Elon Musk demands bigger stake in Tesla as price for AI work

“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control,” Elon Musk, Tesla’s chief executive, wrote in a social media post. Photo / Amir Hamja, The New York Times

Elon Musk, the electric car company’s chief executive, said he would “build products outside of Tesla” unless the board raises his stake to 25 per cent.

Elon Musk, the CEO of Tesla, demanded that the company’s board give him shares worth more than US$80 billion if it wants him to continue developing products based on artificial intelligence.

Musk said Monday on X, the social media site formerly known as Twitter that he owns, that he needed to own 25 per cent of Tesla to avoid takeovers and have enough control of the company as it develops robots and other AI technology.

Musk owns 13 per cent of Tesla after selling a substantial portion of his stake to finance his US$44 billion acquisition of Twitter. The social media site has struggled under his leadership and plunged in value. An additional 12 per cent of Tesla would be worth US$82 billion at the current share price, effectively recouping Musk’s investment in Twitter — which he has said he regrets — and then some.

“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25 per cent voting control,” Musk wrote on X. “Enough to be influential, but not so much that I can’t be overturned.”

He went on: “Unless that is the case, I would prefer to build products outside of Tesla.” But he also said the board would take no action until a Delaware judge rules in a lawsuit brought by a Tesla shareholder challenging an earlier compensation plan that was instrumental in making Musk the richest person in the world.

Tesla did not immediately respond to a request for comment.

The demand by Musk underlined the extent to which Tesla, which sold 1.8 million vehicles last year and is the world’s most valuable carmaker, is subject to his impulses.

Tesla’s success forced traditional carmakers to begin offering electric vehicles, which are essential in reducing greenhouse gas emissions from transportation. But Musk’s behaviour and statements have weighed on the share price and gotten him into trouble with regulators.

Tesla shares fell when Musk sold some of his stake to buy Twitter. The shares also suffered after Musk said in 2018 that he had the money to take Tesla private and delist it from the stock exchange. Musk was unable to execute the plan.

The company’s stock has fallen about 14 per cent this year but is up about 60 per cent over the last 12 months.

Musk did not specify which products he might develop outside the company. He has already started a separate AI business called X.AI, which last year released the Grok chatbot to selected users. Tesla is developing a robot called Optimus, which, according to a video posted on X by Tesla on Monday, can fold a shirt. Tesla also uses AI in its driver-assistance and self-driving systems.

On X, some of Musk’s fans applauded his statement, saying he earned the money. But others said it was his own fault his stake in the company has fallen. “They didn’t make you sell your shares,” one user wrote, adding, “why should the board do anything to rectify this for you?”

A stake of less than 15 per cent of the company, Musk said, “makes a takeover by dubious interests too easy.”

This article originally appeared in The New York Times.

Written by: Jack Ewing

Photographs by: Amir Hamja

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