Elon Musk's Dubious Deal for Tesla's Investors Is a Hard Sell

Shareholders are being urged to invest in his high-risk AI venture

- LIAM DENNING

Tesla's investors, perhaps a little troubled by the American electric vehicle maker's sagging sales and profits, are to be offered a bonus: A chance to own a slice of an AI model that recently called itself "MechaHitler." That is but one of the dubious benefits of Elon Musk's plan to have Tesla investors vote on the company investing in his artificial intelligence firm, xAI Holdings.

xAI made headlines for all the wrong reasons last week when its chatbot Grok ran amok with anti-Semitic replies to queries, followed swiftly by the resignation of Linda Yaccarino, chief executive of X, Musk's social media platform that was rolled into xAI earlier this year.

If all that doesn't sound like the best time to pitch Tesla investors on buying in, you maybe weren't around for the SolarCity deal in 2016.

That was when Musk urged Tesla shareholders to buy a faltering rooftop solar company in which he was chair, investor and creditor (his cousin was the CEO). At the time, Musk emphasized the centrality of solar power to Tesla's mission and unveiled a seemingly ingenious product, the solar roof. Today, the solar roof is notable chiefly for its rarity in the wild and Tesla stopped bothering to report solar installations some time ago.