Janice R. Andrews
Unexpectedly, Tesla’s mysterious CEO, Elon Musk, has thrown down the gauntlet and challenged the board to give him 25% of the voting bloc. The billionaire businessman has stated that he may stop the development of artificial intelligence (AI) within the massive electric vehicle (EV) company if he doesn’t have this kind of impact.
The investing world has been rocked by Musk’s unexpected ultimatum, which was posted on X and has caused a stir among stakeholders. The outspoken CEO stated that he was uncomfortable with Tesla’s AI and robots capabilities being advanced without having a significant voting power, stressing that although he would have influence, his decisions might still be overturned.
Tesla’s dual identities as a vehicle company and a tech enterprise amplifies the significance of Musk’s audacious decision. Tesla is widely acknowledged as a disruptive force in the automobile business. Elon Musk has positioned Tesla as a technology pioneer, frequently praising the company’s artificial intelligence capabilities as the “best real-world AI.”
The scenario in the market was dubbed a “firestorm” by Wedbush Securities managing director Dan Ives due to the overwhelming reaction from investors to Musk’s ultimatum. Ives cautioned that, given Tesla’s standing as a disruptive tech leader, the possible consequences of shifting AI development away from the firm could be catastrophic for its future expansion.
“The Street views Tesla correctly (in our view) as a disruptive tech leader, and if 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,” Ives said in an earlier article.
Musk is already working on AI projects outside of Tesla through his new company, xAI, despite the risks. This business, which focuses on mitigating “woke” AI, has introduced a solution called “Grok” to rival industry titans like OpenAI’s ChatGPT and Google’s Bard. Experts surmise that Musk’s activities beyond Tesla could be an effort to gain a larger position in the quickly changing field of artificial intelligence.
Musk’s demands for more voting power may have their origins in his worries about the existential threats posed by sophisticated artificial intelligence. He had long compared artificial intelligence’s risks to those of nuclear weapons. Nonetheless, Musk faces serious repercussions for this ultimatum since the success of Tesla is largely dependent on his astounding $206 billion fortune. It also jeopardizes the company’s future.
According to company documents, Musk’s ownership position in Tesla is currently 13%, but if a Delaware court approves his 2018 remuneration proposal, that ownership percentage could rise to 20.6%. Musk claims that in order to complicate matters in the event that the plan is rejected, the board has postponed revising his compensation package until the court makes a decision.
Ives says he’s optimistic about a resolution despite the uncertainty, saying, “Musk is Tesla and Tesla is Musk.” He highlights the entwined fate of the CEO and the company he has come to represent by predicting that the Board and Musk will likely address the matter over the next three to six months.
