Tesla Sells $430 million worth of giant backup battery Megapacks to xAI, Elon Musk’s According to an artificial intelligence startup, by 2025 Archive Thursday.

Sales to xAI account for about 3.4% of Tesla’s energy business revenue, which grew 27% from $10.1 billion in 2024 to $12.8 billion last year, the filing said.

Tesla’s energy unit, which sells solar photovoltaic and battery storage systems of all sizes, was a bright spot for the company as auto revenue fell 10% to $69.5 billion, weighed down by a tarnished brand reputation and an aging product lineup.

As cars remain Tesla’s main source of revenue, total sales It fell about 3% for the year, the first decline on record.

Musk first merged xAI in March 2023 and publicly disclosed its existence four months later, describing it as a politically incorrect competitor to OpenAI. Musk co-founded OpenAI as an artificial intelligence lab in 2015 and left in 2018, a few years before the company released ChatGPT. The two sides are currently engaged in intense litigation, with a trial expected to begin in April.

Tesla said in its fourth-quarter earnings report released on Wednesday, invest xAI invested $2 billion as part of the startup’s latest funding round.

Tesla’s investment follows multiple global investigations announced into xAI’s Grok chatbot and image generator, which enabled the widespread creation and distribution of explicit deepfake images without consent.

Earlier this month, xAI said it had raised $20 billion in its latest funding round from a number of investors, including NVIDIA and Cisco. Reuters reported on Thursday that SpaceX was weighing Merge with xAI Ahead of Musk’s aerospace and defense company’s planned IPO

XAI previously announced that it is using Tesla Megapacks to power its data infrastructure in and around Memphis, Tennessee, which is home to its Colossus data center.

Megapacks are used in commercial and utility-scale developments, and Tesla’s newer Megablock is a combination of four Megapacks around a transformer. The system uses lithium-ion or other batteries to help data centers and utility companies avoid power outages, allowing energy sources such as solar and wind to be used for storage.

In 2025, xAI installed and used 35 natural gas turbines to power Colossus plant operations, according to aerial video obtained by the Southern Environmental Law Center. Turbine emissions cause community uproar, residents complain Foul odors, health issues, and the inability to open the windows in your home.

Recently, the Environmental Protection Agency Updated a rule Regarding the use of such turbines, it is made clear that they are not exempt from the need for a Clean Air Act permit.

In a lawsuit pending in Delaware, Musk is accused of breaching his fiduciary duty to Tesla shareholders by diverting Tesla’s resources to xAI.

watch: Musk’s xAI completes $20 billion in financing