For much of the summer, Elon Musk was absorbed in something else, leaving Tesla to plummet.

When Elon Musk left DOGE in May, Tesla investors expected the longtime leader to quickly return to headquarters to focus on reversing declining sales and recharging morale at the company. But for much of the summer, he was absorbed in something else.

Musk has been holed up at his latest startup, xAI, trying to keep up with the AI ​​arms race. Meetings with employees often last until dawn as they brainstorm ways to make Grok, xAI’s AI model, go viral.

Musk even personally oversaw the design of a “rebellious, sexy” chatbot named Ani – a cartoon character with blonde pigtails and revealing clothes. Employees were required to submit their own biometric data to train avatars like Ani. Musk relieves stress by playing Diablo – his favorite video game – for hours in his office. He also takes care of his children, who come in and out of the building constantly.

At one point, Musk was at xAI so much that he started holding meetings with Tesla employees in the xAI office.

For years, the 54-year-old billionaire has balanced the responsibilities of running a series of fast-growing companies, including X and SpaceX, with his duties as CEO of Tesla. But with the threat of AI “prize” falling into the hands of rivals, particularly Sam Altman at OpenAI, Musk has increasingly devoted his time to xAI.

In recent weeks, some of Tesla’s biggest investors have been quietly pressing executives and board members about how much attention Musk is really paying to Tesla and whether there is a CEO succession plan. Last week, an unusually large group of Tesla executives, including president Robyn Denholm, former Chipotle CFO Jack Hartung, and Tesla co-founder JB Straubel, met with major investors in New York to lobby for Musk’s new compensation package.

This Thursday, Tesla will announce the preliminary results of a shareholder vote on a massive compensation package for Musk, designed to lock his focus on the company for years to come. The package will increase his ownership stake from about 15% to about 25% over 10 years, representing a potential $1 trillion in stock value if he meets extremely ambitious targets. These include selling 1 million humanoid Optimus robots, and boosting Tesla’s market capitalization to $8.5 trillion from about $1.5 trillion today.

Denholm said in an interview last week that the board doesn’t worry about how Musk divides his time. “Other CEOs might go golfing,” she said. “He doesn’t play golf. He likes to build companies, and not necessarily Tesla.”

She said there are pursuits Musk is best off doing outside of Tesla, and that to meet the goals that trigger his compensation package, he will still have to put “time, effort and energy” into Tesla.

In conversations with major investors, Denholm and Tesla executives have acknowledged that they can’t force Musk to work full-time at the electric car company, and they say his focus on AI will ultimately benefit Tesla (since Tesla is developing many technologies that will use AI). Shareholders will also vote on whether Tesla should invest in xAI, something Musk has publicly supported.

xAI declined to comment. Musk did not respond to an interview request.

In his “All-In” podcast released Friday, Musk said he wants Tesla shareholders to approve a compensation package that ensures he retains significant control of Tesla as the company shifts its focus to robotics. “I’m not going to build a robot army if I can get kicked out at any time,” he said. He also said he’s trying to help humanity control AI through xAI.

Earlier this year, when Musk was serving in the Trump administration as the “de facto head” of the Department of Government Efficiency (DOGE), he kept in touch with Tesla executives on a “go-along” basis.

“We call him at all times, whether it’s 10 a.m., 6 a.m., 12 noon, 12 midnight, whatever,” Tesla CFO Vaibhav Taneja said in an interview.

The responsibility for running xAI at that time fell primarily on co-founders Jimmy Ba and Igor Babuschkin. Musk only dropped in for company-wide meetings once a week.

“I don’t do anything, I just show up occasionally,” Musk joked when Ba and Babuschkin introduced themselves at the Grok 3 launch event in February 2025.

That changed when he left Washington in late May, after clashes with senior Trump administration officials. Musk threw himself back into xAI, sometimes sleeping for days at a time in the xAI office in Palo Alto—right across the street from Tesla’s engineering headquarters.

At the time, xAI’s Grok chatbot wasn’t generating much revenue and had very few users compared to OpenAI’s ChatGPT. Musk set a goal of “smashing and rebuilding” the entire company.

He ditched all-hands meetings in favor of one-on-one meetings with employees, often lasting hours. Many employees had to change their schedules to accommodate Musk’s “strange hours”—especially in the hectic weeks leading up to the July launch of Grok 4, the latest model of xAI.

Musk has put his own personal stamp on how Grok responds to users. He oversaw the deployment of a massive xAI data center in Memphis, helped design animated chatbots like Ani, and launched Grok Imagine, an AI-powered photo/video generator.

He’s still working on Tesla, and this summer he helped Tesla launch a robotaxi service in Austin, Texas. But Tesla’s core business continues to falter. In the quarter ended June 30, Tesla vehicle sales fell 13.5%—the second straight quarter of declines.

“We could have a couple of tough quarters,” he told Tesla investors on a conference call announcing earnings. The annual shareholder meeting, which is usually held in June, was moved to November this year.