Tesla's demonstration of his induction motor and Westinghouse's subsequent licensing of the patent, both in 1888, put Tesla firmly on the AC side of the War of Currents, an electrical distribution battle being waged between Thomas Edison and George Westinghouse that had been simmering since Westinghouse's first AC system in 1886.
This started out as a competition between rival lighting systems, with Edison holding all the patents for DC and the incandescent light, and Westinghouse using his own patented AC system to power arc lights, as well as incandescent lamps of a slightly different design, to get around the Edison patent.
The acquisition of a feasible AC motor gave Westinghouse a key patent in building a completely integrated AC system, but the financial strain of buying up patents and hiring the engineers needed to build it meant development of Tesla's motor had to be put on hold for a while.
The competition resulted in Edison Machine Works pursuing AC development in 1890; by 1892, Thomas Edison was no longer in control of his own company, which was consolidated into the conglomerate General Electric and converting to an AC delivery system at that point.