Tesla robotaxi delays leave AI investors waiting on a payoff

Tesla’s plans for self-driving taxis and humanoid robots are progressing more slowly than anticipated, which comes in spite of the company spending staggering funds on artificial intelligence. This has led some investors to ask a question they are used to hearing: when are these AI ventures expected to bear fruit?

The market’s reaction to Tesla’s earnings in the second quarter was characterized by that uncertainty. As Investor’s Business Daily reported, investors reacted with a negative influence on the stock after CEO Elon Musk called upon the investors to be patient regarding the rollout of the robotaxi service and the Optimus robot. This downturn in the stock price was consistent with the general post-earning downturn seen in companies relying on AI technologies, such as Alphabet. Since the important part of the value of Tesla comes from its AI prospects rather than from the sales of products, any delay affects the situation considerably.

A first cash burn in more than two years

Prior to the announcement of its earnings, Reuters claimed that Tesla would suffer its first quarterly cash drain in more than two years as its budget priorities changed, focusing significantly on artificial intelligence infrastructure projects and robotics. It is believed Tesla plans to invest approximately $25 billion in data center and manufacturing in 2026, while estimates made by LSEG stated by Reuters indicate that Tesla will suffer an estimated negative free cash flow of $3.3 billion for the quarter.

… Continue reading the full article at the original source below.