Elon Musk's High-Stakes Game: Can He Secure a 25% Voting Power in Tesla?
Elon Musk continues to be a controversial and pivotal figure in the automotive and technology world. Recently, he addressed accusations of redirecting Nvidia H100 GPUs intended for Tesla to other ventures like X and xAI. According to Musk, Tesla lacks the space to store these GPUs, so he redirected them temporarily. However, he assured that the south extension of Giga Texas will eventually house 50,000 Nvidia H100 GPUs for Full Self-Driving (FSD) training. This decision has broader implications, particularly for Tesla’s shareholders.
Adam Jonas, a Morgan Stanley analyst, has noted that Tesla could slow down its AI efforts if Musk fails to achieve a 25% voting stake in the company. This would impact Tesla’s direct investments in advanced AI if Musk focuses more on entities he controls, like X and xAI. According to Jonas, Musk has several paths to reach a 25% voting stake, even if the investors do not approve the ratification of his 2018 CEO Performance Award. However, this pathway assumes Musk remains the CEO of Tesla, potentially without standard compensation for his efforts since 2018.
Jonas released a detailed note explaining the scenario: "Without Elon Musk achieving a 25% voting stake in the company, we believe Tesla shareholders should be prepared for Tesla to significantly slow down its direct investment in sensitive and advanced AI efforts." During Tesla’s Q4 2023 earnings call, Musk expressed his discomfort in expanding AI and robotics at Tesla without owning 25% of the voting shares. He envisions creating an AI and robotics juggernaut but does not seek additional financial gain. "I just want to be an effective steward of very powerful technology," Musk stated.
While Tesla might still indirectly benefit from AI advancements, Jonas believes most adjacent AI efforts could be concentrated in non-Tesla entities controlled by Musk unless he secures a 25% voting stake. The potential paths for Musk to increase his voting stake might not require the 2018 compensation package. According to Jonas, as investor opinions remain varied leading up to the June 13th shareholder vote, there are numerous strategies Musk could employ to achieve his desired voting power in Tesla over time.
Tesla’s 2024 Annual Stockholders’ Meeting, dubbed the 2024 Cyber Roundup, will take place at Giga Texas on June 13, 2024. As always, the event will be live-streamed, allowing stakeholders and enthusiasts to keep up with the latest developments. The outcome of this meeting could significantly affect Musk’s control over Tesla and the company’s future direction, especially regarding its AI initiatives. If Musk's vision aligns with investor interests, the meeting could mark a pivotal point in Tesla's trajectory.
As Tesla continues to push the envelope in electric vehicles and AI, the stakes have never been higher for Musk. Whether he will manage to gain the 25% voting stake remains to be seen, but one thing is certain: the outcome will have far-reaching implications for Tesla, its investors, and the broader automotive industry.
Stay tuned for further updates as we approach the 2024 Cyber Roundup.