Tesla reveals plans for US$2 billion investment in Musk’s xAI
The EV maker has been increasingly emphasising AI, driverless technology and humanoid robots
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[AUSTIN] Tesla revealed plans to invest US$2 billion into chief executive officer Elon Musk’s artificial intelligence (AI) company, xAI, while reporting higher-than-expected profit for the fourth quarter.
“Together, the investment and the related framework agreement are intended to enhance Tesla’s ability to develop and deploy AI products and services into the physical world at scale,” Tesla said in its quarterly statement.
The investment underscores the deepening ties between Musk’s business interests and highlights Tesla’s growing focus on AI. The electric vehicle (EV) maker has been increasingly emphasising AI, driverless technology and humanoid robots as its traditional business of selling automobiles has struggled.
In November, Tesla’s board said that it would look further into the investment after investors did not formally approve it in a vote at the annual shareholders meeting. The two companies already work together.
Tesla sells megapacks to xAI and xAI’s Grok chatbot is integrated into some Tesla vehicles. Bloomberg also reported that xAI told investors that it aims to build AI that will eventually power humanoid robots such as Optimus.
Adjusted earnings per share were 50 US cents in the quarter, Tesla said on Wednesday (Jan 28), higher than the average of analyst estimates. The results snap a string of quarters in which profit was weaker than expected.
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The better-than-expected profit is a positive sign as Tesla navigates lower EV demand and pivots to robotics and autonomy products. Musk has previously warned that the company faces a rough patch while it works on these new priority areas.
The shares rose 3.4 per cent at 4.20 pm in extended trading in New York. The stock rose 11 per cent in 2025, underperforming the S&P 500 Index. BLOOMBERG
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