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GM’s Mary Barra stands by Cruise’s cautious strategy amid Tesla’s full self-driving push
A recent interview with GM CEO Mary Barra from Axios has provided some of the executive’s insights about full self-driving solutions, competition from Tesla, and the Detroit-based company’s strategy for the deployment of its autonomous driving tech. Barra proved conservative, emphasizing that GM will not deploy its full self-driving suite until it is safer than a human driver.
The emergence of full self-driving technologies is all but inevitable at this point, with companies such as Waymo and electric car makers such as Tesla actively pursuing the development and refinement of autonomous driving solutions. Among the industry’s players, Tesla appears to have the momentum, as the company has the largest amount of real-world driving data gathered from hundreds of thousands of vehicles currently on the road. Augmented by the rollout of Tesla’s custom self-driving computer, Elon Musk has been optimistic with the company’s full self-driving rollout plans. Musk has stated that the company’s FSD suite will be “feature complete” by the end of 2019, and that it will have around a million vehicles capable of being used as autonomous “robotaxis” next year.
When asked by the publication about the competition from Tesla and if it is essential for a company to be the first to deploy an autonomous driving system, the GM CEO response was cautious. “We want to be safe. And so that’s what’s motivating us. We understand this is life-changing technology,” Barra said, later adding that “there are so many different ways that we can improve our customers’ lives by having this technology, not only from a safety, but from a productivity (standpoint), what they can do. But what they do, we want to make sure they do safely.”
Barra’s rather conservative statements in her recent interview feature a rather different tone than her previous forecasts for GM’s full self-driving solutions. Speaking at the Dealbook conference last November, Barra stated that GM was on schedule to deploy its full self-driving technology in 2019. “We’re on track, with our rate of learning, to be able to do that next year,” she said. During her segment, Barra noted that GM had a strategy to show that its vehicles are safer than human drivers. She also mentioned that GM Cruise’s autonomous cars were already capable of running safely at around 30 mph, though the service was limited to a small area.
GM eventually softened its stance on its 2019 target release. In a statement to The Detroit News in April, GM noted that Cruise’s driverless taxi service would be “gated by safety” when it goes get deployed. A report from The Information published this June also suggested that in April, GM Cruise’s full self-driving technology experienced a massive failure in the presence of Honda Motor CEO Takahiro Hachigo, a major investor in the company. During the demo, the vehicle’s autonomous driving system reportedly stopped, forcing the car’s backup driver to take control. The vehicle then refused to reactivate, forcing the Honda CEO to wait until he was picked up by an operational GM Cruise autonomous car.
Amidst these reports, Barra did not commit to a launch date for the company’s driverless vehicle service. Nevertheless, in her Axios interview, Barra stated that she does not regret the company’s aggressive 2019 target. “It’s a rallying cry. And I think it’s been motivational,” she said.
While GM Cruise might have less real-world miles compared to Tesla and Waymo, the self-driving unit of the Detroit-based carmaker has attracted a notable number of investors nonetheless. In its latest fundraising round alone, GM Cruise was valued at $19 billion on its own. That’s quite impressive, considering the company’s progress with its technology so far. Tesla, on the other hand, is valued at $39 billion as of writing, and that covers the company’s electric vehicle and energy storage business, as well as its full self-driving technology. This was addressed in a previous note from Morgan Stanley analyst Adam Jonas, who noted that TSLA investors are “undervaluing” the company’s autonomous driving systems. “We believe investors underappreciate/undervalue Tesla’s Autonomy business. Many investors to whom we speak do not explicitly include Tesla’s Autonomy business in their valuation of the company,” Jonas said.
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Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Tesla has one big financial question to answer for investors: Morgan Stanley
