Musk's possible media empire rattles Tesla shareholders

Elon Musk's business empire, already spanning electric vehicles, space, AI and social media, may be on the verge of expanding into film and broadcasting. Reports have emerged that Paramount Skydance explored bringing Musk in as an equity investor to help close its acquisition of Warner Bros. Discovery.

If Musk joins as an investor, he would gain a connection to a media giant housing CNN, CBS News and HBO under one roof. But Tesla shareholders are voicing frustration, warning that his attention could be pulled further from the automaker and that dealings between his various companies could grow increasingly tangled.

According to US media outlet Semafor, Paramount executives discussed asking Musk to join a group of equity investors in the combined company on Wednesday (local time). No specific investment amount or terms have been set, and it remains unconfirmed whether a formal offer or actual investment will follow.

The figure connecting Musk and Paramount is Larry Ellison, founder of Oracle and father of Paramount CEO David Ellison. A close associate of Musk, Larry Ellison invested $1 billion when Musk took Twitter private in 2022 and served on Tesla's board from 2018 to 2022.

Could Musk's money ease Larry Ellison's burden? Paramount needs enormous capital to complete its acquisition of Warner Bros. Discovery. The total deal value, including debt, stands at around $110 billion.

Sovereign wealth funds from Saudi Arabia, Qatar and the UAE have agreed to invest about $24 billion in the merger. Once the deal closes, those funds would hold a combined 38.5% stake in the merged company, though without voting rights or board representation.

Larry Ellison is reported to have personally guaranteed more than $40 billion in financing. Bringing in additional billionaire investors — including Musk — would reduce the financial burden concentrated on Ellison and diversify the investor base.

Musk's involvement could also boost market confidence in the combined company, given the strong retail investor following he commands through Tesla and SpaceX.

From cars, rockets and AI to Hollywood — Musk's reported interest in Paramount comes as he moves to bind his companies into a single vast technology ecosystem.

SpaceX this year merged with Musk's AI company xAI, bringing SpaceX's rockets, the Starlink satellite network, social media platform X and the Grok AI chatbot under one corporate roof. The combined entity was valued at $1.25 trillion at the time of the merger.

Tesla also invested $2 billion in SpaceX shares in March, securing a stake of less than 1%. The funds had originally been earmarked for xAI but were redirected into SpaceX equity after SpaceX absorbed xAI. Tesla and SpaceX are also jointly pursuing AI semiconductor production facilities and data center infrastructure projects.

Musk additionally leads neurotechnology firm Neuralink and tunnel-boring company The Boring Company. Should the Paramount investment materialize, his sphere of influence would stretch from automobiles, energy, space, satellite communications, AI and social media to film and broadcasting.

Not all investors view Musk's expansion favorably. Despite hopes that his companies could share technology and capital, concerns persist that Tesla's money and talent are being siphoned off to his other ventures.

SpaceX's initial public offering documents revealed that transactions among Musk's companies — Tesla, xAI and X — totaled $650 million last year, covering everything from vehicle and battery purchases to equity investments and shared aircraft use. The complexity of those dealings has fueled questions about whether the terms and capital allocation are fair to ordinary shareholders of each company, given that Musk wields influence over all of them.

Some long-term investors have criticized Musk for shifting his focus toward SpaceX's space-based data centers and Mars projects at Tesla's expense. They note that a large performance compensation package approved last year was partly intended to keep Musk anchored to Tesla's management — yet reports of a media investment have now surfaced again. With Tesla's share price down more than 20% this year, doubts about Musk's managerial focus have grown even among core investors.

Some investors, however, take a more positive view of the ties between Musk's companies. When news of the SpaceX-xAI merger first broke, Tesla's share price rose about 5%, reflecting optimism about the convergence of space, AI and autonomous driving technology.

Should Musk join as an investor, political controversy would be hard to avoid. The merged company would own both CBS News and CNN. Musk led the Department of Government Efficiency under President Donald Trump's second administration and has donated heavily to Republican candidates across multiple elections. CNN has been a persistent critic of both Trump and Musk.

That said, joining as a simple equity investor would not automatically give Musk editorial or managerial control over the news outlets. The size of his stake, voting rights and any board seat have yet to be determined. Paramount has also agreed, as part of the merger approval process, to establish a separate oversight committee to protect the editorial independence of CNN and CBS News.

Ultimately, the reports say less about Musk diving into media management than about Paramount needing his financial firepower and market influence. But if the investment goes through, it would amplify not only expectations surrounding his expanding empire, but also concerns about Tesla's management focus, conflicts of interest among his affiliated companies, and the independence of the news organizations involved.