Elon Musk confirms his threat: give me 25% of Tesla or you don't get AI and robotics
Elon Musk's Ultimatum: 25% of Tesla for AI?
Elon Musk has issued an ultimatum to Tesla shareholders, demanding 25% control of the company to continue developing AI and robotics technologies, which he deems essential for Tesla's future. Musk, who currently holds about 13% of Tesla, argues that without increased control and the reapproval of his 2018 compensation package, he may not incorporate these critical technologies into Tesla's operations. This stance has raised concerns about the implications for the company's direction and governance.
What significant changes to Tesla's structure and operations did Musk propose in exchange for increasing his shareholding?
Elon Musk proposed significant changes to Tesla's structure and operations in exchange for increasing his shareholding to 25% voting power. The changes include:
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Reincorporating Tesla in Texas: This would involve moving the company's legal headquarters from its current location in California to Texas.
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Reapproving his 2018 compensation package: Musk's 2018 compensation package was rescinded due to a judge finding that he had too much undue influence on the board. Reapproving the package would grant him more shares in the company, bringing him closer to the desired 25% voting power.
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Keeping AI and robotics within Tesla: By approving a post on X, Musk made it clear that if these conditions are met, he would keep AI and robotics products within Tesla, allowing the company to continue its growth and potentially become the largest company in the world.
These changes are seen as controversial, with some stakeholders expressing concern over Musk's demands and the potential impact on Tesla's future.
Why did Elon Musk describe himself as "uncomfortable" with building AI products at Tesla under the current shareholding structure?
Elon Musk expressed discomfort with building AI products at Tesla unless he secures approximately 25% voting control of the company. This stance stems from his belief that without this level of control, he cannot ensure the company's direction and safeguard against potential takeovers by what he refers to as "dubious interests." Musk's current shareholding stands at about 13%, significantly less than the 25% he desires. He argues that with 25% voting power, he would have sufficient influence to be decisive yet could still be overruled in a fair manner if double the number of shareholders opposed him. This control is crucial for him to comfortably lead Tesla's ambitious AI and robotics ventures, which he deems vital to the company's future success and valuation.