Musk and Zuckerberg seek more control to keep funding AI spending

In short: Big investors are getting more cautious about AI spending, but some tech leaders are still pushing to spend tens or hundreds of billions of dollars and are reshaping company rules to do it.

What's going on

Spending on artificial intelligence is still huge, but parts of the stock market have started to worry about the cost. The Financial Times reports that some AI-related stocks fell recently as investors questioned whether this level of building and spending can continue.

Even with those doubts, Elon Musk and Mark Zuckerberg are looking for ways to keep investing heavily in AI. According to the report, they are also trying to reduce the risk of shareholder lawsuits that could slow them down.

Zuckerberg is linked to plans for a new type of Meta share that would let him sell some stock while keeping control. Think of it like changing the voting rules in a club so the founder can take money out without losing the final say. The FT reports that Meta has also worked to improve its legal position in Delaware, including backing changes to the state’s corporate law.

Musk has taken a different route. The report says he moved Tesla and SpaceX away from Delaware incorporations to Texas, after court clashes in Delaware, and this could make it easier to combine the two companies. Texas has been building a more business-friendly legal setup, including a business court and rules that give company boards more freedom unless intentional wrongdoing is shown.

What to watch

The big question is whether AI spending keeps rising even if investors stay nervous. Watch for more legal fights over shareholder rights, and for signs that companies slow down construction of AI data centers and chip buying if profits do not arrive fast enough.

Source: Financial Times