Friday, August 22, 2025

Is Elon Musk Using Tesla Data to Help Sell xAI?

After previously claiming that the AI startup, xAI, is not raising funds, Elon Musk’s newest venture is reportedly set to reach an $18 billion valuation upon the closure of its current funding round. 

According to Bloomberg, which cited unnamed sources, the round could close soon, with xAI expected to raise $6 billion. Sequoia Capital is said to be among the investors in this round.

The pitch deck for xAI reportedly includes information about Musk’s other ventures, Tesla (Nasdaq: TSLA) and SpaceX, and suggests that the startup could leverage data from X, the social media platform owned by Musk, for training purposes. 

In a recent interview with CNBC’s Squawk Box, former Google CEO Eric Schmidt said that Musk’s pitch is “the combination of Twitter/X and the Tesla geographic information gives him a leg up.”

Curiously, it’s unclear how Tesla investors and users are going to be compensated for xAI data training. Unlike Musk’s other companies, Tesla is publicly traded.

This follows after Musk was reported to have been poaching Tesla engineers for xAI. As mentioned in the earlier article below, Musk had previously cited a “conflict of interest with Tesla” when he left the artificial intelligence research company OpenAI a few years ago. His rationale for starting xAI while still being at the helm of Tesla, which he also calls “an AI company,” remains unclear.

The poaching spree has also extended to xAI’s top competitors including OpenAI, Google Research, and Microsoft Research. 


Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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