Tesla to invest $2 billion in xAI

Tesla announced today that it will invest $2 billion in CEO Elon Musk’s artificial-intelligence company xAI, Reuters has report. The company also stated that production plans for its Cybercab robotaxi remain on track for this year.

This news aligns with Musk’s strategy to shift Tesla from an electric vehicle manufacturer to an AI company, a transition central to the company’s approximately $1.5 trillion valuation. Confirmation of the production timeline is important for investor confidence, as Tesla has previously missed several targets set by Musk.

However, Musk’s plans to produce Cybercabs, humanoid robots, Semi trucks, and Roadster sports cars will require a series of factory investments. Chief Financial Officer Vaibhav Taneja indicated these investments will push capital expenditures above $20 billion this year, which is more than double the $8.5 billion figure for 2025.

Following the announcement, Tesla shares rose approximately 3.5% in after-hours trading. The gains moderated to 1.8% after the capital expenditure details were disclosed.

According to Thomas Monteiro, a senior analyst at Investing.com, Tesla is entering a transition phase. During this period, the company is asking investors to support potential future revenue from its self-driving software and robotaxi business, ahead of a recovery in automotive sales. Monteiro noted that rollout metrics, rather than vehicle deliveries, will now be the most important leading indicator.

Musk, who has previously provided inaccurate forecasts regarding robotaxi deployment, stated he expects to have fully autonomous vehicles operating in a quarter to half of the United States by the end of this year. He had earlier projected robotaxis would be available to half of the U.S. population by the end of 2025, but later revised that goal to deployment in the top eight to 10 metropolitan areas. The company has not met these targets, having launched only a limited robotaxi service in Austin, Texas.