Friday, May 24

Musk is demanding a larger stake in Tesla as the price for AI work

Elon Musk, Tesla’s CEO, has asked the company’s board of directors to award him shares worth more than $80 billion if he wants to continue developing products based on artificial intelligence.

Musk said on Monday on X, the social media site he owns, that he needed to own 25% of Tesla to avoid takeovers and have sufficient control of the company as it develops robots and other artificial intelligence technologies.

The CEO owns 13% of Tesla after selling a substantial portion of his stake to finance the $44 billion acquisition of Twitter, which he renamed X. The social media site has struggled under his leadership and has lost value. An additional 12% of Tesla would be worth $82 billion at the current share price, effectively recouping Musk’s investment in Twitter – which he has said he regrets – and more.

“I feel uncomfortable growing Tesla into a leader in AI and robotics without having about 25% control over the votes,” Musk wrote on X. “Enough to be influential, but not so much that cannot be overthrown.”

He continued: “Unless that’s the case, I’d rather build products outside of Tesla.” But he also said the board would not take any action until a Delaware judge rules in a lawsuit brought by a Tesla shareholder challenging a previous compensation plan that was instrumental in making Musk the world’s richest person.

Tesla did not immediately respond to a request for comment.

Musk’s request underlined how susceptible Tesla, which sold 1.8 million vehicles last year and is the world’s most valuable automaker, is subject to his impulses.

Tesla’s success has forced traditional automakers to start offering electric vehicles, which are essential for reducing greenhouse gas emissions from transportation. But Musk’s behavior and statements have weighed on the stock price and landed him in trouble with regulators.

Tesla shares plummeted when Musk sold part of his stake to buy Twitter. Shares also suffered after Musk said in 2018 that he had the money to take Tesla private and delist it. Mr Musk was unable to execute the plan.

The company’s shares are down about 14% this year, but are up about 60% over the past 12 months.

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

On X, some of Mr. Musk’s fans applauded his statement, saying he earned the money. But others said it was his fault that his stake in the company fell. “They didn’t force you to sell your shares,” one user wrote, adding, “why would the board do anything to remedy this problem?”

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