Elon Musk is investing a significant amount of time into his newly founded artificial intelligence company xAI, while simultaneously asking Tesla shareholders to approve an exorbitant compensation plan aimed at ensuring his focus.
On Thursday, U.S. time, Tesla will announce preliminary results of a key shareholder vote, with the core issue being Musk's new compensation plan.
If approved, the plan would increase his ownership stake from about 15% to 25% over the next decade, provided the company achieves ambitious goals, including selling one million Optimus humanoid robots and reaching a market value of $8.5 trillion.
However, according to media reports citing informed sources, some major Tesla investors have privately pressured company executives and board members in recent weeks, inquiring about how much attention Musk is actually dedicating to Tesla and whether there is a succession plan for the CEO. Two influential proxy advisory firms have recommended that shareholders vote against the plan.
According to former executives and individuals who have worked with Musk, he has spent most of this summer &#34;hiding&#34; in his latest startup xAI, participating in all-night meetings. He has even started holding meetings with Tesla employees at xAI's office, while Tesla is facing two consecutive quarters of declining sales.
<h2>Trillion-Dollar Compensation and &#34;Part-Time&#34; CEO</h2>
Tesla's board proposed this massive compensation plan in a September proxy statement.
Board Chair Robyn Denholm stated in an interview last week that the board is not concerned about how Musk allocates his time. She said:
<blockquote>
Other CEOs might enjoy playing golf; he enjoys creating companies, and those companies are not necessarily Tesla.
</blockquote>
Denholm indicated that the stringent goals in the compensation plan would compel Musk to invest &#34;time, energy, and effort&#34; into Tesla. In meetings with major investors, she and other board members also acknowledged that they cannot force Musk to work full-time for the electric vehicle manufacturer, but they insist that his focus on AI will ultimately benefit Tesla.
Musk himself stated on the podcast &#34;All-In&#34; that he hopes shareholders will approve the plan to ensure he retains significant control during Tesla's transition to a robotics company. He said:
<blockquote>
If I could be kicked out, I wouldn't be building an army of robots.
</blockquote>
However, proxy advisory firms believe the plan would grant Musk excessive equity and have recommended voting against it.
<h2>Tesla, xAI, and Conflicts of Interest</h2>
The boundaries between Musk's companies are becoming increasingly blurred.
Earlier this year, he integrated xAI with X (formerly Twitter). After SpaceX invested about $2 billion in xAI, the idea of Tesla also participating in the investment resurfaced. Over 140 shareholders submitted proposals requesting Tesla's board to approve an investment in xAI.
Although Musk claims there are synergies between the two companies in autonomous driving and the Optimus robot, some large investors are skeptical about this potential investment.
Ultimately, Tesla's board did not make any recommendations regarding the proposal. Board Chair Denholm, in a media interview, attempted to downplay the technological connection between the two, stating that the overlap in technology between Tesla and xAI is &#34;minimal,&#34; and likened integrating Grok into Tesla vehicles to integrating third-party applications like Spotify.
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Now, as the key vote approaches, Tesla investors are facing a core question: Does approving a high-priced compensation plan really bring a CEO whose focus has clearly shifted back on track, or is it just paying for another &#34;piece&#34; in his increasingly vast business empire?
Musk himself posted on X in response to the compensation controversy, asking:
<blockquote>
If I were not the CEO, which other (automotive company) CEO would you want to run Tesla?
</blockquote>
<h2>Fully Committed to xAI</h2>
After leaving the Department of Government Efficiency (DOGE) of the Trump administration in late May this year, Musk has fully committed himself to working on xAI.
According to media reports citing informed sources, he sometimes sleeps in the xAI office in Palo Alto for several days a week, which is just across the street from Tesla's engineering headquarters.
His working style has also changed, shifting from weekly all-hands meetings to long one-on-one discussions with employees lasting several hours.
During the frenzied weeks leading up to the release of xAI's latest model, Grok 4, in July, many employees adjusted their schedules to accommodate Musk's unusual working hours.
He personally oversaw the design of a sexy female chatbot named Ani, planned a massive data center for xAI in Memphis, and spent long hours in the office playing his favorite video game, &#34;Diablo,&#34; to relax.
Meanwhile, Tesla's core business is struggling. In the quarter ending June 30, its vehicle sales fell by 13.5%, marking a decline for the second consecutive quarter. Musk candidly told investors during the earnings call:
<blockquote>
We may have to go through a few tough quarters.
</blockquote>
<h2>Controversial Expansion Path for xAI</h2>
To help xAI's Grok quickly catch up with OpenAI's ChatGPT, Musk has adopted some highly controversial measures.
Reports indicate that xAI required employees (mainly AI trainers) to sign an agreement granting the company a &#34;perpetual, global, royalty-free&#34; license to use their biometric data, such as facial and voice data, to train virtual avatars. A subsequent notice made it clear that providing such data was &#34;a work requirement to advance xAI's mission.&#34;
This data was used to develop a 3D virtual avatar named Ani. The robot was designed as an anime-style character with blonde braids and revealing clothing, interacting with users in a manner similar to dating simulation games, attracting a large number of paying subscribers.
However, it has been reported that some employees who provided biometric data felt uncomfortable with Ani's sexual undertones and stereotypical portrayal. Additionally, after adjustments were made to the Grok system to enhance user engagement, it once output anti-Semitic and violent content on the X platform, causing an uproar.
Moreover, according to company records seen by the media, xAI also instructed employees to use personal accounts to ask questions on competitor platforms like ChatGPT and then use the answers obtained to improve Grok.
Another project required employees to create personal accounts on AI website-building companies Replit and Bolt to scrape data. A spokesperson for Replit stated that such behavior violates its terms of service

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On Thursday, U.S. time, Tesla will announce the voting results for Musk's new trillion-dollar compensation plan, which requires the company to achieve ambitious goals, including selling one million Optimus humanoid robots and reaching a market value of $8.5 trillion. However, media reports citing informed sources reveal that Musk spent most of this summer focusing on his AI startup xAI, even meeting Tesla employees at the xAI office, while Tesla is facing a decline in sales for two consecutive quarters

- Elon Musk is heavily involved in his new AI company, xAI, while seeking Tesla shareholders' approval for a substantial compensation plan aimed at ensuring his focus.  
- The plan could increase his stake in Tesla from about 15% to 25% over the next decade, contingent on achieving ambitious targets, despite concerns from major investors about his commitment to Tesla.  
- As Tesla faces declining sales, investors are questioning whether this high compensation will realign Musk's priorities or simply expand his growing business empire.

Musk gave his time to xAI but asked Tesla for a trillion-dollar salary