News
Elon Musk’s SpaceX AMA: Living on Mars, Spaceship Info, Timeline
SpaceX CEO Elon Musk hosted a Reddit AMA (Ask Me Anything) earlier this afternoon and spent several hours drinking whiskey, trolling the audience, answering some great questions, and generally having a blast. He revealed a vast array of fascinating new details about SpaceX’s giant new rocket (BFR), its upper stage spaceship (BFS), and much more.
All of Musk’s answers from the AMA have been collated and organized by category below. You’ll want to shy away from the AMA page itself, currently clocking in at more 10,000 comments.
When useful, particularly dense and technical responses have been summarized in italics for a broader audience.
Living on Mars
Q: Obviously there will be an extreme amount of care put into what is sent on the first missions, and the obvious answer of “Solar Panels” and “Fuel Production Equipment” is included, but what else?
A (Elon): Our goal is get you there and ensure the basic infrastructure for propellant production and survival is in place. A rough analogy is that we are trying to build the equivalent of the transcontinental railway. A vast amount of industry will need to be built on Mars by many other companies and millions of people.
Q: Does your Mars city feature permanently anchored BFS spaceships?
A (Elon): Wouldn’t read too much into that illustration
The aforementioned Martian city. Spaceships can be seen near the center. (SpaceX)
Q: Have any candidate landing sites for the Mars base been identified?
A (Elon): Landing site needs to be low altitude to maximize aero braking, be close to ice for propellant production and not have giant boulders. Closer to the equator is better too for solar power production and not freezing your ass off.
Q: Who will design and build the ISRU system for the propellant depot, and how far along is it?
A (Elon): SpaceX. Design is pretty far along. It’s a key part of the whole system.
Without ISRU (In-Situ Resource Utilization), BFS is unlikely to ever be able to take humans to Mars affordably enough to enable large colonies. This news is thus of huge importance, and suggests that SpaceX will be able to focus on developing BFR and BFS near-term.
Another hypothetical SpaceX city on Mars. Bases will need to be located near water resources. (SpaceX)
SpaceX Big F** Spaceship (BFS)
Q: Will the BFS landing propellants have to be actively cooled on the long trip to Mars?
A (Elon): The main tanks will be vented to vacuum, the outside of the ship is well insulated (primarily for reentry heating) and the nose of the ship will be pointed mostly towards the sun, so very little heat is expected to reach the header tanks. That said, the propellant can be cooled either with a small amount of evaporation. Down the road, we might add a cryocooler.
A (Elon): exactly (while methane could be kept in its liquid form solely through high pressure storage, the pressures required are immense and would require tanks that would be far too heavy for a rocket’s second stage.
Cold liquid oxygen and methane will unavoidably warm up over time, eventually returning to their gaseous forms if allowed. SpaceX’s solution for BFS, which will spend several months between Earth and Mars, is to rely on the Ship’s already great insulation, as well as minimal evaporative cooling (similar to how swamp coolers work).
Q: Will the BFS heat shield be mounted on the skin, or embedded?
A (Elon): The heat shield plates will be mounted directly to the primary tank wall. That’s the most mass efficient way to go. Don’t want to build a box in box.
Dragon 2’s PICA-X heat shield can be seen on the right. BFS’s heat shield will be made of the same material, albeit on a much larger scale. (SpaceX)
Q: Can the BFS delta wings and heat shield be removed for deep space missions?
A (Elon): Wouldn’t call what BFS has a delta wing. It is quite small (and light) relative to the rest of the vehicle and is never actually used to generate lift in the way that an aircraft wing is used.
Its true purpose is to “balance out” the ship, ensuring that it doesn’t enter engines first from orbit (that would be really bad), and provide pitch and yaw control during reentry.
Q: Why is the 2017 BFS spaceship largely cylindrical?
A (Elon): Best mass ratio is achieved by not building a box in a box. The propellant tanks need to be cylindrical to be remotely mass efficient and they have to carry ascent load, so lowest mass solution is just to mount the heat shield plates directly to the tank wall.
For a rocket, mass ratio refers to its weight with a full load of propellant divided by its weight while completely empty. The lighter a rocket’s structure, the more mass it can lift into a given orbit.
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- SpaceX’s conceptual Interplanetary Transport System from 2016 was considerably larger and more structurally complex than 2017’s BFR. (SpaceX)
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- The relatively cylindrical BFS reduces complexity and lowers weight. (SpaceX)
Q: How does the BFS achieve vertical stabilization, without a tail?
A (Elon): Tails are lame
A (Elon): +1 (The space shuttle’s vertical stabilizer was completely useless for most of the reentry profile, as it was in complete aerodynamic shadow. I think it’s clear a craft doesn’t need one for reentry, only for subsonic gliding, which BFS doesn’t really do.)
BFS doesn’t need a tail because tails add weight, are of little use during orbital reentry, and BFS is not intended to glide.
Q: Why was the number of BFS landing legs increased from 3 to 4?
A (Elon): Because 4
A (Elon): Improves stability in rough terrain
Q: How is the radiation shielding in the ITS?
A (Elon): Ambient radiation damage is not significant for our transit times. Just need a solar storm shelter, which is a small part of the ship. Buzz Aldrin is 87.
While radiation fearmongers may balk at this statement, it is to some extent true. The risks from radiation (PDF) for a six month journey in deep space are approximately similar to several dozen CT scans, while two years spent on the surface of Mars with little to no shielding would result in about the same amount of exposure. Underground habitats could alleviate a considerable amount of the risk from living on Mars’ surface.
The issues and dangers posed by radiation ought not be trivialized but they can be dealt with, particularly if BFR can deliver massive payloads to the planet.
Q: Why was the location and shape of the BFS header/landing tanks changed?
A (Elon): The aspiration by the change was to avoid/minimize plumbing hell, but we don’t super love the current header tank/plumbing design. Further refinement is likely.
Header tanks refer to smaller tanks contained within the main propellant tanks that are used to ignite engines in microgravity. It’s easier to pressurize or simply fill the smaller tanks than it is to do so with the massive main tanks.
BFS’ header tanks circled in red. (SpaceX)
BFS Tanker
Q: Will the BFS tanker’s payload section be empty, or include extra propellant tanks?
A (Elon): At first, the tanker will just be a ship with no payload. Down the road, we will build a dedicated tanker that will have an extremely high full to empty mass ratio (warning: it will look kinda weird).
Using one version of the BFS as both a tanker and ship will streamline the initial development process for the rocket.
Two Spaceships docked for refuelling. (SpaceX)
Q: Will the BFS tanker ships (have to) do a hoverslam landing?
A (Elon): Landing will not be a hoverslam, depending on what you mean by the “slam” part. Thrust to weight of 1.3 will feel quite gentle. The tanker will only feel the 0.3 part, as gravity cancels out the 1. Launch is also around 1.3 T/W, so it will look pretty much like a launch in reverse….
BFS will land relatively gently, and BFR’s liftoff will also be gentle.
Development schedule
Q: With the first two cargo missions scheduled to land on Mars in 2022, what kind of development progress can we expect to see from SpaceX in the next 5 or so years leading up to the maiden flight?
Will we see BFS hops or smaller test vehicles similar to Grasshopper/F9R-Dev? Facilities being built? Propellant plant testing? etc. etc.
A (Elon): A lot. Yes, yes, and yes.
A (Elon): Will be starting with a full-scale Ship doing short hops of a few hundred kilometers altitude and lateral distance. Those are fairly easy on the vehicle, as no heat shield is needed, we can have a large amount of reserve propellant and don’t need the high area ratio, deep space Raptor engines.
Next step will be doing orbital velocity Ship flights, which will need all of the above. Worth noting that BFS is capable of reaching orbit by itself with low payload, but having the BF Booster increases payload by more than an order of magnitude. Earth is the wrong planet for single stage to orbit. No problemo on Mars.
The first real tests of the BFR will be done by hopping a full-scale BFS “several hundred kilometers”. BFS is capable of launching itself and a tiny payload into orbit, but the utility is limited on Earth. On Mars, BFS will be far more capable as a single stage to orbit (SSTO) launch vehicle.
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- F9R-dev, used to test vertical take off and landing for Falcon 9. BFR will go through a similar program with its spaceship upper stage prior to orbital missions. (Steve Jurvetson)
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- F9R sadly suffered a software bug and self-destructed in 2014, but SpaceX had already learned most of what it needed to begin Falcon 9 recoveries. (Steve Jurvetson)
Raptor and rocket propulsion
Q: Why was Raptor thrust reduced from ~300 tons-force to ~170 tons-force?
A (Elon): We chickened out. The engine thrust dropped roughly in proportion to the vehicle mass reduction from the first IAC talk. In order to be able to land the BF Ship with an engine failure at the worst possible moment, you have to have multiple engines. The difficulty of deep throttling an engine increases in a non-linear way, so 2:1 is fairly easy, but a deep 5:1 is very hard. Granularity is also a big factor. If you just have two engines that do everything, the engine complexity is much higher and, if one fails, you’ve lost half your power. Btw, we modified the BFS design since IAC to add a third medium area ratio Raptor engine partly for that reason (lose only 1/3 thrust in engine out) and allow landings with higher payload mass for the Earth to Earth transport function.
The Raptor engine’s maximum thrust has been decreased mainly because the size of the rocket decreased, from 12m to 9m in diameter. For redundancy’s sake, SpaceX has added a third central engine to the spaceship, versus the two engines mentioned at the 2017 IAC.
BFS’ delta “wings” from the rear of the ship. Also shown are the Raptors, with the two in the center now reportedly expanded to three engines. (SpaceX)
Q: Will the BFR autogenous pressurization system be heat exchanger based?
A (Elon): We plan to use the Incendio spell from Harry Potter
A (Elon): But, yes and probably
Autogenous pressurization refers to the method of propellant tank pressurization used. In microgravity conditions, tanks must be pressurized to keep fuel flowing to the engines and to improve the density of the fuel. While Falcon 9 currently uses high-pressure helium, ITS and now BFR have been designed to use the actual propellant in their tanks (methane and oxygen) for pressurization. This reduces the number of failure modes on BFR and improves the spaceship’s payload capabilities.
Q: Will the BFS methalox control thrusters be derived from Raptor or from SuperDraco engines?
A (Elon): The control thrusters will be closer in design to the Raptor main chamber than SuperDraco and will be pressure-fed to enable lowest possible impulse bit (no turbopump spin delay).
Like Falcon 9, BFR will need gas thrusters (RCS, reaction control system) to control its orientation (and refuel) while in microgravity conditions. While Falcon uses cold nitrogen gas thrusters, BFR will utilize the propellant it is already carrying for Raptor, methane and oxygen. Again, the goal of this is to reduce complexity.
Q: Could you update us on the status of scaling up the Raptor prototype to the final size?
A (Elon): Thrust scaling is the easy part. Very simple to scale the dev Raptor to 170 tons.
The flight engine design is much lighter and tighter, and is extremely focused on reliability. The objective is to meet or exceed passenger airline levels of safety. If our engine is even close to a jet engine in reliability, has a flak shield to protect against a rapid unscheduled disassembly and we have more engines than the typical two of most airliners, then exceeding airline safety should be possible.
That will be especially important for point to point journeys on Earth. The advantage of getting somewhere in 30 mins by rocket instead of 15 hours by plane will be negatively affected if “but also, you might die” is on the ticket.
SpaceX’s subscale Raptor, the one seen in videos and photos of it firing, is understood to be a bit more than half the size of the operational engine described at IAC 2017. Increasing the scale of the engine is not the difficult aspect of development. Rather, optimization, weight reduction, and extreme reusability are the main sources of difficulty needed before Raptor is flight-ready. This reusability is central to the goal of reliable and rapid reuse of orbital-class rockets.
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- SpaceX revealed this stunning photo of Raptor’s first (partial) hot-fire test the night before Musk’s talk at Guadalajara. (SpaceX)
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- SpaceX’s subscale Raptor engine has completed more than 1200 seconds of testing in less than two years. (SpaceX)
Q: Can BFS vacuum-Raptors be fired at sea level pressure?
A: The “vacuum” or high area ratio Raptors can operate at full thrust at sea level. Not recommended.
Put simply, vacuum nozzles do not like to operate in an atmosphere.
Mars communications
Q: Does SpaceX have any interest in putting more satellites in orbit around Mars (or even rockets) for internet/communications before we get feet on the ground? Or are the current 5-6 active ones we have there sufficient?
A (Elon): Yes
Q: Also will there be some form of an internet or communications link with Earth? Is SpaceX going to be in charge of putting this in or are you contracting some other companies?
A (Elon): If anyone wants to build a high bandwidth comm link to Mars, please do.
Taken side by side, this likely indicates that SpaceX will develop a high-bandwidth Mars-Earth communications link if nobody else does, but that they would logical prefer that someone else builds that infrastructure beforehand.
Q: The concept of an internet connection on Mars is kinda awesome. You could theoretically make an internet protocol that would mirror a subset of the internet near Mars. A user would need to queue up the parts of the internet they wanted available and the servers would sync the relevant data.
A (Elon): Nerd
A (Elon): But, yes, it would make sense to strip the headers out and do a UDP-style feed with extreme compression and a CRC check to confirm the packet is good, then do a batch resend of the CRC-failed packets. Something like that. Earth to Mars is over 22 light-minutes at max distance.
A (Elon): 3 light-minutes at closest distance. So you could Snapchat, I suppose. If that’s a thing in the future.
The communication delay between Earth and Mars (at least several minutes one-way) will prevent any Martian habitats from simply integrating with Earth’s Internet. The delay will require some sort of mediation. As an example, a user on Mars could select the websites they want to browse or videos they want to watch beforehand, and they would be available between several minutes and an hour later.
SpaceX’s Starlink satellite constellation efforts could provide the company with valuable experience that can be applied around Mars. (unofficial logo by Eric Ralph)
Boring!
Q: Boring question about Mars:
A (Elon): More boring!
Miscellaneous silliness
Q: This is one bizarre AMA so far…
A (Elon): Just wait…
Q: i feel like thats a threat. “just wait. it will get way more bizarre than that. let me finish my whiskey”
A (Elon): How did you know? I am actually drinking whiskey right now. Really.
…No comment…
All things considered, this was a wildly successful AMA. Elon clearly had a whole lot of fun, the audience got lightheartedly trolled, and SpaceX fans will undoubtedly be chewing over the technical details he elucidated for weeks to come. Special thanks are owed to the subreddit /r/SpaceX and user /u/_Rocket_, who together managed to flood the AMA with an array of intelligent, pointed, and reasonable questions, at least ten of which were answered by Musk.
Tesla is bringing closure to its flagship Model S and Model X vehicles, which CEO Elon Musk said several years ago were only produced for “sentimental reasons.”
The Model S and Model X have been light contributors to Tesla’s delivery growth over the past few years, commonly contributing only a few percentage points toward the over 1.7 million cars the company has handed over to customers annually since 2022.
However, the Model S and Model X have remained in production because of their high-end performance and flagship status; they are truly two vehicles that are premium offerings and do not hold major weight toward Tesla’s future goals.
On Wednesday, during the Q4 2025 Earnings Call, Musk confirmed that Tesla would bring closure to the two models, ending their production and making way for the manufacturing efforts of the Optimus robot:
“It is time to bring the Model S and Model X programs to an end with an honorable discharge. It is time to bring the S/X programs to an end. It’s part of our overall shift to an autonomous future.”
Musk said the production lines that Tesla has for the Model S and Model X at the Fremont Factory in Northern California will be transitioned to Optimus production lines that will produce one million units per year.
Tesla Fremont Factory celebrates 15 years of electric vehicle production
Tesla will continue to service Model S and Model X vehicles, but it will officially stop deliveries of the cars in Q2, as inventory will be liquidated. When they’re gone, they’re gone.
BREAKING: Tesla will wind down Model S and Model X production next quarter, Elon Musk confirms.
“It is time to bring the Model S and Model X programs to an end with an honorable discharge.” pic.twitter.com/Czn7aQjJE1
— TESLARATI (@Teslarati) January 28, 2026
Tesla has been making moves to sunset the two vehicles for the better part of one year. Last July, it stopped taking any custom orders for vehicles in Europe, essentially pushing the idea that the program was coming to a close soon.
Musk said back in 2019:
“I mean, they’re very expensive, made in low volume. To be totally frank, we’re continuing to make them more for sentimental reasons than anything else. They’re really of minor importance to the future.”
That point is more relevant than ever as Tesla is ending the production of the cars to make way for Optimus, which will likely be Tesla’s biggest product in the coming years.
Musk added during the Earnings Call on Wednesday that he believes Optimus will be a major needle-mover of the United States’ GDP, as it will increase productivity and enable universal high income for humans.
Investor's Corner
LIVE BLOG: Tesla (TSLA) Q4 and FY 2025 earnings call
Tesla’s (NASDAQ:TSLA) earnings call follows the release of the company’s Q4 and full-year 2025 update letter.
Tesla’s (NASDAQ:TSLA) earnings call follows the release of the company’s Q4 and full-year 2025 update letter, which was published on Tesla’s Investor Relations website after markets closed on January 28, 2025.
The results cap a quarter in which Tesla produced more than 434,000 vehicles, delivered over 418,000 vehicles, and deployed 14.2 GWh of energy storage products. For the full year, Tesla produced 1.65 million vehicles and delivered 1.63 million, while total energy storage deployments reached 46.7 GWh.
Tesla’s Q4 and FY 2025 Results
According to Tesla’s Q4 and FY 2025 Update Letter, the company posted GAAP earnings per share of $0.24 and non-GAAP EPS of $0.50 in the fourth quarter. Total revenue for Q4 came in at $24.901 billion, while GAAP net income was reported at $840 million.
For full-year 2025, Tesla reported GAAP EPS of $1.08 and non-GAAP EPS of $1.66 per share. Total revenue reached $94.83 billion, including $69.53 billion from automotive operations and $12.78 billion from the company’s energy generation and storage business. GAAP net income for the year totaled $3.79 billion.
Earnings call updates
The following are live updates from Tesla’s Q4 and FY 2025 earnings call. I will be updating this article in real time, so please keep refreshing the page to view the latest updates on this story.
16:25 CT – Good day to everyone, and welcome to another Tesla earnings call live blog. There’s a lot to unpack from Tesla’s Q4 and FY 2025 update letter, so I’m pretty sure this earnings call will be quite interesting.
16:30 CT – The Q4 and FY 2025 earnings call officially starts. IR exec Travis Axelrod opens the call. Elon and other executives are present.
16:30 CT – Elon makes his opening statement and explains why Tesla changed its mission to “Amazing Abundance.” “With the continued growth of AI and robotics, I think we’re headed towards a future of universal high income,” Musk said, adding that along the way, Tesla will still be improving its products while keeping the environment safe and healthy.
16:34 CT – Elon noted that the first steps for this future are happening this year, thanks to Tesla’s autonomy and robotics programs, which will be launching and ramping this year. He also highlighted that Tesla will be making major investments this year, though the company will be very strategic when it comes to its funding. “I think it makes a ton of strategic sense,” Musk said.
16:36 CT – Elon also announces the end of the Model S and Model X programs “with an honorable discharge.” If you’re interested in buying a Model S or X, it’s best to do it now, Musk said. The Model S and Model X factory in Fremont will be replaced by an Optimus line. “It’s slightly sad, but it is time to bring the S and X program to an end. It’s part of our overall shift to an autonomous future,” Musk said.
16:38 CT – Elon discusses how Unsupervised FSD is now starting for the Robotaxi service. He noted that these Unsupervised Robotaxis don’t have any chase cars as of yesterday. He reiterated Tesla’s plans for owners to be able to add their own vehicles to the Robotaxi fleet. Autonomy target for the end of the year is about a quarter or half of the United States, Musk said.
16:41 CT – Elon noted that the Tesla Energy team is absolutely killing it. He also stated that Tesla expects its Energy business to continue growing, and that the “solar opportunity is underrated.”
16:43 CT –Elon also added that Tesla Optimus 3 will be unveiled in about three months, probably. The Model S and Model X line in Fremont will be a million-unit Optimus production line. Looks like Optimus is really coming out of the gate with large, meaningful volumes. “The normal S curve for manufacturing ramps is longer for Optimus,” Musk stated. “Long term, I think Optimus will have a significant impact on the US GDP.”
16:44 CT – Elon closes his opening statements with a sincere thanks to the Tesla team. He also noted that he feels fortunate to be able to work alongside such a talented workforce.
Elon ends his opening remarks with an optimistic prediction about the future.“The future is more exciting than you can imagine,” he concluded.
16:47 CT – Tesla CFO Vaibhav Taneja makes his opening remarks. He discusses several aspects of Tesla’s Q4 milestones. He noted that Tesla Energy achieved yet another gross profit record during the fourth quarter. There’s insane demand for the Megapack and Powerwall. Backlogs for these products are healthy this 2026. He also noted that Tesla ended 2025 with a bigger vehicle order backlog compared to recent years.
16:53 CT – Investor questions from Say begin. The first question is about Tesla’s expectations for the Robotaxi Network. Lars Moravy noted that it has the advantage of manufacturing and scale, and Tesla believes that the Robotaxi Network will significantly grow year over year. Elon highlighted that the Cybercab will be produced with no steering wheel or pedals. No fallback. Elon also noted that Tesla expects to produce more Cybercabs than all its other vehicles combined in the future.
16:51 CT – The next question is if Tesla still expects to launch new models, such as affordable cars. Lars Moravy noted that Tesla did release affordable variants last year, and Tesla is still pushing hard to lower its costs. That being said, Tesla is really pushing the Cybercab as its total addressable market is larger than consumer-owned cars. Lars also mentioned that Tesla will produce different vehicles for its Robotaxi services.
16:56 CT – Elon noted that eventually, Tesla will produce mostly autonomous cars. The exception would be the next-generation Roadster, which will be a true driver’s car.
17:03 CT – A question about Elon’s past comments about a potential next pickup truck was asked. Lars noted that the Cybertruck is still performing well in the electric pickup truck segment, though Tesla is known for flexibility. Elon added that Tesla will be transitioning the Cybertruck line to a fully autonomous vehicle line. He also stated that the Cybertruck is a useful vehicle. “An autonomous Cybertruck will be useful for that.”
17:10 CT – A question was asked about when FSD will be 100% Unsupervised. Elon noted that 100% Unsupervised FSD is already being used today, though only in the Austin Robotaxi program. Tesla is still being extremely careful with its rollout.
When asked about Tesla’s chip program, Elon noted that he feels pretty good about Tesla’s chip strategy. But in terms of selling Tesla’s chips outside Tesla, the company has to make sure it has enough chips for Optimus robots, data centers, and other programs first.
17:18 CT – Analyst questions begin. First up is Wolf Research. He asks about Tesla’s increasing Capex, specifically where the majority of it is going. The Tesla CFO noted that programs in six factories are going live this year, so that consumes Capex. The Optimus program also consumes a lot of resources. The growth of Tesla’s current capacity is also consuming a lot of resources. As for how these programs will be funded, the CFO pointed to Tesla’s massive war chest, as well as initiatives such as the Robotaxi Network.
17:21 CT – Morgan Stanley asks about Tesla’s xAI investment. The analyst asked about more information about how Tesla and xAI will work together. The CFO noted that this investment is part of Master Plan Part IV. Elon also mentioned some advantages for xAI’s technology for Tesla’s products, like Grok being used to manage a Robotaxi fleet or a group of Optimus robots.
17:24 CT – Barclays asks Elon about the constraints on memory. Does Tesla have any near term constraints for Tesla vehicles’ memory? Elon responded that the Tesla AI computer is already very compute and memory-efficient. The intelligence per gigabyte is important. Musk noted that Tesla is ahead of the industry by an order of magnitude or more.
17:29 CT – Cannacord asks about startups from China entering the humanoid market. What competitive advantage does Optimus have compared to these rivals? Elon stated that he believes China will be a key competitor in the humanoid robot market. China will be the toughest competitor for Tesla. That being said, Elon noted that Tesla believes Optimus will be ahead in real-world intelligence, electromechanical dexterity, and hand design.
News
Tesla announces massive investment into xAI
“On January 16, 2026, Tesla entered into an agreement to invest approximately $2 billion to acquire shares of Series E Preferred Stock of xAI as part of their recent publicly-disclosed financing round,” it said.
Tesla has announced a major development in its ventures outside of electric vehicles, as it confirmed today that it invested $2 billion into xAI on January 16.
The move is significant, as it marks the acquisition of shares of Series E Preferred Stock, executed on market terms alongside other investors. The company officially announced it in its Q4 2025 Shareholder Deck, which was released at market close on Wednesday.
The investment follows shareholder approval in 2025 for potential equity stakes in xAI and echoes SpaceX’s earlier $2 billion contribution to xAI’s $10 billion fundraising round.
Tesla said that, earlier this month, it entered an agreement to invest $2 billion to acquire shares of Series E Preferred Stock of xAI:
“Tesla’s investment was made on market terms consistent with those previously agreed to by other investors in the financing round. As set forth… pic.twitter.com/HgtrcHdB2U
— TESLARATI (@Teslarati) January 28, 2026
CEO Elon Musk, who is behind both companies, is now weaving what appears to be an even tighter ecosystem among his ventures, blending Tesla’s hardware prowess with xAI’s cutting-edge AI models, like Grok.
Tesla confirmed the investment in a statement in its Shareholder Deck:
“On January 16, 2026, Tesla entered into an agreement to invest approximately $2 billion to acquire shares of Series E Preferred Stock of xAI as part of their recent publicly-disclosed financing round. Tesla’s investment was made on market terms consistent with those previously agreed to by other investors in the financing round. As set forth in Master Plan Part IV, Tesla is building products and services that bring AI into the physical world. Meanwhile, xAI is developing leading digital AI products and services, such as its large language model (Grok).”
It continued:
“In that context, and as part of Tesla’s broader strategy under Master Plan Part IV, Tesla and xAI also entered into a framework agreement in connection with the investment. Among other things, the framework agreement builds upon the existing relationship between Tesla and xAI by providing a framework for evaluating potential AI collaborations between the companies. Together, the investment and the related framework agreement are intended to enhance Tesla’s ability to develop and deploy AI products and services into the physical world at scale. This investment is subject to customary regulatory conditions with the expectation to close in Q1’2026.”
The history of the partnership traces back to xAI’s founding in July 2023, as Musk launched the company as a counterweight to dominant AI players like OpenAI and Google.
xAI aimed to “understand the true nature of the universe” through unbiased, truth-seeking AI. Tesla, meanwhile, has long invested in AI for its Full Self-Driving (FSD) software and Optimus robots, training models on vast datasets from its vehicle fleet.
The investment holds profound significance for both companies.
For Tesla, it accelerates its Master Plan Part IV, which envisions AI-driven autonomy in vehicles and humanoid robots. xAI’s Grok could enhance Tesla’s real-world AI applications, from optimizing battery management to predictive maintenance, potentially giving Tesla an edge over its biggest rivals, like Waymo.
Investors, on the other hand, stand to gain from this symbiosis. Tesla Shareholders may see boosted stock value through AI innovations, with analysts projecting enhanced margins and significant future growth in robotics. xAI’s valuation could soar, attracting more capital.
Tesla brings closure to flagship ‘sentimental’ models, Musk confirms
LIVE BLOG: Tesla (TSLA) Q4 and FY 2025 earnings call
