Investors Fret Over Tesla’s $25 Billion A.I. Bet
Tesla expects to spend $25 billion in capital expenditures this year on artificial intelligence, humanoid robots, and other projects, which is expected to drag its free cash flow into negative territory. Wall Street is worried about the costs of Tesla's A.I. ambitions, causing its shares to drop over 3% in premarket trading.
Tesla is investing heavily in artificial intelligence and robots, with a planned $25 billion capital expenditure this year. The company's CFO, Vaibhav Taneja, stated that this is the right strategy to position Tesla for the next era. Tesla's automotive revenue was up 16% year over year, but vehicle sales were down sharply. The company is working on autonomous vehicles and Optimus humanoid robots, requiring significant investments, including a multibillion-dollar manufacturing base called TeraFab. Wall Street is concerned about the costs of Tesla's A.I. bets, with shares down over 3% in premarket trading. Elon Musk is betting that investors will be patient, but results are expected soon.
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