The next chapter for Tesla: Absorb xAI?

In the world of technology and capital, some rumors start as whispers in enthusiast forums, then evolve into baseless speculations in financial media, and ultimately, they make their way onto the most serious agendas in a way that cannot be ignored.

The merger of Tesla and xAI, another AI startup under Elon Musk's umbrella, is precisely such a prophecy that is gradually becoming a reality.

Last Sunday, a tweet from Anthony Scaramucci, the founder of SkyBridge Capital, added fuel to the already intense anticipation. He bluntly stated, "As Musk accelerates the integration of AI into his business landscape, the merger of Tesla and xAI 'feels inevitable.'"

This is not an isolated call. When a shareholder proposal urging Tesla to invest in xAI was formally submitted, and when Morgan Stanley discovered a hidden "merger clause" in Musk's new compensation package, which could be worth up to trillions of dollars, everyone realized: An AI giant spanning the digital and physical worlds, with a potential valuation of up to $8.5 trillion, is emerging.

Behind this, is it a wild fantasy of capital or Musk's strategic layout? Today, Silicon Rabbit will delve into the possibility of this century - long merger and the AI future it points to based on exchanges with our expert team.

01

Merging a rising star worth tens of billions of dollars (xAI) into a trillion - dollar giant (Tesla) is no impulsive decision. We can clearly see how this path has been paved step by step through four key signals.

1. A Proposal: From Public Demand to Formal Agenda

It all started with a Tesla retail shareholder named Stephen Hawk. His formal proposal suggests that the company invest in xAI, and it will be voted on at the company's annual general meeting on November 6.

Although this seemingly insignificant step, its symbolic meaning is extremely significant. It marks that the matter of "the capital alliance between Tesla and xAI" has entered the formal corporate governance agenda for the first time from public discussions.

As Hawk himself said, his inspiration came from Musk's hints on social media. He believes that "formally establishing this partnership is crucial to ensure clear common interests for both parties." This represents the voice of the most loyal investors: When we invest in Tesla, we are investing in Musk's AI vision, and we don't want to miss out on the huge success of xAI.

2. Trillion - Dollar Compensation: The "Merger Clause" Hidden in the Fine Print

If the shareholder proposal is a "bottom - up" push, then Musk's new ten - year compensation package is a "top - down" strategic design. This package is regarded by top investment banks like Morgan Stanley as the "key" to unlocking the mystery of the merger.

Adam Jonas, an analyst at Morgan Stanley, keenly pointed out that an additional clause about acquisitions in the plan is the key to solving the puzzle:

"The market capitalization and adjusted EBITDA milestone targets may be adjusted to account for Tesla's acquisition activities that are considered to have a significant impact on the achievement of the milestones."

Translated from this convoluted text, it means that if Tesla makes a "significant" acquisition (such as xAI) in the future, Musk's performance evaluation targets can be adjusted accordingly.

Wall Street's interpretation is straightforward: This is the most flexible institutional interface reserved for the future merger with xAI. It shows that this potential merger has long been in Tesla's long - term strategic toolkit, just waiting for the right time.

3. Musk's 25% Control

Musk himself has also been quite open about the merger. He not only publicly solicited opinions from his fans on the X platform but also told investors bluntly that he "will act according to the wishes of the shareholders."

Behind this is his in - depth consideration of Tesla's control. Musk has repeatedly stated clearly that he hopes to hold at least 25% of Tesla's equity to have a veto power in case of a change in corporate control. However, simply increasing his holdings in the secondary market would be extremely costly.

Merging with xAI can perfectly solve this problem. Musk holds a large number of shares in xAI. If xAI is acquired by Tesla, his xAI shares will be correspondingly exchanged for new Tesla shares. This can not only significantly increase his shareholding ratio but also address investors' concerns about his scattered energy, firmly locking all core businesses within the Tesla platform, killing two birds with one stone.

4. Wall Street's Excitement

The capital market's pursuit of stories is insatiable. When Gene Munster, a well - known analyst at Deepwater Asset Management, shouted that "the combination of Tesla and xAI could help the former reach a market capitalization of $8.5 trillion," the entire Wall Street was ignited.

Behind this view is a fundamental re - evaluation of Tesla's business model - it will no longer be simply regarded as an electric vehicle or energy company, but a true end - to - end, software - hardware integrated artificial intelligence platform company. And such a company should enjoy a much higher "AI valuation premium" than manufacturing companies.

02

The market's enthusiasm must be based on solid business logic. The merger of Tesla and xAI is considered a "match made in heaven" because they occupy two poles of the AI world and are the missing pieces for each other.

1. The Last Piece of the Puzzle in the Business Landscape

Musk has emphasized more than once that Tesla is a "real - world artificial intelligence company." Its core task is to enable AI to understand and interact with the physical world. Specifically:

Full Self - Driving (FSD): Teaching cars to understand, interpret, and make decisions in complex physical traffic environments.

Humanoid Robot (Optimus): Robots performing tasks in unstructured physical spaces such as factories and homes.

On the other hand, xAI focuses on "digital - world artificial intelligence." Its core product, the Grok large - language model, is dedicated to understanding and generating human language, code, and logic.

For a hardware carrier like Optimus, the ability to perceive and execute in the physical world is its "body," while the cognitive and reasoning ability of the language model is its "soul."

Only when the two are deeply integrated can it understand complex instructions and break them down into actions. The merger of Tesla and xAI is precisely to create such a general artificial intelligence entity with a unified body and soul.

2. The Ultimate Closed - Loop from "Seeing" to "Understanding"

The competition in AI ultimately boils down to the competition for data. Tesla has the world's largest and still exponentially growing real - world driving video data, which is the most valuable resource for training AI in the physical world.

However, in the past, this data was mainly used for "perception" tasks, such as identifying vehicles, pedestrians, and lane lines. After the merger with xAI, Grok's powerful multi - modal capabilities can conduct deeper "annotation" and "understanding" of this massive amount of video data, forming an unparalleled data flywheel:

Tesla's fleet collects a large amount of video data -> The Grok model conducts in - depth understanding and logical annotation of the videos in the cloud -> More intelligent FSD and Optimus models are trained -> These models are deployed on the fleet and robots, performing better, which encourages more users to use them and generate higher - quality data -> The cycle repeats, evolving exponentially.

Once this flywheel starts spinning, its high barriers will make it unattainable for any competitor.

3. Deep Coupling of Software and Hardware

The end - game of the large - model competition must be a vertical integration competition of software and hardware. You not only need the best algorithms but also the most efficient chips and data center architectures customized for your algorithms.

Tesla has its self - developed Dojo chips, and xAI has the Grok model. After the merger, they can achieve ultimate optimization from the bottom - layer chip design, to data center construction, and then to upper - layer model training, converting every watt of energy into effective computing power.

In fact, the synergy between the two companies has already been quietly happening: Grok has been integrated into some Tesla vehicles and Optimus prototypes; and the stable power supply of xAI's computing center is guaranteed by Tesla Energy's Megapack industrial energy - storage batteries.

03

When all the logic points to a merger, the remaining questions are: When and how.

For Tesla's shareholders, this is an urgent problem to be solved. Watching xAI's valuation soar from billions to seeking new financing of $200 billion, while they, as Tesla investors, cannot directly share the biggest dividend of this AI revolution, is undoubtedly a kind of torture.

The merger of Tesla and xAI is no simple capital game of "shifting assets from one hand to the other." It is an inevitable step for Musk to build an unprecedented vertically integrated AI empire that ranges from underlying energy, to customized chips, to super - computing power, to top - notch algorithms, and finally lands on two physical carriers: cars and robots.

The annual general meeting on November 6 will be a crucial node in this drama. Regardless of the voting result, what we are witnessing may be more than just a corporate restructuring but the beginning of a new AI era.

Conclusion

When your team is arguing endlessly about the technical route, when your investment decisions are pending, when your product strategy is in the fog... Please remember that the confusion you are facing may have already been overcome by some experts. We at Silicon Rabbit believe that Real first - hand experience always comes from those who are driving industry change.

Silicon Rabbit has more than 30,000 executives from top Silicon Valley companies, core technology experts, well - known university professors, and entrepreneurs. They not only have profound industry experience but are also deeply involved in industrial transformation, possessing vivid and reliable first - hand insights.

This article is from the WeChat official account “Silicon Rabbit” (ID: gh_1faae33d0655), author: Silicon Rabbit, published by 36Kr with authorization.