Elon Musk says he isn't ruling out merging xAI and Tesla

• Elon Musk said it's "not out of the question" to merge his AI startup with Tesla if shareholders approve.
• xAI, which Musk founded in 2023, acquired X in March in an all-stock purchase.
• Tesla shares rose 0.5% but dipped in after-hours Tuesday, remaining around 10% down since January 2.

Elon Musk said on Tuesday that he isn't ruling out merging his AI startup with Tesla.

"Well, I guess anything is possible," Musk told CNBC show host David Faber in a two-part interview, when asked whether Musk would ever consider merging xAI into Tesla as a way to gain more control over the EV company.

"There are no plans to do so," Musk said. "It's not out of the question, but obviously it would require Tesla shareholder support."

Musk launched xAI as a startup in 2023. The company acquired X, his social platform formerly known as Twitter, in an all-stock transaction valuing xAI at $80 billion and X at $33 billion in March. The AI chatbot Grok was also introduced to X and trained in part on the social media platform's data.

Elon Musk said in the Tuesday interview that Tesla and xAI will continue sourcing AI chips from Nvidia and AMD. He told Faber that xAI has deployed 200,000 GPUs at its Colossus facility in Memphis and plans a 1 million-GPU site nearby, but he did not disclose any specific chip orders.

Based on documents previously viewed by Business Insider, xAI is also spending at least $400 million on building a supercomputer in Memphis, and may encounter difficulties because the city's power grid might not yet be capable of powering a project of that magnitude.

Following the CNBC appearance, Tesla shares saw a 0.5% boost at market closing time compared to the day before, but dipped slightly in after-hours trading.

Though Tesla stocks have been on the rise in May since Musk said he would leave DOGE, the EV company's shares are still at around 10% down compared to where it was on January 2 this year amid struggling Q1 sales and declining confidence in Musk's priorities.

Tesla did not respond to a request for comments.