Elon Musk wants 25% Tesla voting control before pursuing his ambitious artificial intelligence (AI) goals.
Currently, Musk holds around 13% stake in the company but does not have proportional voting rights. His endeavor to increase his voting share to 25% indicates his intent to have a more substantial say in the company’s decision-making process.
Further, it’s been reported that Musk might be considering a dual-class share structure to achieve his goal of getting 25% voting control. This approach could potentially provide him with the desired control without diluting the existing shareholders’ stakes.
Musk said he would feel “uncomfortable” growing Tesla into a leader in AI and robotics without having the desired level of control. He even suggested that if he doesn’t get more voting control, he prefer to build products outside of Tesla. This statement underscores the importance Musk places on having a significant say in the company’s direction, particularly regarding the development of AI technologies.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand that Tesla is not one startup, but a dozen. Simply look at the delta between what Tesla does and GM.
As for stock ownership itself being enough motivation, Fidelity and other own similar stakes to me. Why don’t they show up for work?” Musk posted on his social media platform X, formerly Twitter.
Musk’s proposal for more voting control comes amidst fierce competition in the electric car and tech sectors. It’s a critical moment for Tesla, considering the outcome could significantly influence the company’s future trajectory.
If Musk secures the desired voting control, it could potentially accelerate Tesla’s AI projects, given his strong advocacy for AI. However, it also raises important questions about corporate governance and the distribution of power within major corporations.
Wedbush Managing Director Dan Ives has expressed optimism that the Tesla Board and Elon Musk will resolve the 25% voting control issue within the next 3 to 6 months. He anticipates that all AI initiatives will remain within Tesla, despite the potential for some market disruptions during this process, which he believes will be managed effectively for shareholders.
Image Source: Bloomberg
