This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Even after being chastised by his board, Elon Musk continues to adhere to his penchant of deferring to online polls for monumental decision-making. While this habit does bestow a patina of populous appeal to important decisions, the superficiality of using online polls as the yardstick for defining corporate strategy is usually frowned upon in corporate governance 101, and rightly so.
Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors?
(Board approval & shareholder vote are needed, so this is just to test the waters)
— Elon Musk (@elonmusk) July 24, 2024
Just moments ago, Elon Musk commissioned a new online poll on X, asking users whether Tesla should invest $5 billion in his AI-focused venture, xAI.
With 23 hours left, the poll has already garnered nearly 70,000 votes, with the vast majority skewed toward a "yes" vote.
Bear in mind that xAI recently raised $6 billion in a new funding round that valued Elon Musk's AI-focused enterprise at $18 billion. While the chatbot Grok is xAI's only product at the moment, the startup intends to significantly expand its AI-related product portfolio by ramping up its investments in GPU clusters.
Meanwhile, as we reported earlier this week, xAI has officially commenced training its Grok 3 Large Language Model (LLM) on "the most powerful AI cluster in the world," featuring around 100,000 liquid-cooled units of NVIDIA's H100 GPUs. For the benefit of those who might not be aware, the Grok 2 LLM is slated for launch next month, with Grok 3 due for launch in December.
Do note that Elon Musk is also eyeing NVIDIA's latest GPUs. Back in June, the CEO of Tesla had announced that xAI's "next big step would probably be ~300k B200s with CX8 networking next summer." As we had noted at the time, this announcement meant that xAI was about to spend a whopping $9 billion on acquiring around 300,000 units of the B200 GPU, with each unit expected to cost around $30,000.
Perhaps today's announcement is a deliberate gambit by Elon Musk to utilize Tesla's cash-rich coffers to subsidize xAI's upcoming binge-purchase of the B200 GPUs. After all, Tesla announced today that it generated a free cash flow of $1.3 billion for the second quarter of 2024, driven by a decrease in inventory. The company also spent around $600 million in AI-related CapEx.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
Follow Wccftech on Google to get more of our news coverage in your feeds.
