Tesla Revenue-Sharing Deal with xAI Denied by Elon Musk Amid Licensing Talks

Elon Musk has denied recent reports claiming that Tesla is in talks with his AI startup, xAI, about sharing future revenue.

The Wall Street Journal reported on Saturday (September 7) that Tesla was considering a deal to use xAI's artificial intelligence models to improve its driver-assistance technology, known as Full Self-Driving (FSD), and to develop other features for its vehicles and robots.

Elon Musk Denies Revenue Sharing Deal Between Tesla and xAI

According to the report, the proposed agreement would involve Tesla licensing xAI's AI technology to enhance its FSD system. In return, Tesla would share some of the revenue generated from this technology with xAI.

The report also suggested that xAI would help develop additional features for Tesla, including a voice assistant for Tesla cars and software for the company's humanoid robot, Optimus.

Elon Musk took to social media to refute these claims. On his platform X (formerly Twitter), Musk said he had not read the Wall Street Journal article but described a summary of the report as "not accurate."

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Musk explained that while Tesla has benefited from discussions with xAI engineers, there is no need for Tesla to license xAI's technology. Musk noted that xAI's models are too large to function on Tesla's vehicle systems and that Tesla has no plans to use them.

Musk launched xAI last year to compete with OpenAI, a company he co-founded but later left. Reports earlier this year suggested that xAI planned to use data from Musk's various ventures, including Tesla, SpaceX, The Boring Company, Neuralink, and X, to train its AI models. This would potentially enhance technology across these companies.

In addition to the revenue-sharing discussions, Tesla shareholders have filed a lawsuit against Musk, alleging that his focus on xAI has diverted resources and talent away from Tesla, creating a competing enterprise.

The Wall Street Journal's report highlighted that any revenue-sharing agreement between xAI and Tesla would depend on how much Tesla relies on xAI's technology compared to its own. The specifics of the revenue split were also under discussion among xAI executives.