00:00The real headline here seems to be the continuing melding of all of Elon Musk's
00:05business all around, at least for right now, is his main public vehicle, and that is Tesla.
00:10Including news that it will invest $2 billion to buy preferred shares of his AI company.
00:15XAI Bloomberg Tech co-host Ed Ludlow joining us right now to talk a little bit more about
00:20I guess the blurred lines when it comes to this Tesla business and which quite frankly
00:23might be the appeal.
00:25For a lot of investors.
00:26Yeah.
00:27Tesla participated in the Series E, $2 billion.
00:30The preferred stock.
00:31And actually in the fine print of the shareholder deck, they even go further and expand.
00:35Explain the rationale that they have arranged a framework where Tesla can leverage.
00:40XAI's work in models to accelerate what Tesla wants to do in the physical world.
00:45In other words, humanoid robotics and autonomous driving.
00:48Like in the deck, you're absolutely right.
00:50Remain.
00:51This could not be more clear.
00:52The bread and butter legacy business of selling EVs to consumers.
00:55Even the high-flying energy storage business is now kind of secondary to this focus.
01:00of Tesla becoming a physical AI company.
01:02Reminder that actually when shareholders.
01:05Voted on the non-binding proposal for Tesla to invest in XAI in.
01:10November.
01:11A lot of shareholders abstained because XAI is.
01:15It's a startup that's burning through billions of dollars of cash each quarter.
01:19And so even the most bullish.
01:20Rich names on Tesla.
01:21Look at that and say, do you want Tesla, which is doing its own.
01:25internal work on software and hardware and AI to be carrying the bag on a loss making business
01:30like.
01:30XAI, but they've pulled the trigger nonetheless.
01:32Yeah.
01:33Burning through billions when it comes to XAI.
01:35But set to get another two billion from Tesla.
01:38You mentioned that, you know, this is.
01:40It's more about Tesla transitioning to a physical AI company.
01:43But let's talk a little bit about.
01:45About the core business as it stands right now because.
01:47Yes.
01:48You take a look at fourth quarter profits, Ed.
01:50Actually, they weren't that bad.
01:51Weren't that bad.
01:52There was growth in FSD subscriptions in the.
01:55fourth quarter active subscriptions and FSD now 1.1 million.
01:59And what.
02:00What Tesla does like loads of companies is put the plus and minus columns together of factors.
02:05They're saying that going forward profit is going to be boosted by software sales, which if you believe in that long.
02:10Term Tesla thesis you want to hear.
02:11I'm just looking at the Bloomberg and like honestly, like it's so important.
02:15So just go back and check the data.
02:17We know what happened in twenty twenty five with the second consecutive.
02:20Slide in deliveries, shrinking deliveries growth.
02:23But this was the first drop.
02:25In annual revenues.
02:26So while test has been able to offset the drop in consumer.
02:30Review deliveries, bringing revenue to other places.
02:33Revenue overall did fall.
02:35Year on year in twenty twenty five.
02:37And people will look at that because you have to remember that for all these.
02:40Long term AI related goals.
02:42The board still requires Elon Musk.
02:45Is a mandatory target for his one trillion dollars of potential compensation to deliver twenty.
02:50million EVs to consumers over that period, meaning he has to average five hundred thousand.
02:55But yeah, AI everything.
02:56And I got a lot more questions about FAB, SpaceX, everything else for the call.
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