"The moves, remarkable even in the context of Musk's unfettered management style, underscore the profound transformation underway at the car maker as it loses ground in the EV market to Chinese rivals. In place of the discontinued car models, Musk said that Tesla will use the freed up factory space to build Optimus robots, a still largely experimental line of humanoid robots that Musk says will eventually perform everything from household chores to surgery."
"Tesla executives emphasized that the investment in xAI would build efficiencies for Tesla, as it wouldn't have to expend similar resources on AI, and Musk said it would ultimately help Tesla manage the enormous fleets of autonomous vehicles and Optimus robots. "We're just doing what shareholders asked us to do, pretty much," Musk said Wednesday evening on the call, noting that "a lot" of investors had asked for the investment in xAI."
Tesla invested $2 billion in xAI, an AI firm linked to Elon Musk, and discontinued the Model S and Model X to free factory space. The freed space will be used to build Optimus humanoid robots intended for tasks from household chores to surgery. The xAI investment is presented as creating efficiencies, reducing duplicative AI spending and helping manage fleets of autonomous vehicles and robots. Shares rose about 1.8% in after-hours trading. Fourth-quarter revenue fell 3% year-over-year but beat estimates at $24.9 billion. Tesla changed its mission to "build a world of amazing abundance" and framed AI as a path to universal high income and improved medical care.
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