Musk Demands 25% Voting Control at Tesla to Achieve AI Ambitions
Elon Musk insists on having at least 25% voting control at Tesla before leading AI and robotics advancements. Experts raise concerns about the potential conflict between Musk's demands and his responsibilities as CEO. Tesla primarily generates revenue from its automotive business, despite Musk's focus on AI and robotics.
Tesla CEO Elon Musk has made a bold statement, expressing his discomfort with leading the automaker's advancements in artificial intelligence (AI) and robotics without having at least 25% voting control of the company. This would be nearly double his current stake in the company.
In a recent post on the social media platform X (formerly known as Twitter), Musk stated that unless he receives a sufficient amount of stock in the world's most valuable automaker, which would grant him influence but not absolute power, he would prefer to focus on developing products outside of Tesla.
However, experts in governance and analysts have raised concerns about Musk's warning, suggesting that it could potentially infringe on his responsibilities as CEO. Developing AI and robotics outside of Tesla without the necessary voting control may not align with his duties to the company.
Musk has been a vocal advocate for Tesla's partially automated "Full Self-Driving" software and its prototype humanoid robots. While these technologies have garnered attention, it is important to note that Tesla primarily generates its revenue from its automotive business.
Additionally, Musk has been promoting Tesla's Dojo supercomputer, which is designed to train AI models. Analyst Adam Jonas from Morgan Stanley has suggested that this technology could significantly increase Tesla's market value by approximately US$600 billion, as it would accelerate the company's entry into the robotaxi and software services sectors.
Despite Musk's statements, Tesla's shares saw a modest increase of 0.5% on Tuesday. However, they have experienced a decline of over 11% since the beginning of the month.
As the world's richest person, Musk currently owns around 13% of Tesla stock. He recently sold billions of dollars' worth of shares in 2022 to help finance his $44 billion acquisition of Twitter.
In a separate post on X, Musk expressed his willingness to consider a dual-class share structure to achieve his goal of obtaining 25% voting control. However, he claimed that he was informed that such a structure was not possible after Tesla's initial public offering. Musk compared this to the multi-class share structure of Meta (formerly Facebook), which allows the Zuckerberg family to maintain control for generations.
Companies with dual-class structures typically have different types of shares with varying voting rights. Founders or early investors often hold shares with greater voting power, while other shareholders have less influence.
Tesla has not responded to requests for comment regarding Musk's statements.
In addition to his battle for voting control, Musk is currently facing a lawsuit over his compensation package. Tesla shareholder Richard Tornetta filed a lawsuit in 2018, alleging that Musk used his dominance over Tesla's board to secure an excessive compensation package that did not require him to work full-time at the company. Musk has denied any feud with the board and stated that the pending verdict is hindering discussions.
Elon Musk insists on having at least 25% voting control at Tesla before leading AI and robotics advancements.
Experts raise concerns about the potential conflict between Musk's demands and his responsibilities as CEO.
Tesla primarily generates revenue from its automotive business, despite Musk's focus on AI and robotics.