Tesla (TSLA) shares moved higher Friday after Elon Musk said late Thursday that he will step aside from his role as CEO of Twitter later next month, but investors looking for a sharper focus from the billionaire entrepreneur could be disappointed.
Musk, who paid $44 billion for Twitter in October last year, has long maintained he would relinquish control of the social media website when he found someone "foolish enough" to replace him as CEO.
But with Tesla facing myriad challenges with respect to increased competition, fading consumer demand, supply chain disruptions and crushing margin pressures, shareholders have been pressuring Musk to name a replacement more quickly than his original suggestion.
Musk's leadership portfolio also includes space exploration group SpaceX, The Boring Company construction group and neurotechnology specialists Neuralink Corp.
Musk said the new CEO, whom media reports have identified as NBCUniversal ad executive Linda Yaccarino, will start "in around six weeks" when he will transition to the role of chief technology officer.
"We believe leaving earlier than originally thought by the end of the year is a positive development for Tesla as well as SpaceX with Musk needing to spend more and more time on these golden child platforms rather than Twitter," said Wedbush analyst Dan Ives, who carries an 'outperform' rating with a $215 price target on Tesla stock.
"We are glad to see a new Twitter CEO take over as a key moment for the Twitter platform with competition, the verification plan, and digital advertising spending front and center," he added.
Tesla shares, which have fallen more than 52% since Musk first made his intentions to purchase Twitter public in April of last year, were marked 2.1% higher in pre-market trading to indicate an opening bell price of $175.68 each.
Musk's move away from day-to-day control of Twitter might not be directly linked to the fortunes of Tesla, however, according to Gene Munster of Deepwater Asset Management.
Munster told CNBC Friday that Musk, who has spoken about stepping aside as CEO of Tesla over the past two years, could be reading to focus on creating a compelling alternative to ChatGPT, the AI-powered augment now imbedded in the Microsoft's (MSFT) Bing search engine.
Musk, who has spoken at length about the “profound risks to society" he says are linked to the unchecked spread of Artificial Intelligence, told Fox News last month that he plans to start "something which I call 'TruthGPT,' or a maximum truth-seeking AI that tries to understand the nature of the universe."
"And I think this might be the best path to safety, in the sense that an AI that cares about understanding the universe, it is unlikely to annihilate humans because we are an interesting part of the universe," Musk said.
Musk's comments came just days before a meeting with Senate Majority Leader Chuck Schumer in Washington, during which the pair "talked about AI and the economy," according to Musk's comments to reporters afterwards.
The New York Times has reported that Musk is now working with University of Toronto professor Jimmy Ba in developing an AI company called X.AI after he grew frustrated by a deal with OpenAI that paid only $2 million a year for data from Twitter used to help build ChatGPT.
Late last year, in a court case brought by Tesla investor Richard Tornetta over a $56 billion pay deal reached with Musk in 2018, James Murdoch, the son of media billionaire Rupert Murdoch and a member of the Tesla board, told the Delaware Chancery that, over "the last few months" Musk has decided who may replace him as CEO were he to leave, or retire from day-to-day operation.
The person was not identified by name.
