Tesla announces massive investment into xAI

Tesla has announced a major development in its ventures outside of electric vehicles, as it confirmed today that it invested $2 billion into xAI on January 16.

The move is significant, as it marks the acquisition of shares of Series E Preferred Stock, executed on market terms alongside other investors. The company officially announced it in its Q4 2025 Shareholder Deck, which was released at market close on Wednesday.

The investment follows shareholder approval in 2025 for potential equity stakes in xAI and echoes SpaceX’s earlier $2 billion contribution to xAI’s $10 billion fundraising round.

Tesla said that, earlier this month, it entered an agreement to invest $2 billion to acquire shares of Series E Preferred Stock of xAI:

“Tesla’s investment was made on market terms consistent with those previously agreed to by other investors in the financing round. As set forth… pic.twitter.com/HgtrcHdB2U

— TESLARATI (@Teslarati) January 28, 2026

CEO Elon Musk, who is behind both companies, is now weaving what appears to be an even tighter ecosystem among his ventures, blending Tesla’s hardware prowess with xAI’s cutting-edge AI models, like Grok.

Tesla confirmed the investment in a statement in its Shareholder Deck:

“On January 16, 2026, Tesla entered into an agreement to invest approximately $2 billion to acquire shares of Series E Preferred Stock of xAI as part of their recent publicly-disclosed financing round. Tesla’s investment was made on market terms consistent with those previously agreed to by other investors in the financing round. As set forth in Master Plan Part IV, Tesla is building products and services that bring AI into the physical world. Meanwhile, xAI is developing leading digital AI products and services, such as its large language model (Grok).”

It continued:

“In that context, and as part of Tesla’s broader strategy under Master Plan Part IV, Tesla and xAI also entered into a framework agreement in connection with the investment. Among other things, the framework agreement builds upon the existing relationship between Tesla and xAI by providing a framework for evaluating potential AI collaborations between the companies. Together, the investment and the related framework agreement are intended to enhance Tesla’s ability to develop and deploy AI products and services into the physical world at scale. This investment is subject to customary regulatory conditions with the expectation to close in Q1’2026.”

The history of the partnership traces back to xAI’s founding in July 2023, as Musk launched the company as a counterweight to dominant AI players like OpenAI and Google.

xAI aimed to “understand the true nature of the universe” through unbiased, truth-seeking AI. Tesla, meanwhile, has long invested in AI for its Full Self-Driving (FSD) software and Optimus robots, training models on vast datasets from its vehicle fleet.

The investment holds profound significance for both companies.

For Tesla, it accelerates its Master Plan Part IV, which envisions AI-driven autonomy in vehicles and humanoid robots. xAI’s Grok could enhance Tesla’s real-world AI applications, from optimizing battery management to predictive maintenance, potentially giving Tesla an edge over its biggest rivals, like Waymo.

Investors, on the other hand, stand to gain from this symbiosis. Tesla Shareholders may see boosted stock value through AI innovations, with analysts projecting enhanced margins and significant future growth in robotics. xAI’s valuation could soar, attracting more capital.

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