Musk denies that Tesla will license xAI’s technology in exchange for revenue-sharing

Tesla CEO Elon Musk’s artificial intelligence (AI) startup xAI will not be licensing out its technology to the carmaker, Musk noted in an X post on Sunday. His post refuted a Wall Street Journal article published on Sept. 7, which claimed that the two companies owned by Musk had chalked out a deal.

WSJ’s claims

Citing anonymous sources familiar with the matter, the WSJ article claimed that Tesla would use AI models developed by xAI to power its driver assistance software, Full Self-Driving (FSD). As part of the deal, xAI would be entitled to a part of Tesla’s revenue.

Under the arrangement, xAI would also help Tesla develop other features, including a Siri-like voice assistant, the article noted.

According to the article, Tesla and xAI executives have agreed to evenly split revenue generated from FSD, which costs users USD 99 per month.

Musk’s denial

According to Musk, Tesla executives have gained crucial knowledge from xAI engineers that has helped them develop FSD and propel the company toward making cars fully autonomous. However, “there is no need to license anything from xAI,” he noted.

He added:

“The xAI models are gigantic, containing, in compressed form, most of human knowledge, and couldn’t possibly run on the Tesla vehicle inference computer, nor would we want them to.”

Musk said that the Tesla AI models are “incredibly “dense” (in a good way lol) intelligence.” This is because the AI models have to compress and translate videos of roads and real world into driving commands in real-time. At the same time, they have to be small enough to run on a much smaller computer with size and bandwidth restrictions.

Musk added:

“Tesla real-world AI also has a vastly larger context size than an LLM, as the combined video history from all cameras is several gigabytes in size.”

Musk founded xAI in July 2023. Although relatively new, Musk believes the company has the potential to become a significant contender in the field. Earlier this month, the xAI team brought its Colossus 100,000 H100 training cluster online. Over the next few months, it is expected to double in size.

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