Elon Musk launched his artificial intelligence company xAI in 2023 as a public benefit corporation (PBC) in Nevada, which is a legal structure that formally commits a company to having a positive social impact and being transparent about its goals beyond profit. This move came after his falling out with OpenAI, the nonprofit AI lab he co-founded eight years earlier. Musk became increasingly critical of OpenAI after it took billions of dollars from Microsoft (MSFT) and shifted toward becoming a for-profit business. As a result, in early 2024, Musk filed a lawsuit against OpenAI and CEO Sam Altman, accusing them of abandoning the company’s original mission of benefiting humanity.
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Ironically, around the same time, xAI quietly removed its own PBC status, according to CNBC. Nevada records show that xAI ended this designation by May 9, 2024. When xAI later merged with X (formerly Twitter), the newly formed company did not reinstate the PBC status. Interestingly, not long after dropping its public benefit label, xAI began running its Memphis, Tennessee data center (used to train its Grok chatbot) on natural gas turbines. It is worth noting that these turbines were supposed to include pollution controls, but those haven’t been implemented.
As a result, researchers at the University of Tennessee reported that this has worsened air pollution in the area. In addition, critics from the watchdog group LASST argue that xAI only used its PBC status for good publicity and quietly dropped it later without telling the public. Unsurprisingly, LASST’s leaders say that companies in the fast-growing AI sector need to be held accountable for their promises as more investor money flows in and AI systems grow more powerful. Meanwhile, Musk’s own attorney continued referring to xAI as a PBC in court filings, which suggests that even his legal team wasn’t aware of the status change.
What Is the Prediction for Tesla Stock?
When it comes to Elon Musk’s companies, most of them are privately held. However, retail investors can invest in his most popular company, Tesla (TSLA). Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 15 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $305.37 per share implies 11.4% downside risk.
