Musk’s electric car company says it will invest $2 billion in artificial intelligence start-ups as part of a pivot away from the auto market.
Published on January 29, 2026
Tesla reported its first-ever decline in annual revenue on a busy day for corporate earnings that also saw results from Microsoft, Meta and Samsung Electronics.
Elon Musk’s electric car company said on Wednesday that revenue in the final quarter of 2025 fell 3 per cent year-on-year to $24.9bn. Full year 2025 revenue was $94.8bn, down from $97.7bn last year.
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Net profit fell 61 per cent to $840m in the quarter, taking profit for the year to $3.8bn, down sharply from $7.1bn in 2024.
The Austin, Texas-based company also revealed it had agreed to invest $2bn in Musk’s artificial intelligence start-up xAI – developer of Musk’s controversial Grok chatbot – as part of efforts to reduce its dependence on the auto market.
“Together, the investment and related framework agreement are intended to enhance Tesla’s ability to develop and deploy AI products and services in the physical world,” the company said in its earnings report.
Shares of Tesla rose about 2.2 percent in after-hours trading.
Also on Wednesday, tech giants Microsoft, Meta and Samsung reported strong earnings in their latest reports to shareholders.
Meta, the parent company of Facebook and Instagram, reported a profit of $22.8bn on revenue of $59.9bn in the October-December period, up 6 per cent year-on-year.
Meta shares rose nearly 7 percent in extended-hours trading.
Microsoft said profit rose 60 per cent to $38.5bn in the final quarter, based on revenue of $81.3bn.
Microsoft CEO Satya Nadella said in a statement, “We’re only in the early stages of AI diffusion, and Microsoft has already built an AI business that’s bigger than some of our biggest franchises.
“We are pushing the boundaries across our entire AI stack to achieve new value for our customers and partners.”
Despite strong earnings, Microsoft’s announcement that capital spending reached a record $37.5bn in the second quarter sparked fears of an AI investment bubble, sending stock prices sharply lower.
Microsoft shares fell more than 6 percent in after-hours trading on Wednesday.
Samsung Electronics, the world’s largest maker of memory chips, reported a profit of 20.1 trillion won ($13.98bn) on revenue of 93.8 trillion won ($65.6bn), more than three times the previous year.