How Musk Could Tie Together Tesla and xAI

At Tesla’s annual meeting earlier this month, shareholders showed little enthusiasm for a proposal that the electric vehicle maker invest in one of CEO Elon Musk’s other companies, xAI. But Musk’s revelation at the meeting that Tesla is considering building its own chip fabrication plant signaled another way his two companies could work together.

Musk had already discussed plans for such a chip fab internally at Tesla months before the shareholder meeting, describing it as a make-or-break project for the company, according to a person with direct knowledge of the comments. If Tesla goes forward with a chip fab, xAI would likely buy chips from it, according to another person familiar with the matter. Musk also hinted earlier this month that SpaceX may one day use Tesla-designed chips to power data centers in space. The possibility of Tesla building a chip fab to supply several of Musk’s companies would make the automaker even more central to his empire.