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Tesla reveals $2 billion investment in Elon Musk’s xAI and officially kills the Model S and Model X
['Jessica Mathews']
Fortune | FORTUNE
Tesla CEO Elon Musk kicked off the new year by springing several eye-popping surprises on shareholders, including a $2 billion Tesla investment in one of his own companies (the artificial intelligence firm xAI), and the abrupt elimination of two of the company’s car models, the Model S and the Model X.
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.
Still, Tesla beat Wall Street targets, posting $24.9 billion in revenue versus $24.8 billion estimates.
During his appearance at the World Economic Forum in Davos earlier this month, Musk said that Tesla planned to begin selling Optimus robots by the end of next year.
By repurposing the space in its Fremont factory, Tesla said Wednesday, it will be able to build 1 million Optimus robots each year.