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Shareholders to vote if Tesla can invest in xAI, Musk says

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Musk deepens Tesla-xAI ties, but does not support merger

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Tesla shareholder meeting set for November 6

(Adds context throughout, recasts paragraphs 1-3)

July 14 (Reuters) -

Elon Musk ruled out a merger between Tesla and xAI but said

he plans to hold a shareholder vote on investment in the

artificial intelligence startup by the automaker, in the latest

step to deepen integration across his business empire.

His comments followed a

Wall Street Journal report

on Saturday that SpaceX, Musk's rocket firm, will invest $2

billion in xAI as part of a $5 billion funding round aimed at

keeping pace with rivals, including OpenAI in the

capital-intensive AI race.

Musk, Tesla and xAI have not responded to Reuters

requests for comment.

The billionaire's companies already share close ties.

XAI's Grok chatbot is rolling out to the automaker's vehicles,

and Tesla engineers assisted Musk after his 2022 buyout of

Twitter, the social media platform now known as X.

Responding to a user post on X asking Tesla investors if

they supported a merger between the two companies, Musk on

Monday replied "No." He had said on Sunday he would ask Tesla

shareholders to vote on whether the automaker can invest in xAI.

"If it was up to me, Tesla would have invested in xAI

long ago," Musk had said on X, having previously signaled that

close ties between the companies could help advance Tesla's

autonomous-driving ambitions.

Integrating technology, talent and financial backing is

a theme that runs across Musk's empire of companies. Earlier

this year, xAI acquired Musk's X in a $33 billion

deal

that valued the combined group at $80 billion at the time.

That deal meant the X platform would come in handy to

further distribute xAI products, while also providing a

real-time feed of users' posts, screenshots and massive amounts

of other data.

Investments into xAI would help Grok better compete with

OpenAI's ChatGPT by increasing capital toward research and

development.

xAI recently launched Grok 4, its latest flagship AI

model. While Musk has touted it as "the smartest AI in the

world," Grok still lags ChatGPT in terms of usage.

Tesla had last week said it was planning to hold its

annual shareholder meeting on

November 6

, setting the date a day after a group of 27 investors

pushed for it, citing legal obligations.

(Reporting by Deborah Sophia and Gnaneshwar Rajan in Bengaluru;

Editing by Mrigank Dhaniwala and Arun Koyyur)