Tesla to Invest $20 billion on Elon Musk’s AI future

Tesla plans to spend $20 billion on building Cybercabs, humanoid robots and will discontinue Model S and Model X by year end.

Tesla Inc. announced on Wednesday that it will invest in CEO Elon Musk's artificial intelligence company xAI, marking a major step in Tesla’s AI investment strategy and Elon Musk’s AI future. Manufacturing of its Cybercab robotaxi is also set to begin this year.

Tesla plans to spend $20 billion this year on artificial intelligence and robotics to simplify its collection of electric vehicles and alter resources to robots and Al, as part of a comprehensive set of moves that would transform the business from its origins as an automobile maker. After losing the worldwide EV sales title to China's BYD last year, Tesla is now investing in unproven business ventures like fully autonomous cars and humanoid robots.

The capital spend, which is about double what Wall Street expected, would support production development at several plants, growing up the budding robotaxi company, and building out Al infrastructure. Tesla has announced intentions to discontinue the Model S and X sedans and devote that plant capacity to the production of Optimus humanoid robots.

Executive Officer Elon Musk said, “We are making very, very big investments” during the discussions on a conference call.

Musk's plans to build Cybercabs, humanoid robots, Semi trucks, and Roadster sports cars which will result in a succession of industrial investments and will exceed $20 billion in capital expenditures this year, according to Chief Financial Officer Vaibhav Taneja. That is more than double the $8.5 billion in 2025.After-hours trading saw shares rise approximately 3.5%, although they reduced gains on the capex data to trade up 1.8%.

The new deal also includes a plan to invest $2 billion in Musk's xAI business and discussion to possibly construct a semiconductor manufacturing facility. They highlight Tesla's plans to shift its focus to robotics, autonomous technology, and artificial intelligence at the expense of its car-selling business, which has been in decline for the past two years and will face additional difficulties in 2026.