Elon Musk Hints at Possible Tesla and xAI Merger Amid AI and Energy Push

Update: 2025-05-21 14:22 IST
Elon Musk Hints at Possible Tesla and xAI Merger Amid AI and Energy Push
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Could two of Elon Musk's most ambitious ventures, electric vehicle giant Teslaand cutting-edge AI startup xAI, one day become one? That's the questionbuzzing in the tech world after Musk's recent remarks. Speaking with CNBC'sDavid Faber on Tuesday, the visionary entrepreneur acknowledged the possibilityof a merger, though he quickly added, "It’s not something I’m currentlythinking about." He emphasised, "obviously it would require Teslashareholders support."

While these comments suggest no immediate plansare in motion, they've ignited fresh speculation about Musk's ever-growingfootprint across both the automotive and artificial intelligence landscapes. For those tracking Musk's moves, xAI burst onto the scene in2023, quickly acquiring the social media platform X (formerly Twitter) andembarking on an aggressive expansion into computing power.Its "Colossus" facility in Memphis,Tennessee, already boasts over 200,000 GPUs, with Musk eyeing an even granderdata centre nearby, aiming for a staggering 1 million GPUs.

Musk,ever the futurist, has long predicted the bottlenecks in AI development."A few years ago, I made a very obvious prediction, which is that thelimitation on AI will be chips," he shared during the interview. He confirmed that both Tesla and xAI will continue to procurechips from industry leaders like Nvidia and AMD, and potentially othermanufacturers.This comes despite a past directive from Musk to Nvidia to prioritize xAI'schip orders over Tesla's, highlighting the intricate dance between his variousenterprises. Indeed, financial filings reveal xAI'ssignificant investments in Tesla's Megapacks – large-scale energy storagesystems – with approximately $191 million spent in 2024 and another $36.8million through February 2025.

However,xAI's rapid growth hasn't been without its challenges.While Memphis officials have welcomed the Colossusfacility as a step toward a high-tech future, local communities have voicedconcerns about its environmental impact.The reliance on natural gas-burning turbines, which emitnitrogen oxides linked to respiratory issues, has drawn scrutiny.Environmental advocates even suggest the company mayhave operated without proper permits, potentially violating the Clean Air Act.

Lookingahead, Musk foresees another looming hurdle for AI: power supply."I think the limitation will move from chips toelectrical equipment, and then there will be a fundamental electricitygeneration shortage," he warned, predicting this could happen as early asmid-2026.

Inthe global race for AI supremacy, Musk observes that while China is currentlyleading in power generation investment, the US maintains its edge in innovation."To have breakthrough innovation you have toquestion authority," he concluded, a philosophy that undoubtedly underpinshis own disruptive approach to technology.

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