Tesla: Why isn't it building data centers, and why is SpaceX? Elon Musk's 25% voting rights comment and AI strategy

Given that data centers are a highly profitable sector in the future, it is difficult to understand why Tesla is not undertaking this business itself but entrusting it to other affiliates. In particular, the reaction is one of bewilderment that Tesla's excellent construction capabilities are not being utilized.

Looking for the background to this situation, it becomes clear that Elon Musk had already forewarned this two years ago. The current phenomenon, where the center of gravity for AI business is shifting towards SpaceX rather than Tesla, can be understood through Musk's past statements. At the time, Musk's remarks provide an important clue to explaining the current complex situation.

On the 11th, U.S. time, Florida Governor Ron DeSantis personally test-rode the Cybercab at the 750-acre autonomous driving test site in Fivebundale, passing various risk scenarios. It successfully navigated situations such as a child running into the road, a collision during a police stop, and sudden cut-ins. Robotaxis require regulatory approval from each state, not a blanket federal approval, to spread, making this successful test in Florida significant for future expansion.

This strike began with Tesla service center employees demanding a collective agreement, and due to Tesla's refusal, it expanded into a solidarity strike involving postal workers, dockworkers, and electricians. The union stated that the strike was no longer effective and claimed that Tesla had bought out all union organizers. While it is unknown whether the union's claims are true, it is noteworthy that Tesla's firm stance ultimately prevailed after three years.

SpaceX has experience building the supercomputers 'Colossus' and 'Colossus 2' operated by XAI. Colossus 1 built a data center with 200,000 GPUs in just 122 days, and Colossus 2, currently under construction, is attracting attention as the world's first gigawatt-class data center. Notably, Tesla's 'Megapack' was used to stabilize the 150MW power of Colossus 2. While Tesla's technology is clearly integrated and used within these data centers, the fact that XAI is responsible for construction and command, not Tesla, raises questions.

Tesla has demonstrated outstanding factory construction capabilities, reviving the old Fremont automobile factory to revitalize U.S. manufacturing, and establishing the Shanghai Gigafactory from permit to first vehicle production in less than a year. Giga Texas and Giga Berlin were also built at similar speeds. Given Tesla's ability to build factories so quickly, it is puzzling why it is not building data centers. Seeing SpaceX, which has less experience in data center construction, build facilities at a rapid pace, there are voices of dissatisfaction wondering why Tesla is not doing the same.

SpaceX has set a goal to increase data center power and cooling capacity to 20GW by the end of 2027. With SpaceX building data centers and leasing them to other AI companies, generating substantial revenue, shareholder dissatisfaction with Tesla not engaging in this business is growing. Tesla shareholders find it strange that a company with world-leading factory construction capabilities is not pursuing the data center business, and they express hope that Tesla could build data centers under its own name to generate profits. This situation has even led to suspicions that Elon Musk is intentionally suppressing Tesla's stock price.

He made a shocking statement, saying that if this voting control were not secured, he would prefer to build AI-related products outside of Tesla. This is interpreted as a CEO publicly expressing dissatisfaction with the company's ownership structure and effectively stating his intention to pursue AI business elsewhere.

25% is interpreted as enough to have a significant say, but also a level that could be completely overturned. At the time, Musk's Tesla voting rights had dropped to 13% due to his large stock sales to fund the Twitter acquisition. As of April this year, according to SEC filings, his stake in Tesla is 19.9%, secured when the Delaware Supreme Court reversed a 2018 compensation package invalidation ruling.

The newly approved compensation package for 2025 amounts to a maximum of 423.74 million shares and has not yet been reflected in Elon Musk's current stake. If all these shares are realized and voting rights are transferred, Elon Musk's ownership in Tesla is expected to rise to 26%. This is a level that could exceed the 25% he requested.

Currently, Tesla adopts a shareholder democracy structure, granting one vote per common share. However, some argue that this shareholder democracy structure may not be suitable for the current situation. There is concern that in the rapidly changing AI industry environment, where quick decision-making is needed, a democratic decision-making process could be an obstacle.

On November 6 last year, Tesla announced to shareholders a vote on XAI investment, and the actual vote took place two months later. A proposal for approximately $5 billion in investment in Elon Musk's XAI company was put forward, but despite having more 'yes' votes, it was rejected due to a provision in Tesla's articles of incorporation that counts abstentions as 'no' votes. This case showed that shareholders' intentions may not always be clearly reflected in specific proposals.

At the shareholder meeting, Elon Musk's compensation package, worth up to $1 trillion, passed with overwhelming support of over 75%. This clearly shows shareholders' optimistic view of the company's future growth. However, at the same time, shareholders clearly expressed their opposition to investing Tesla's funds in Elon Musk's other companies. It was a scene that clearly demonstrated shareholders' opposition to Tesla investing in XAI to grow its AI.

This amount did not require another shareholder meeting, and in this round, XAI was valued at $230 billion. Two weeks later, on February 2, SpaceX announced its decision to acquire XAI entirely. This brought the combined valuation of SpaceX ($800 billion) and XAI ($230 billion) to $1.25 trillion. Ultimately, although Tesla shareholders opposed it, the $2 billion that the Tesla board invested at its discretion was converted into SpaceX's stake, meaning the investment proceeded despite shareholder opposition.

Citing the acquisition of the loss-making SolarCity by Tesla in 2016 and Elon Musk's acquisition of Twitter, it pointed out that Musk made decisions to move assets and value between companies he controls, and Tesla shareholders bear the risks. Indeed, Tesla shareholders have even filed a lawsuit for breach of fiduciary duty due to this incident.

This stands in stark contrast to his situation at Tesla, where he can exercise only about 20% of the voting rights. At SpaceX, Elon Musk can decide almost everything, and he has declared that he will lead SpaceX in the direction he desires, based on his overwhelming 82.4% voting power.

He further added that by September, AI revenue will be significantly larger than all of SpaceX's other businesses combined. SpaceX, originally known as a satellite internet company, has been redefined overnight as an AI company without shareholder explanations or votes. This decision appears possible because Elon Musk holds an overwhelming 82.4% of the voting rights.

This voting structure provides an important clue as to why Elon Musk is shifting AI leadership towards SpaceX. Elon Musk likens the current AI situation to 'war,' emphasizing that in war, the decision-maker must be the commander. He appears to have judged that in a wartime situation requiring swift decisions in seconds, relying on a single decision-maker is best, unlike peacetime where decisions involve consensus among many. He is presumed to have concluded that Tesla's shareholder democracy structure cannot make decisions at the necessary speed, and therefore, he is shifting the center of gravity of the AI business towards SpaceX, where his command authority is 82.4%. His declaration that SpaceX is a '99% AI company' also clearly shows where the goal of the current AI war lies. Elon Musk says he must win this war, or else 'we will be under the unbearable, hypocritical rule of AI,' speaking with urgency.

Whether Elon Musk's decision is truly the right one remains a separate issue. Just as a commander's decisions are not always right, there is no guarantee that going into a 'wartime system' will always yield good results. Of course, other big tech companies like Meta and Alphabet also adopt similar structures with overwhelming voting rights, so it is not a unique structure only seen at SpaceX. However, complex problems can arise when one person controls two companies, such as Tesla and SpaceX, with overlapping assets and businesses, but with different strengths of voting rights. According to Elon Musk's logic, the two companies should merge for efficient vertical integration, but from the perspective of Tesla shareholders, they are watching all decisions being made and executed externally while they argue that shareholders, not Elon Musk, should make the decisions.