Tesla Invests $2B in Musk's AI Venture xAI

Tesla announced a significant $2 billion investment in xAI, the artificial intelligence company founded by CEO Elon Musk. This strategic move highlights Tesla's evolving identity as an AI-focused entity, with its substantial valuation increasingly tied to its AI and autonomous driving endeavors.

Production timelines for Tesla's highly anticipated Cybercab robotaxi and Semi trucks are reportedly on schedule for the current year. This confirmation aims to bolster investor confidence, particularly as the company has previously missed delivery promises.

In the fourth quarter of 2025, Tesla reported revenue of $24.9 billion, surpassing analyst estimates. Adjusted earnings per share also exceeded targets, and the automotive gross margin, excluding regulatory credits, came in at 17.9%, significantly above expectations.

The company's energy generation and storage business showed notable growth, with energy storage deployments increasing by approximately 29% to a record 14.2 gigawatt-hours in the fourth quarter. This growth was driven by sustained demand for grid-scale batteries supporting renewable energy infrastructure.

Despite competitive pressures and the end of U.S. tax incentives for electric vehicles, Tesla's focus remains on advancing its self-driving technology and robotics. The company is leveraging lower-priced vehicle models to expand its fleet, with the long-term goal of generating higher-margin software revenue.