Elon Musk’s SpaceX is investing $2 billion into his AI startup xAI. This is nearly half of xAI’s $5 billion equity fundraising round, as reported by The Wall Street Journal.
This investment comes right after xAI merged with X with the combined company’s valuation to $113 billion. According to the report, xAI’s Grok chatbot is already being used for Starlink customer support and could eventually be integrated into Tesla’s Optimus robots too.
SpaceX has publicly invested in xAI for the first time. Until now, SpaceX has mostly kept its investments close to home, with one of the few exceptions being a $5.5 billion satellite project.
Now that SpaceX is backing xAI, reports are surfacing that Tesla shareholders may soon vote on whether to invest in the AI startup too. Musk, replying to a post on X, said the decision isn’t in his hands—and that if it were up to him, Tesla would’ve invested in xAI a long time ago.
In the meantime, Musk’s AI startup xAI recently asked employees to install tracking software on their personal laptops, a move that’s reportedly sparked internal tension and raised serious privacy concerns.
Earlier this month, xAI told the tutors who help train its Grok chatbot that they’d need to start using a tracking tool called Hubstaff, according to a document seen by Business Insider.
If they didn’t have a company laptop, they were expected to install the software on their personal computers by July 11. Sources familiar with the situation said tutors were told they had to allow screen monitoring and that using the tool was not optional.
The company said the tracking software would only be used to monitor websites and apps accessed during official work hours, according to the document. But according to Hubstaff’s own website, the tool can also track things like mouse movements and keystrokes—which raised red flags for some employees.
Slack messages seen by Business Insider show several workers voicing privacy concerns. One even said they planned to resign over the rollout, and their message got dozens of supportive reactions from coworkers. According to Business Insider, one of the workers described the move in a Slack message as “surveillance disguised as productivity” and “manipulation masked as culture.”
READ: SpaceX eyes $400 billion valuation (July 9, 2025)
To address privacy concerns, staff were told they had a couple of options—either buy a new laptop using xAI’s $50 monthly tech stipend or set up a separate user profile on their personal device to keep work and personal browsing apart, according to the document. The software, which requires employees to clock in and out, wouldn’t monitor anything outside of work hours.
While some team members do have company-issued Chromebooks, many rely on their own devices for the job. Ahead of the rollout, tutors were informed that Chromebooks had run out, and there was no clear timeline on when more would be available, sources told BI.
Though the $2 billion investment from SpaceX signals confidence in xAI’s future and a probable bold push to fuse AI with Musk’s other ventures like Starlink and Tesla. The internal backlash over employee monitoring tools show a very different kind of tension brewing.
Between privacy concerns, unclear device policies, and at least one reported resignation, xAI’s rapid rise is being matched by a wave of employee unease. It’s a reminder that scaling big ambitions requires not just capital and vision, but also trust and transparency especially when the future of work, AI, and personal privacy are all on the line.