Tesla invests $2 billion in xAI, confirms Cybercab production this year

Tesla said it will invest $2 billion in xAI, the artificial intelligence company founded by its chief executive Elon Musk, while reaffirming that production of its Cybercab robotaxi remains on track to begin this year. The move underscores Tesla’s strategic shift from a traditional electric vehicle maker toward an AI- and autonomy-focused business model.

The investment supports Tesla’s push into self-driving technology and robotics, areas central to its long-term valuation. Management said factory investments tied to Cybercabs, humanoid robots, Semi trucks, and the Roadster will drive capital expenditures above $20 billion this year, more than double prior levels. Shares rose after the announcement but pared gains as investors weighed the scale of spending.

Tesla said it will stop selling the Model S and Model X, reallocating factory space to robotics production. While its core EV business remains under pressure from competition and pricing incentives, the company highlighted progress in margins and strong growth in its energy generation and storage segment.

Musk reiterated expectations for broader autonomous deployment, though regulatory hurdles remain for the Cybercab, which is designed without a steering wheel or pedals. Investors are watching rollout milestones closely as Tesla seeks to convert long-promised autonomy into tangible revenue.