In a bold move, Elon Musk, the chief executive of Tesla, has placed a substantial request before the company’s board. Musk seeks to increase his stake in Tesla to 25%, a decision he links directly to his continued involvement in developing artificial intelligence-based products for the electric car giant.

Musk’s Ultimatum for AI Development

Musk articulated his position via X, the social media platform he owns, stating his discomfort in leading Tesla’s AI and robotics initiatives without a 25% voting control. He emphasized this level of ownership as essential to prevent takeovers and ensure substantial influence over the company’s direction. His demand comes with a caveat: if not met, he will explore product development opportunities outside Tesla.

Impact on Tesla’s Market Position

Tesla’s market valuation, nearly twice that of Toyota Motor, is partly based on investor confidence in its AI-driven future, particularly in self-driving technology. Musk’s stake increase proposal, worth around $83 billion, aligns with recouping his Twitter investment and expanding his influence over Tesla’s strategic AI advancements.

The Challenge for Tesla’s Board

Granting Musk’s request presents a dilemma for Tesla’s board, often criticized for not effectively managing Musk’s influence. Issuing new shares to accommodate Musk’s demands could dilute existing share value and possibly trigger shareholder lawsuits. However, the board could consider a conditional stock option approach, akin to Musk’s previous compensation package tied to specific performance milestones.

Tesla’s AI Endeavors and Public Reaction

Tesla’s AI focus, including the development of the humanoid robot Optimus and advancements in self-driving technology, remains a core part of its strategy. However, Musk’s declaration has prompted mixed reactions online, with supporters endorsing his leadership and critics pointing to the self-inflicted nature of his reduced stake in Tesla.

Elon Musk’s latest demand highlights the interplay of leadership, ownership, and innovation at Tesla. As the company navigates this complex situation, its response will significantly influence its trajectory in the competitive and rapidly evolving field of AI and electric vehicles.