Elon Musk has denied claims that Tesla will license technology from AI startup xAI in exchange for revenue. The rumors began after an article in the Wall Street Journal said the two companies had reached an agreement. Musk said Sunday on X (formerly Twitter) that the reports were false.

The Wall Street Journal article, published on September 7, said Tesla planned to use AI models developed by xAI in its Full Self-Driving software. The report said xAI would get some of Tesla’s money from FSD subscriptions, which cost users $99 a month. The article said xAI will also work on other Tesla features such as a voice assistant and software for the robot Optimus.

WSJ report on Tesla-xAI deal and Musk denies it

The WSJ report said that Tesla and xAI executives agreed to split revenue from FSD. This deal would strengthen the ties between Musk’s two businesses. xAI would be a key technology provider for Tesla. Musk quickly debunked the WSJ’s claims on X. He said that Tesla has benefited from xAI engineers, but there is no need to license xAI technology. Musk said the AI models from xAI are too big to use in Tesla vehicles. “The xAI models are huge and contain a lot of human knowledge. They couldn’t run on Tesla’s vehicle inference computer,” Musk said.

Musk also said that Tesla’s AI models are designed to handle real-world driving, processing lots of video data in real-time. He said Tesla’s AI is “incredibly dense.” It has to work with the limits of the vehicle’s hardware, which includes a small size and limited bandwidth. Musk said Tesla’s AI can process several gigabytes of video history from multiple cameras at once, which large language models like those from xAI can’t do.

xAI has made an impact since it started in July 2023, despite Musk saying there is no Tesla-xAI licensing deal. The startup, founded by Musk, is already a big name in AI. xAI activated its Colossus training cluster earlier this month. It is the most powerful AI training system in the world. The cluster has 100,000H100GPUs and is expected to double in size. Musk wants xAI to succeed, but he says it won’t be used in Tesla cars. Tesla will keep developing its own AI systems for autonomous driving.

Speculation and investor concerns persist. Musk’s rebuttal hasn’t entirely quelled speculation about Tesla and xAI. Some investors and analysts are worried about conflicts of interest between Tesla and xAI. In recent months, Musk has been moving resources between xAI and Tesla. This has raised concerns, particularly among Tesla shareholders, some of whom have filed lawsuits alleging that these moves have hurt the carmaker’s value.

Musk says Tesla’s work with xAI has been good for both companies. He has shown how Tesla has learned from xAI, especially with FSD technology. It is not yet clear how the two companies will work together in the future. Musk says that Tesla’s AI is advanced enough without xAI’s technology.

Elon Musk said the WSJ’s claims are false. This shows that Tesla and xAI will not enter into a formal licensing agreement. As both companies work on AI, people will probably keep watching how they work together. For now, Tesla is sticking to its plan. It is using its AI to make self-driving cars.

Featured image credit: Open Grid Scheduler / Grid Engine