Musk’s xAI in talks for share in future Tesla revenue, WSJ reports

(Reuters) -Elon Musk’s AI startup xAI has held talks for a share in future Tesla (NASDAQ:TSLA) revenue in return for giving Musk’s electric vehicle maker access to xAI’s technology and resources, the Wall Street Journal reported on Saturday.

Tesla would license xAI’s artificial-intelligence models to help power full self-driving technology and share some of that revenue with the startup, according to the proposed arrangement as described to investors, the newspaper said.

xAI would also support the development of other features for Tesla, including a voice assistant in its electric cars and software to power its humanoid robot Optimus, the Journal said, citing people familiar with the matter whom it did not identify.

The terms of any revenue-sharing agreement between xAI and Tesla would depend in part upon how extensively Tesla relied on xAI’s technology as opposed to its own, the report said, adding that xAI executives have discussed an even revenue split from Tesla’s FSD.

Tesla did not immediately respond to Reuters request for a comment, while xAI could not be reached.

Musk launched xAI last year to compete with Microsoft-backed OpenAI. It sparked concerns that he might allocate some resources of the automaker to the AI company.

He has said xAI would be “helpful in advancing full self-driving and in building up the new Tesla data center,” adding that there were opportunities to integrate xAI’s chatbot, Grok, with Tesla’s software.

In July, the billionaire CEO said he and the Tesla board would discuss a $5 billion investment in xAI.