Tesla Plans $2 Billion Investment in Musk's xAI

Group 1 - Tesla is investing $2 billion to purchase preferred shares of Elon Musk's AI company XAI, indicating a strategic alignment between Tesla and XAI to leverage AI advancements for Tesla's physical products [1][4] - The focus of Tesla is shifting towards becoming a physical AI company, with humanoid robotics and autonomous driving as key areas of development, overshadowing its traditional EV sales and energy storage business [2][3] - Despite concerns from shareholders regarding XAI's significant cash burn, Tesla has proceeded with the investment, reflecting confidence in the long-term potential of AI integration [3][4] Group 2 - Tesla's fourth-quarter profits showed growth in Full Self-Driving (FSD) subscriptions, reaching 1.1 million active subscriptions, which is expected to contribute positively to future profits through software sales [5][6] - In 2025, Tesla experienced its first annual revenue decline, despite offsetting drops in consumer EV deliveries through other revenue streams, highlighting challenges in maintaining growth [6][7] - Elon Musk is still required to meet a target of delivering 20 million EVs to consumers by 2030 to qualify for a potential $1 trillion compensation, necessitating an average of 500,000 deliveries per year [7]