Current:Home > reviewsElon Musk demands 25% voting control of Tesla before expanding AI. Here's why investors are spooked. -MarketStream
Elon Musk demands 25% voting control of Tesla before expanding AI. Here's why investors are spooked.
View
Date:2025-04-26 12:28:21
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! (78636)
Related
- Most popular books of the week: See what topped USA TODAY's bestselling books list
- This MacArthur 'genius' knew the initial theory of COVID transmission was flawed
- Ozone hole over Antarctica grows to one of the largest on record, scientists say
- Iowa starting quarterback Cade McNamara out for rest of 2023 season with ACL injury
- A New York Appellate Court Rejects a Broad Application of the State’s Green Amendment
- Kevin McCarthy won't run for speaker again
- Deputy dies after being shot while responding to Knoxville domestic disturbance call
- Florida boy, 11, charged with attempted murder in shooting of 2 children after Pop Warner football practice
- Elon Musk's skyrocketing net worth: He's the first person with over $400 billion
- Big Three automakers idle thousands of workers as UAW strike rages on
Ranking
- Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
- Robot takeover? Agility Robotics to open first-ever factory to mass produce humanoid robots
- What to know about Elijah McClain’s death and the criminal trial of two officers
- Additional U.S. aid for Ukraine left in limbo as Congress dodges a government shutdown
- Tom Holland's New Venture Revealed
- Suspect in police beating has ruptured kidney, headaches; his attorneys call for a federal probe
- The Hollywood writers strike is over. What's next for the writers?
- Cruise defends safety record after woman pinned under self-driving taxi in San Francisco
Recommendation
Behind on your annual reading goal? Books under 200 pages to read before 2024 ends
San Francisco will say goodbye to Dianne Feinstein as her body lies in state at City Hall
Zimbabwe’s opposition boycotts president’s 1st State of the Nation speech since disputed election
'A real tight-knit group:' Military unit mourns after 2 soldiers killed in Alaska vehicle crash
Most popular books of the week: See what topped USA TODAY's bestselling books list
Abercrombie & Fitch ex-CEO Mike Jeffries accused of exploiting men for sex through organized operation
Slovakia reintroduces checks on the border with Hungary to curb migration
Zimbabwe’s opposition boycotts president’s 1st State of the Nation speech since disputed election