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Tesla Asked by Texas Democratic Lawmakers to Delay Robotaxi Launch

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A group of Democratic lawmakers from the Austin area has asked Tesla to postpone the launch of its robotaxi service until September, when a new autonomous-driving law is expected to take effect. The letter, sent on Wednesday, argues that delaying the rollout is in the best interest of public safety and would help build trust in Tesla’s operations.

Tesla CEO Elon Musk had indicated the robotaxi launch could happen as early as this Sunday. However, if Tesla moves forward with the launch this month despite the lawmakers’ request, they demand detailed information on how the company will comply with the new state law.

Last year, Musk shifted Tesla’s focus toward autonomous-driving technology, moving away from rapid growth in electric vehicle sales. Tesla has not commented on the lawmakers’ letter.

The influence of the request is uncertain in Texas, a state governed by Republicans holding majorities in the legislature.

Musk announced in January that Tesla planned to offer autonomous ride-hailing in Austin starting in June. Investors and analysts have closely monitored this rollout, seeing robotaxis and humanoid robots as critical to Tesla’s future market value.

Currently, Texas law permits autonomous vehicles to operate statewide if they meet registration and insurance requirements. The new legislation, passed last month but not yet signed by the governor, will require companies to get authorization to operate and allows authorities to revoke permits if driverless vehicles endanger public safety. It also mandates providing guidance to first responders on how to handle these vehicles in emergencies.

Tesla has provided few details on the launch, stating it will start with 10 to 20 Model Y vehicles operating only in parts of Austin deemed safest. Information about passengers, pricing, operational zones, and remote monitoring remains undisclosed.

Elon Musk’s xAI Set to Raise $5 Billion Debt Despite Tepid Investor Interest

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Elon Musk’s AI startup, xAI, is poised to close a $5 billion debt financing led by Morgan Stanley, although investor demand has been notably modest, according to sources familiar with the matter. The debt package includes a floating-rate term loan, a fixed-rate loan, and secured bonds, with allocations scheduled for Wednesday.

The floating-rate loan carries an interest rate of 700 basis points above the Secured Overnight Financing Rate, while the fixed-rate loan and secured notes offer yields near 12%, significantly higher than the current 7.6% average yield for high-yield bonds. This elevated cost reflects the risks investors associate with xAI’s unrated debt and lack of profitability to date.

Several potential investors declined to participate, citing concerns over xAI’s financial transparency and Musk’s previous financing history. Notably, Musk’s 2022 $44 billion acquisition of Twitter involved $13 billion in loans that lenders had to retain on their balance sheets for two years due to poor secondary market demand.

While the debt issuance was fully subscribed, total orders amounted to roughly 1.5 times the amount offered, below the typical 2.5 to 3 times seen in similar junk bond offerings. Unlike Musk’s Twitter debt deal—where banks guaranteed the sale and committed capital—this transaction is structured as a “best efforts” deal with no such guarantees from Morgan Stanley.

Beyond debt, xAI is also reportedly pursuing a $20 billion equity raise that could value the company above $120 billion, with some investors estimating up to $200 billion.

Elon Musk’s X Sues New York Over Social Media Hate Speech Disclosure Law

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Elon Musk’s social media company, X Corp, filed a lawsuit on Tuesday challenging the constitutionality of New York’s Stop Hiding Hate Act, which mandates social media platforms to publicly disclose how they monitor and manage hate speech, extremism, disinformation, harassment, and foreign political interference.

X argues the law violates the First Amendment and state constitutional rights by forcing the company to reveal “highly sensitive and controversial speech” that New York officials might find objectionable, potentially exposing the company to lawsuits and heavy fines. The law imposes civil penalties of up to $15,000 per violation per day.

The lawsuit, filed in Manhattan federal court, states that deciding what speech is acceptable is a complex issue that “engenders considerable debate among reasonable people,” and that regulating this is not a role for government authorities.

X cited a letter from the law’s sponsors, state Senator Brad Hoylman-Sigal and Assemblymember Grace Lee, accusing Musk and X of having a “disturbing record” on content moderation that allegedly threatens democratic foundations.

New York Attorney General Letitia James, who enforces the law, is the named defendant. Her office did not immediately comment.

Since acquiring Twitter in October 2022 for $44 billion, Musk has promoted himself as a free speech absolutist, significantly reducing content moderation on the platform, which was rebranded as X.

New York’s law, signed in December by Democratic Governor Kathy Hochul with help from the Anti-Defamation League, requires platforms to disclose their efforts and report progress in combating harmful content.

The law mirrors a similar 2023 California law, whose enforcement was partially blocked by a federal appeals court last September over free speech concerns. Notably, California agreed in February to suspend enforcement of disclosure requirements after reaching a settlement with X.

Legislators Hoylman-Sigal and Lee expressed confidence that the court will uphold New York’s law, emphasizing the necessity of transparency given Musk’s resistance.

Case Reference: X Corp v. James, U.S. District Court, Southern District of New York, No. 25-05068.