Tesla CEO Elon Musk shared the requirements he would need to boost the electric vehicle maker's artificial intelligence (AI) and robotics efforts further.
Musk aims for increased voting control at Tesla before expanding the company's AI efforts. If 25% voting control is impossible, Musk would create products outside of Tesla instead.
Aiming for a 25% Voting Power
"I am uncomfortable growing Tesla to be a leader in AI & robotics without having 25% voting control," Musk said Monday on X.
According to Musk, possessing around 25% of the voting power would give him influence, but his decisions could be overridden if twice as many shareholders vote against him. At 15% or less voting power, the for/against ratio to override him would make a takeover too easy. Musk added that if 25% voting control is impossible, he would prefer to build products outside Tesla.
AI, Robotics in Tesla
Musk integrated an AI chatbot named "Grok" into X in November, which originated from xAI, an artificial intelligence company established over the summer to "advance collective understanding of the universe." Experts and analysts suggest that Musk's warning regarding developing AI and robotics outside Tesla could infringe on his responsibilities as CEO unless he obtains more voting control.
While Elon Musk has extensively promoted Tesla's partially automated "Full Self-Driving" software and prototype humanoid robots, the electric vehicle maker's primary source of revenue comes from its automotive business.
He also promoted Tesla's Dojo supercomputer for training AI models, which could increase Tesla's market value by nearly $600 billion, facilitating a quicker entry into robotaxis and software services, according to analyst Adam Jonas from Morgan Stanley in September.
Tesla's shares rose by 0.5% on Tuesday but have declined over 11% since the beginning of the month. Elon Musk, the world's wealthiest person, currently holds approximately 13% of Tesla stock after selling billions of dollars in shares in 2022 to fund his $44 billion acquisition of Twitter.
Dual-Class Share Structure
In a separate post on X, Musk mentioned that he would be okay with a dual-class share structure to obtain 25% voting control. However, he was informed that it was not feasible after Tesla's initial public offering (IPO).
Elon Musk expressed surprise that a multi-class share structure, similar to Meta's, which grants the next 20+ generations of Zuckerberg's control, was considered acceptable after the initial public offering. Still, a reasonable dual-class structure was not, referring to Mark Zuckerberg, the founder of Meta's parent company, Facebook.
In dual-class structures, companies have multiple types of shares with varying voting rights, where founders or early investors usually hold greater voting rights. In contrast, shareholders have shares with less voting power.
Tesla did not provide a comment in response to a request.
Compensation Package Lawsuit
Musk is currently involved in a lawsuit regarding his compensation package. Shareholder Richard Tornetta filed a lawsuit against Musk and the board in 2018 to demonstrate that Musk leveraged his influence over Tesla's board to secure a disproportionately large compensation package that didn't mandate him to work full-time at the electric vehicle maker.
As a response, Musk stated on X that there is no "feud" with the board regarding his new compensation package, mentioning that the ongoing verdict hinders the discussions.
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