Elon Musk seeks $1 billion compensation package, focuses on AI and robot development over EV guidance

Tesla CEO Elon Musk has requested shareholders approve a $1 billion compensation package, arguing the massive payout is necessary to secure his influence and control over the company's future direction, particularly its artificial intelligence (AI) and robotics initiatives. The request comes as the company faces scrutiny following a third-quarter earnings call where Musk largely bypassed discussion of current electric vehicle (EV) demand and financial guidance, instead focusing on futuristic projects like the Optimus robot and robotaxis.

Compensation Dispute and Corporate Control

Musk formally requested the approval of the compensation package ahead of a shareholder meeting scheduled for November 6. The CEO stated that the funds would not be spent but rather guarded, asserting that the package is crucial for obtaining sufficient voting control and influence to guide the company's destiny. Musk explicitly linked the need for increased influence to the successful development of the Optimus robot.

In a sharp rebuke to critics, Musk labeled two advisory firms that recommended shareholders reject the proposal as "corporate terrorists." He argued that obtaining this compensation package is essential for maintaining control over the company's strategic direction.

Earnings Call Skips EV Guidance

During the third-quarter earnings call, which followed results that missed analyst estimates, Musk focused heavily on his long-term vision rather than immediate financial performance. Investors received no guidance regarding the outlook for the fourth quarter, the demand for the company's electric vehicles following the expiration of a key federal tax credit, or updates on the Cybertruck or the impact of tariffs on auto parts. This lack of traditional financial focus contributed to the company's stock sinking nearly 4% in extended trading.

Musk reiterated his belief that skeptical investors and the public fail to grasp the scope of Tesla's upcoming AI-driven products. He made bold promises regarding the capabilities of the Optimus humanoid robot, claiming it would eventually function as an "incredible surgeon." He also touted the potential of robotaxis, emphasizing the company's shift toward autonomous technology.

AI Chip Manufacturing Strategy

In parallel with the robotics push, Tesla detailed its strategy for developing and manufacturing its proprietary AI chip, known as the AI5. Musk confirmed that the AI5 will be produced by both Samsung in Texas and TSMC in Arizona. The company's explicit goal is to achieve an "oversupply" of the AI5 chips, with any processors not utilized in vehicles or robots being redirected for use in Tesla's data centers.

While Tesla replaced Nvidia's Drive chips with its own processors in its vehicles starting in 2019, Musk clarified that the company continues to rely on Nvidia's graphics processing units (GPUs) for training its AI models. Musk stated that Tesla is "not about to replace Nvidia," indicating a combined approach to hardware development for its AI infrastructure.