Musk aims for 25% voting power at Tesla prior to achieving AI objective
January 16, 2024 – 7:24 AM PST
(Reuters) – Tesla (TSLA.O) CEO Elon Musk has made a bold statement, expressing his discomfort with growing the automaker’s presence in artificial intelligence and robotics without having significant voting control. He believes that having at least 25% voting control of the company is crucial for him to lead the charge in these cutting-edge technologies.
Musk took to social media platform X, formerly known as Twitter, to express his stance. He stated that unless he receives a significant stake in Tesla that grants him influence but doesn’t make him untouchable, he would prefer to focus on developing products outside of the electric-vehicle manufacturer.
While Tesla is known for its groundbreaking “Full Self-Driving” software and humanoid robots, the majority of its revenue still comes from its automotive business.
Industry analysts have recognized Tesla’s technological advancements, such as the Dojo supercomputer for AI training, as key drivers of the company’s valuation. Morgan Stanley analyst Adam Jonas even suggested that Dojo could increase Tesla’s market value by nearly $600 billion.
Following Musk’s comments, Tesla’s shares experienced a 2% drop in premarket trading on Tuesday.
Musk, currently the world’s richest person, currently holds around 13% of Tesla stock. He sold billions of dollars worth of shares in 2022 to finance his purchase of Twitter.
In another X post, Musk expressed his willingness to consider a dual-class share structure to achieve his goal of obtaining 25% voting control. However, he claimed that this option was deemed impossible after Tesla’s initial public offering.
He pointed out the discrepancy between Tesla’s situation and that of Meta, the parent company of Facebook, which allows founder Mark Zuckerberg and future generations to maintain control through a multi-class share structure.
Companies with dual-class structures typically have different types of shares with varying voting rights, giving founders or early investors greater control.
Tesla has not yet responded to requests for comment.
Musk currently faces a lawsuit over his compensation package. Tesla shareholder Richard Tornetta filed a lawsuit in 2018, alleging that Musk used his influence over Tesla’s board to secure an excessive compensation package that didn’t require him to work full-time at the company.
Musk clarified on X that there is no ongoing feud with the board regarding his compensation package, but the pending verdict is hindering further discussions.
Reporting by Chandni Shah and Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Subhranshu Sahu, Jamie Freed and Shounak Dasgupta
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How does Tesla’s situation regarding voting control compare to that of Meta, the parent company of Facebook
January 16, 2024 – 7:24 AM PST
Tesla CEO Elon Musk Urges for Increased Voting Control in Artificial Intelligence and Robotics
In recent developments, Tesla CEO Elon Musk has expressed his concern about the automaker’s involvement in the fields of artificial intelligence (AI) and robotics, asserting the necessity of having significant voting control. Musk believes that obtaining at least 25% voting control of the company is crucial for him to lead the charge in these cutting-edge technologies.
Musk took to the social media platform X, formerly known as Twitter, to convey his stance on this matter. He emphasized that unless he receives a substantial stake in Tesla that grants him influence but doesn’t make him untouchable, he would prefer to focus on developing products outside of the electric-vehicle manufacturer.
While Tesla is widely recognized for its groundbreaking “Full Self-Driving” software and humanoid robots, a significant portion of its revenue still stems from its automotive business.
Industry analysts have acknowledged Tesla’s technological advancements, particularly the Dojo supercomputer for AI training, as key drivers of the company’s valuation. Morgan Stanley analyst Adam Jonas even suggested that Dojo could potentially increase Tesla’s market value by nearly $600 billion.
Following Musk’s comments, Tesla’s shares experienced a 2% drop in premarket trading on Tuesday.
Currently the world’s richest person, Musk holds around 13% of Tesla stock. In 2022, he sold billions of dollars worth of shares to finance his acquisition of Twitter.
In another X post, Musk expressed his willingness to consider a dual-class share structure in order to achieve his goal of obtaining 25% voting control. However, he claimed that this option had been deemed impossible after Tesla’s initial public offering.
Musk pointed out the discrepancy between Tesla’s situation and that of Meta, the parent company of Facebook, which allows founder Mark Zuckerberg and future generations to maintain control through a multi-class share structure.
Companies with dual-class structures typically have different types of shares with varying voting rights, granting founders or early investors greater control.
As of now, Tesla has not yet responded to requests for comment regarding this matter.
It is worth noting that Musk currently faces a lawsuit over his compensation package. Tesla shareholder Richard Tornetta filed a lawsuit in 2018, alleging that Musk used his influence over Tesla’s board to secure an excessive compensation package that didn’t require him to work full-time at the company.
Musk clarified on X that there is no ongoing feud with the board regarding his compensation package.
The situation surrounding Tesla’s involvement in AI and robotics, as well as Musk’s desired level of voting control, remains fluid. It will undoubtedly be interesting to observe how these developments unfold in the coming weeks and months.
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