Elon Musk has refuted a report by the Wall Street Journal that claimed his artificial intelligence startup xAI has held discussions regarding a potential revenue-sharing agreement with Tesla. The proposed arrangement, as described to investors, would have involved Tesla licensing xAI’s AI models to enhance its full self-driving (FSD) capabilities, with a portion of the generated revenue being shared with the AI company.
In a post on his social media platform X, Musk stated that while Tesla has learned a lot from discussions with xAI engineers, which have helped accelerate the development of unsupervised FSD, there is no need for the automaker to license anything from xAI. He dismissed the WSJ report as “not accurate.”
The Journal’s report, citing unnamed sources familiar with the matter, also suggested that xAI would support Tesla in developing other features, such as a voice assistant for its electric vehicles and software for the Optimus humanoid robot.
The terms of the potential revenue-sharing deal were said to depend on the extent to which Tesla relied on xAI’s technology compared to its own systems, with xAI executives reportedly considering an even split of FSD revenue.
Musk launched xAI last year to compete with Microsoft-backed OpenAI, which raised concerns about the possibility of diverting resources from Tesla to the AI company. In July, Musk mentioned that he and Tesla’s board would discuss a $5 billion investment in xAI.
However, in his rebuttal, Musk emphasized the significant differences between the AI models developed by xAI and Tesla. He explained that xAI’s models are massive in size and contain compressed human knowledge, making them unsuitable to run on Tesla’s vehicle inference computers.
In contrast, Tesla’s AI models are highly optimized for real-world driving, compressing video into driving commands while operating on a 300W computer with limited memory and bandwidth compared to powerful GPUs.
Musk’s denial of the WSJ report suggests that there are no immediate plans for a revenue-sharing arrangement between Tesla and xAI, despite the close ties between the two entities. Tesla appears to be focusing on developing its own specialized AI models tailored for autonomous driving, while benefiting from the knowledge gained through discussions with xAI engineers.
