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Tesla Bets Heavy on AI as Crypto Investments Fail to Succeed

Tesla holds onto Bitcoin, ramps up AI investments, and misses Q3 earnings expectations, with Model S and X's European return aiming to boost future deliveries.

Tesla goes in heavy on AI as its crypto investments sour.
Credit: mundissima/Shutterstock. Copyright: 2021.

AUSTIN, TX – In its recent Q3 2023 shareholder deck, Tesla has reaffirmed its commitment to both cryptocurrency and AI. According to the deck, the company still maintains its Bitcoin holdings and intensifies investments in AI. At the same time, its Q3 earnings miss expectations, partly due to price cuts on Model S and X electric vehicles, with the return of these models to the European market expected to aid future deliveries.

Tesla Holds Steady

The electric vehicle giant continues to hold its bitcoin balance, despite earlier sales and price fluctuations. Tesla initially invested $1.5 billion in bitcoin in 2021, but most of it was sold in 2022. As of September 30, 2023, the company reported $184 million in digital assets, primarily composed of bitcoin. The shareholder deck stated:

"While our bitcoin holdings remain consistent, we are strategically focusing on artificial intelligence, which plays a pivotal role in our ongoing projects,"

Tesla is channeling its resources into AI development, doubling the size of its AI training compute infrastructure. The company's AI efforts are evident in its Optimus robot project, where humanoid robots are being trained to perform tasks through AI, rather than traditional hard-coded software. Furthermore, Tesla is continually enhancing the robot's hardware capabilities to handle increasingly complex datasets.

Tesla's Crypto and AI Investments

Despite Tesla's significant AI investments, the company reported underwhelming financial results in Q3. Earnings per share (ESP) fell short of expectations, dropping from the anticipated 0.73 to 0.66. While the total revenue grew slightly to $23.4 billion, it was negatively impacted by recent price reductions in its Model S and X electric vehicles (EVs), resulting in a 14% drop in deliveries.

Tesla's Europe sales forecast manager at GlobalData, Sammy Chan, explained that the price cuts on these models affected the company's revenue. However, he pointed out that Tesla's flexibility in pricing allowed it to adapt more quickly than its competitors.

The return of the Model S and X to the European market is seen as a positive development. Chan predicts that this move will help alleviate supply and production bottlenecks globally, potentially boosting Tesla's deliveries in 2024.


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