Updated January 16th, 2024 at 17:54 IST
Elon Musk demands 25% voting control in Tesla for AI and robotics expansion
Musk demands a sizeable Tesla stake for influence, signalling potential independent projects if control conditions aren't met.
Tesla's AI influence: Elon Musk has expressed his discomfort with expanding Tesla's role in artificial intelligence and robotics unless he attains a minimum 25 per cent voting control, almost doubling his existing stake in the company. Elon Musk insists on a substantial stake in Tesla for influential decision-making but hints at independent product development if the desired level of control is not met.He suggested that, without this condition being met at Tesla, he would prefer to develop products independently of the electric vehicle manufacturer.
Despite Musk's longstanding promotion of Tesla's partially automated "Full Self-Driving" software and humanoid robots, the majority of the company's revenue comes from its automotive business. Analysts attribute Tesla's valuation to its advanced technologies, such as the Dojo supercomputer for AI model training. In September, Morgan Stanley analyst Adam Jonas estimated that Dojo alone could increase Tesla's market value by nearly $600 billion.
Tesla stock dips
Following Musk's comments, Tesla's shares experienced a 2 per cent decline in premarket trading. Currently, holding approximately 13 per cent of Tesla stock, Musk, the wealthiest individual globally, sold billions of dollars in shares in 2022, partly funding his $44 billion acquisition of Twitter.
In a separate post, Musk expressed openness to a dual-class share structure to achieve his 25 per cent voting control goal. However, he noted that such a structure was deemed impossible after Tesla's initial public offering. Musk found it peculiar that Meta's multi-class share structure, providing extended control to future generations of Zuckerbergs, was acceptable pre-IPO, while a reasonable dual-class structure was not allowed post-IPO. Tesla has yet to respond to requests for comment.
Musk's legal battle
Musk is currently facing a lawsuit related to his compensation package. Tesla shareholder Richard Tornetta filed a lawsuit in 2018, alleging that Musk used his influence over Tesla's board to secure an oversized compensation package without committing to full-time work at the company. Musk clarified on social media that there is no board feud regarding his compensation package, and discussions are pending a verdict in the case.
(With Reuters Inputs)
Published January 16th, 2024 at 17:54 IST