At Tesla’s upcoming Annual Meeting of Shareholders on November 6th, 2025, investors will be given the opportunity to vote on a unique and forward-looking shareholder proposal. This is a formal request for the Board of Directors to authorize an investment in xAI, Elon Musk’s artificial intelligence company.
The proposal, known as Proposal Seven in Tesla’s preliminary proxy statement, discusses the increasingly deep and synergistic relationship between Tesla and xAI and asks the board to formalize that partnership through a direct investment.
This proposal comes directly from a shareholder, not the company’s board, and strategically aligns two of Elon’s companies more closely.
The Proposal: Capitalizing on Synergy
The proposal itself is a direct request for the board to act. In particular, it resolves that shareholders:
"request that the Board of Directors authorize an investment in xAI, in an amount and form deemed appropriate by the Board, to capitalize on the synergies between the two companies and strengthen Tesla’s position as a leader in AI, robotics, and energy".
The supporting statements go on to lay out a logical argument for the investment. It points to the recent integration of Grok into Tesla vehicles as a prime example of the tangible benefits of collaboration with xAI. The statement argues that as Tesla continues its pivot to become an AI-first company with products like FSD and Optimus, an investment would secure access to talent, capabilities, and services that Tesla could use and may even need to rely on to produce innovative products that drive shareholder value.
The Board’s Position
In a somewhat unusual move, Tesla’s Board of Directors has chosen not to take on an official FOR or AGAINST position on this shareholder proposal. Instead, the proxy statement lists the board’s vote recommendation as NONE.
This neutral stance can be interpreted in several ways. It could be seen as the board sees merit in the proposal’s logic, but does not want to influence shareholders’ votes. It may also reflect the complex nature of a transaction between two companies with leadership overlap.
Existing commercial agreements between Tesla and xAI are already in place. As disclosed in the proxy statement, xAI has purchased Megapacks from Tesla, and has consulting and support agreements, with xAI incurring approximately $198.3 million in expenses to Tesla in 2024 under these agreements. A formal agreement could take this existing relationship to a new level.
While the board isn’t making a recommendation here, the proposal itself presents a compelling vision for the future. A deeper, more formalized partnership through an investment could be the key to accelerating both companies’ progress in the race to develop real-world artificial intelligence.
Tesla is already integrating Grok into Optimus as the “brains” of the robot, and Walter Isaacson, the biographer of Elon’s book, recently said that he expects Tesla and xAI to merge eventually. The outcome of this shareholder vote could influence how closely Tesla and xAI work together in the future.
