Teslas Revenue Declines for First Time on Record This Year

Tesla Announces $2 Billion Investment in AI Start-Up as Part of Market Shift

Tesla, Inc. has announced that it will invest $2 billion in artificial intelligence start-up xAI, further solidifying its pivot away from the automotive market. The investment is part of a framework agreement aimed at enhancing Tesla’s ability to develop and deploy AI products and services into various industries.

In its latest earnings report, Tesla revealed a 3% year-over-year decline in revenue for the final quarter of 2025, with total annual revenue reaching $94.8 billion, down from $97.7 billion in the previous year. Net profit also fell 61% to $840 million in the quarter, taking overall profit for the year to $3.8 billion.

The company’s decision to invest in xAI is part of its efforts to diversify and expand into new markets beyond automotive. The investment will support Tesla’s AI initiatives, including the development of its Grok chatbot.

Meanwhile, tech giants Microsoft, Meta, and Samsung Electronics reported strong earnings in their latest reports. Microsoft’s profit rose 60% to $38.5 billion on revenue of $81.3 billion, while Meta’s profit increased by 6% to $22.8 billion on revenue of $59.9 billion.

Samsung Electronics reported a significant increase in profit and revenue, with a three-fold rise from the previous year. The company’s shares rose sharply following the announcement.

Tesla’s shares also saw an increase of 2.2% in after-hours trading, while Microsoft’s shares fell more than 6% due to concerns over capital spending hitting a record high.

Source: Al Jazeera