Tesla Looks To Go Back In The Red On AI Spending - Jalopnik

Tesla looks to go back in the red on AI spending focuses on expectations that the automaker will report its first quarterly cash burn in more than two years. A Reuters report dated July 21 says Tesla’s spending on AI and robotics is rising, intensifying scrutiny from investors about when the bets will pay off. CEO Elon Musk has shifted the company’s emphasis from manufacturing cars to building “physical AI” businesses, including self-driving taxi concepts and humanoid robots. The article notes that Tesla’s valuation depends heavily on that promise, while projected spending on AI infrastructure, including data centers, and manufacturing capacity is expected to reach $25 billion this year—outpacing cash generated by core automotive and energy operations each quarter. Morgan Stanley analysts are cited saying capex is more than doubling while free cash flow turns negative, increasing demand for proof that spending is strengthening Tesla’s “physical AI” advantage. The piece also links the AI software effort to xAI, owned by SpaceX, which is also tied to Musk’s broader network of companies.