"Tesla will invest $2 billion in xAI, the social media and artificial intelligence company Musk controls. It would seem to be a conflict of interest, but there has been no outcry. Musk's SpaceX has already put money into xAI. Tesla wants access to xAI to help it build robots and a true self-driving car. A broad license of xAI software might have done just as well and would not have taken the $2 billion off Tesla's balance sheet."
"Musk says billions of dollars will go toward the new Optimus robot. It will, he says, cut much of the need for human labor worldwide and " eliminate poverty." Companies have dreamed about making a fully operational robot for decades. This has never worked. All experiments to build a robot so advanced have stumbled because sophisticated software was lacking. Tesla's challenge in the self-driving business is that it has competition."
Tesla plans to discontinue the Model S and Model X and reallocate part of those production facilities toward vehicles with complete self-driving capability. Tesla will invest $2 billion in xAI, which SpaceX has already funded, to help build robots and a fully autonomous car; a broad software license might have avoided the cash outlay. 2025 revenue is projected at $98.4 billion, down 3%. Capital spending will rise to $20 billion, about double last year. Self-driving and robotaxi tests still require human safety backups. Waymo leads in testing cities and multi-manufacturer licensing while Tesla's service would operate only on Tesla cars. Musk asserts Optimus could reduce global human labor needs and address poverty, though prior robot efforts failed primarily due to inadequate software.
Read at 24/7 Wall St.
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