Elon Musk has denied a report that discusses the potential for a revenue-sharing agreement between xAI and electric vehicle (EV) maker Tesla (TSLA). On Saturday, the Wall Street Journal reported that investors were informed about a proposed arrangement between the two Musk companies. The report states that xAI could earn revenue from Tesla by allowing the automaker access to its artificial intelligence (AI) technology and resources.
Claims about the Revenue-Sharing Agreement
The Wall Street Journal reported that under the proposed arrangement, Tesla would license the startup’s AI models to power its Full Self Driving (FSD) software. Additionally, xAI would help Tesla to develop more features, such as voice-assistant software for its EVs. In return, xAI would earn revenue from Tesla based on the latter’s dependence and usage of its technology. Interestingly, xAI executives are believed to have asked for an even revenue split for aiding Tesla’s FSD feature.
Musk Opposes Revenue-Sharing Claims
Following the report, Musk took to his social media platform X to deny any revenue-sharing agreement between xAI and Tesla. Musk said that the report was “not accurate” and noted that there is no need for Tesla to license anything from xAI.
Musk has been accused of shifting resources between Tesla and xAI. The EV company already faces several impending lawsuits that allege that Tesla’s resource sharing with xAI is hurting its business and investors.
At the same time, Musk’s X is also said to be sharing resources with xAI. The latter’s AI chatbot Grok is also integrated into X. In July, Musk even said that he would discuss the possibility of investing $5 billion in xAI with Tesla’s board.
Is Tesla a Buy or Sell Stock?
Amid Tesla’s declining stock price, weak financial performance, and slowing demand for EVs, analysts prefer to remain on the sidelines on Tesla stock. On TipRanks, TSLA stock has a Hold consensus rating based on ten Buys, 14 Holds, and seven Sell recommendations. The average Tesla price target of $211.46 implies that shares are almost fully valued at current levels. Year-to-date, TSLA shares have fallen 15.2%.
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