Tesla (TSLA 3.33%) recently disclosed plans to invest about $2 billion in xAI, the artificial intelligence start-up founded by its CEO, Elon Musk.
At first glance, the move might seem unusual. Tesla is primarily known as an electric vehicle manufacturer, while xAI is a young start-up competing in the crowded field of artificial intelligence.
But the investment reveals an important aspect of Tesla’s long-term strategy. The company increasingly relies on advanced AI to power its most ambitious products, from self-driving vehicles to humanoid robots.
For investors, the deal raises an important question: Does Tesla’s investment strengthen its technological advantage, or does it introduce new governance risks?
The answer may be a bit of both.
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