Tesla CEO Elon Musk.
Credit: Reuters Photo
Elon Musk, the CEO of Tesla, stunned investors by demanding that the company’s board give him shares worth more than $80 billion if it wants him to continue developing products based on artificial intelligence.
In the latest demonstration of his disregard for conventional ways of communicating with investors, Musk said late Monday on X, the social media site formerly known as Twitter that he owns, that he needed to own 25 per cent of Tesla to avoid takeovers and have enough control of the company as it develops robots and other AI technology.
If his demands are not met, Musk said, he would pursue unspecified ventures outside of Tesla. In addition to electric cars, Tesla has been developing a humanoid robot called Optimus and uses AI to develop self-driving technology, a cornerstone of the company’s strategy. Those businesses belong to Tesla, and Musk could not simply walk away with them.
The company’s stock market valuation of almost $700 billion — more than twice as much as Toyota Motor, the world’s largest automaker by annual car sales — is predicated in part on investors’ belief that the company will lead the rest of the industry in developing cars that can drive from place to place without human intervention. Investors are also betting that advanced automation will allow Tesla to manufacture cars much more efficiently and profitably than rivals.
Musk owns 13 per cent of Tesla after selling a substantial portion of his stake to finance his $44 billion acquisition of Twitter. The social media site has struggled under his leadership and has plunged in value. An additional 12 per cent of Tesla would be worth $83 billion at the current share price, effectively recouping Musk’s investment in Twitter — which he has said he regrets — and then some.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25 per cent voting control,” Musk wrote on X. “Enough to be influential, but not so much that I can’t be overturned.”
He went on: “Unless that is the case, I would prefer to build products outside of Tesla.” But he also said the board would take no action until a Delaware judge rules in a lawsuit brought by a Tesla shareholder challenging an earlier compensation plan that was instrumental in making Musk the richest person in the world.