s comments ignited a “firestorm,” according to Dan Ives, an analyst at Wedbush Securities, who noted that Musk’s stake in Tesla stands at about 13%. Increasing the billionaire’s ownership to a quarter of the voting rights would effectively force Tesla to make a large payment to him, restructure his shares or use other financial leverage.
The problem isn’t necessarily Musk getting a massive payday, but the risk of him taking AI initiatives outside of Tesla, which has worked on a number of projects. Related projects, such as the Tesla Full Self-Driving (FSD) chip and a humanoid robot. Some investors are attracted to Tesla primarily for these initiatives, which could eventually lead to the development of humanoid robots performing routine tasks or fully autonomous cars.
“This is no secret and is key to our bullish thesis that all AI initiatives should be kept within Tesla, from Dojo to Optimus to FSD to various robotaxi and others robotic developments,” Ives wrote in a research note on Musk’s comments. “(If
Musk ultimately chose to start his own company (separate from Tesla) for his next-generation AI projects, which would clearly be a big negative for Tesla’s story. »
Tesla shares fell 1.8% in premarket trading.
Musk: “I can’t be knocked down”
Tesla is best known for its manufacturing of electric vehicles, but Musk noted in his Monday post on X, the platform formerly known as Twitter, that the company is much more than an automaker.
“You don’t seem to understand that Tesla is not one startup, but a dozen,” he wrote. “Just look at the gap between what Tesla and GM are doing.”
Musk added that his motivation for wanting to control 25% of Tesla is that he has enough ownership “to be influential, but not so influential that he can’t be brought down.”
Yet Musk himself reduced his stake in Tesla by selling about 100 million shares in 2022 in order to raise funds to buy X. And Tesla’s board cannot introduce a new salary package while l company faces a lawsuit alleging excessive salary for Muskwhich is tied to his 2018 compensation, worth $55 billion, Ives added.
However, Ives predicted the problem would go away. “Musk is Tesla and Tesla is Musk and AI is the key to Tesla’s future,” he wrote. “We believe this is just another drama in Tesla’s history that will not bear fruit.”
