Tesla shareholders are set to vote on whether the company should invest in Elon Musk’s AI startup xAI, a proposal framed as a strategic move to bolster Tesla’s ambitions in artificial intelligence, robotics, and energy. The vote is part of a broader set of shareholder actions, including a company-backed proposal to increase Musk’s 10-year compensation package to $1 trillion. The investment proposal was submitted by Stephen Hawk, a Florida-based shareholder with a $2,000 stake in Tesla. In his supporting statement, Hawk highlighted the growing synergy between Tesla and xAI, citing the integration of xAI’s Grok AI into Tesla vehicles as evidence of tangible collaboration. He argued that a strategic investment in xAI would provide Tesla with access to cutting-edge AI capabilities, accelerate innovation in areas like Full Self-Driving and the Optimus humanoid robot, and ultimately enhance long-term shareholder value. Tesla’s board has taken a neutral stance on the proposal, a departure from its usual practice of recommending against shareholder initiatives. This neutrality underscores the significance and complexity of the issue, particularly given Musk’s dual roles as CEO of Tesla and founder of xAI. The potential investment would mark the second time one of Musk’s companies has backed xAI. SpaceX, Musk’s aerospace venture, has committed $2 billion to xAI as part of a larger $5 billion equity raise. Analysts have speculated that SpaceX’s involvement may reflect challenges xAI has faced in securing external funding. Musk also merged X, the social media platform formerly known as Twitter, with xAI earlier this year, further consolidating his AI ecosystem. Despite the strategic rationale, some Tesla shareholders have raised concerns. Critics argue that xAI could be a competitor to Tesla, given Musk’s repeated characterization of the automaker as an AI company. Last year, a group of shareholders sued Musk and Tesla over the creation of a rival AI firm, but the case was dismissed by a Delaware court. The proposal comes amid ongoing challenges for Tesla, including declining EV sales and delays in the rollout of its robotaxi program. The company has increasingly focused investor attention on its AI initiatives, positioning them as the key to future growth. Musk has publicly stated that he needs greater control over Tesla to effectively lead its AI transformation, rather than being divided between multiple ventures. The proposed $1 trillion pay package for Musk is tied to aggressive performance goals, including increasing Tesla’s market capitalization from around $1 trillion to over $8 trillion within a decade—a target many analysts consider highly ambitious. Gene Munster, managing partner at Deepwater Asset Management, noted that reaching such a valuation would require transformative breakthroughs, such as widespread deployment of humanoid robots. He believes xAI could play a crucial role in enabling that vision, not just through technological advancement but also by boosting investor confidence and Tesla’s overall valuation. The shareholder vote is scheduled for November 6 at 3 p.m. Central Time at Tesla’s Gigafactory Texas and will be streamed live online.