Why Elon Should Step Down as CEO of Tesla
Focus on xAI and Development of AGI

I don't claim to be smarter than Elon. I'm looking at the tea leaves and this is what I see. Of course I'm probably wrong.

To be clear, what I'm suggesting is that Elon step down as CEO, reducing his hours at Tesla from roughly 60 hours a week to 20 hours a week. Those 20 hours would focus on engineering and product development.

He would shift those 40 hours to xAI using that time to recruit top AI engineers, develop AI training and inference hardware, and seek out new sources of data for training.

xAI would remain partners with Tesla and X, getting data from both and sharing xAI products with them (like Grok on the X platform).

1. AGI is more important than Robotaxi/Optimus

Development of AGI (Artificial General Intelligence) - and shortly thereafter ASI (Artificial Super Intelligence) - is an existential threat to humanity. That's the commonly discussed negative side.

There's also a far larger positive side that AGI/ASI would likely create a world of abundance and make the future spectacular.

Tesla's biggest contributions to humanity will be the robotaxi network and the Optimus humanoid robot, driven by development of real world AI.

That real world AI will likely contribute to the development of AGI, but is probably not enough on its own. Elon's concern about AGI being controlled by the wrong forces is a valid one. I trust Elon far more than I trust Larry Page, Mark Zuckerberg, Sam Altman, etc.

For the sake of humanity, we need Elon focused on this mission more than we need him at Tesla.

I say this as a Tesla shareholder who expects to see the stock price fall 50% when Elon steps down as CEO. The future of humanity is more important than my stonks.

2. Developing AGI Within Tesla Is Risky

As Elon has explained, he does not have sufficient control of Tesla given his current share count. There is a substantial risk that nefarious actors (Blackrock, Vanguard, Fidelity, ISS, etc) would acquire enough Tesla stock to exercise control, and thus gain control of any AGI Tesla develops.

There is talk of a new compensation package or shifting to a dual class voting structure. It's unclear if these will be viable, and especially unclear if they will survive court scrutiny.

Changing to Texas gets Tesla away from a particularly bad judge in Delaware. But the Texas judge you end up with might rule the same way. There are many questions that could go against Tesla and Elon.

Will a Texas judge rule that the the existing directors are not independent, following the Delaware judge?
Will Tesla change up the board with new directors who are more independent?
Will those directors approve the changes that would give Elon more control?
Will shareholders approve the changes?

You can hope all these will go the right way but you can't be certain.

3. Elon Adds More Value at xAI

Tesla is well on its way to two major accomplishments - Robotaxi and Optimus - that will make life better for humanity and massively increase Tesla's market cap.

Elon has built great teams within the company. They will achieve these goals with or without him as CEO.

Once they are done, Robotaxi in particular will accelerate the transition to sustainable energy, Tesla's stated goal.

Elon's main contribution at this point on these goals is in his engineering genius and ability to help the teams overcome obstacles.

The company is now 20 years old. Drew Baglino, the heir apparent in my opinion, has broad knowledge of the company, and has been with the company 18 years. He's an adult. He's ready to take over and steer the ship.

The leadership team is solid. Tom, Vaibhav, Franz, Lars, Rohan, Ashok, Pete, Martin, and a long list of others we've seen presenting at Tesla events, are experienced. They know the company. They're ready.

xAI, on the other hand, is fresh and new. It has great people but the company just started. With more time at xAI, Elon can build the company culture, recruit top engineers, and focus on big challenges the company faces like securing sufficient and efficient computing power, and gaining access to valuable data.

4. Elon Focusing at xAI is a Win for Tesla Long Term

In the long run AGI products and services developed by xAI will show up in Tesla products.

xAI's large language models and other models to come will be deployed on the Optimus humanoid robot to facilitate communication with humans and answer questions. Same with the cars.

No other car maker has anything close to such features. Like all Tesla software, it will be better integrated into the cars than anyone else will be able to do.

5. Elon's Emotional Challenge

I think the hardest part of this for Elon is letting his baby grow up. He's been raising Tesla for 20 years and it has been a long and difficult challenge.

But the kid is an adult now, ready to take on the world. Having dad around for advice and an occasional kick in the pants will help, but it's time to let Tesla jump out of the nest and fly on its own.

I'm putting my asbestos suit on for the inevitable flames to come.

Before you reply, please answer these questions for yourself:

Are you more concerned about short term Tesla stock price than you are about the future of humanity?

Do you think that little of the Tesla team that you think they can't run the ship without Elon there 60 hours a week?

How confident are you that changes to give Elon more control of Tesla are likely to succeed?