The company began the process on Wednesday morning, starting with staff in Asia.

Workers in Singapore received the first emails at around 4 a.m. local time, while employees in the United States and other regions are expected to hear later in the day.

People familiar with the plans said the notifications will roll out in stages across time zones.

Meta has asked many of those affected to work from home while the process continues. The cuts are part of a restructuring as the company moves more resources into artificial intelligence and reduces costs elsewhere in the business.

The reductions are expected to hit engineering and product teams the most. Some staff were told earlier that further changes could follow later in the year, depending on how the restructuring progresses.

At the same time, Meta has moved about 7,000 employees into newly formed teams focused on AI work, including product development and autonomous systems. The company ended March with just under 80,000 employees before these latest changes took effect.

In an internal memo, Meta’s Head of People, Janelle Gale, said the company is moving towards a flatter structure.

“We’re now at the stage where many orgs can operate with a flatter structure with smaller teams of pods/cohorts that can move faster and with more ownership.”

“We believe this will make us more productive and make the work more rewarding,” she said.

Chief Executive Officer Mark Zuckerberg has made artificial intelligence the company’s main priority.

Meta has committed more than $100 billion in capital spending this year on AI infrastructure and related projects, as it tries to keep pace with competitors including Google and OpenAI.

The company has already carried out several rounds of layoffs in recent years as part of an efficiency stimulation. It has also encouraged staff to use AI tools in daily work, including coding and internal systems automation.

Inside the company, the changes have created unease. Some employees have complained about job security and the direction of internal AI projects.

More than 1,000 staff members signed a petition asking the company to avoid extensive data collection from employee devices for AI training, including inputs such as keystrokes, mouse movement and screen activity.

“Automators like Meta risk no longer being an employer of choice as it’s being revealed that they will cut out the human when the opportunity presents itself,” said Jan-Emmanuel De Neve, professor of economics and behavioural science at University of Oxford.

“Doing so might well lead to short-term cost savings but risks longer-term growth potential by undermining employee wellbeing and engagement.”

Investor considerations have also grown around the scale of Meta’s AI spending and whether it will deliver returns.

While the company describes the job cuts as a way to offset the cost of its AI expansion and restructuring, analysts at Evercore estimate the layoffs could generate about $3 billion in savings for Meta.

That figure is small compared with its bigger investment plans, and capital expenditure could reach about $145 billion this year, with expectations of further heavy spending on AI infrastructure over the coming years.

The company announced the move on Wednesday during the ATx Summit in Singapore, where it also launched “OpenAI for Singapore”, a partnership with the country’s Ministry of Digital Development and Information (MDDI).

Under the initiative, OpenAI said it will commit more than S$300 million to Singapore and create about 200 technical roles over the next few years.

The company added that Singapore will become one of its global bases for Forward-Deployed Engineers, teams that work directly with businesses and public institutions to deploy AI systems.

The new lab will support projects tied to Singapore’s national AI priorities, especially in public services, healthcare, finance and digital infrastructure.

Denise Dresser, chief revenue officer at OpenAI, said the company sees Singapore as a key market because of its technical talent and long-term AI ambitions.

“We’re excited to partner with Singapore as it builds on its position as a global leader in AI,” she said.

“Singapore has strong technical talent, trusted institutions, and a clear ambition to use AI to drive long-term growth and improve people’s lives.”

She added: “Through OpenAI for Singapore, we want to help more organisations benefit from frontier AI, support the next generation of local AI talent, and widen access to these tools across the country.”

Singapore has spent the past few years positioning itself as a neutral and trusted centre for AI development in Asia. The government has steadily increased spending on AI research and infrastructure while encouraging global technology firms to expand operations in the country.

Authorities earlier pledged S$1 billion between 2025 and 2030 to strengthen public AI research capabilities. Tech giants including Google, Nvidia, AWS and Microsoft have also announced AI-related investments and partnerships in Singapore.

Alongside the OpenAI AI Lab deal, Singapore recently unveiled a National AI Partnership with Google focused on education, healthcare and enterprise innovation. Nvidia is also establishing a new AI research lab in the country to work with universities and government agencies.

The partnership with OpenAI will also include education and workforce programmes. OpenAI said it plans to work with Singapore’s Ministry of Education and GovTech on AI-powered learning tools, including support for Mother Tongue language learning.

The company will also launch a Singapore chapter of the OpenAI Academy, organise Codex hackathons for teachers and introduce a training programme for Forward-Deployed Engineers.

Singapore’s Permanent Secretary for Digital Development and Information, Chng Kai Fong, said the partnership shows the government’s drive to prepare its workforce and economy for AI adoption.

“With AI reshaping economies, businesses and the workforce, Singapore’s response has been deliberate: growing new sectors, anchoring global frontier companies here, and equipping our people with the skills to thrive in this new environment,” he said.

“This partnership with OpenAI reflects the Government’s commitment to developing Singapore’s AI capabilities, strengthening enterprise adoption of AI, and securing good jobs for Singaporeans.”

OpenAI said it also plans to support smaller businesses and startups through workshops, accelerator programmes and practical AI adoption initiatives.

Countries are currently competing to attract AI investment, talent and infrastructure. Singapore is not left out, standing alongside hubs such as London, Dubai and Silicon Valley to lead AI development.

Recent data from Slack’s Workforce Index showed that about 52% of workers in Singapore already use AI tools in their jobs, underlining how quickly adoption is spreading across the country’s economy.

The Japanese investment company had originally aimed to secure a $10 billion margin loan backed by its OpenAI holdings.

However, discussions with banks and other potential lenders have recently shifted towards a smaller deal that could fall to about $6 billion, according to people familiar with the talks.

The loan is still under discussion and the final size could still change.

Lenders reportedly became cautious because OpenAI is privately owned, making it harder to determine a stable market value for the company.

Although OpenAI was recently valued at around $852 billion in a funding round earlier this year, creditors are wary about using unlisted shares as collateral for such a large borrowing arrangement.

A margin loan allows investors to borrow money against the value of assets they already own. In this case, SoftBank planned to use its OpenAI stake to secure the financing.

The proposed loan would run for two years, with an option to extend it by another year. Reports earlier this year also said the borrowing could carry an interest rate tied to SOFR plus 425 basis points, pushing costs close to 8%.

That is significantly higher than standard corporate lending rates and reflects the risks lenders see in the structure.

SoftBank has increased its financial exposure to OpenAI over the past two years. The company first invested in the ChatGPT maker in September 2024 and later expanded the partnership through Stargate, a large artificial intelligence infrastructure project launched in the United States in January 2025.

In March this year, SoftBank also secured a separate $40 billion bridge loan backed by major banks including JPMorgan and Goldman Sachs.

The company said the funding would support OpenAI investments and broader corporate operations.

Analysts estimate SoftBank’s total investment commitment to OpenAI could eventually reach about $64.6 billion, giving the group roughly a 13% in the company.

At the same time, some analysts believe SoftBank faces a financing gap of around $32 billion over the next two years.

To raise cash, the company has already sold several major assets. In 2025, SoftBank exited its Nvidia position for about $5.8 billion and also sold T-Mobile shares valued at roughly $12.7 billion.

Credit rating agency S&P recently revised SoftBank’s outlook to negative while keeping its BB+ rating, pointing to the company’s debt exposure and aggressive borrowing strategy.

Neither SoftBank nor OpenAI immediately responded to requests for comment following the latest reports on the loan discussions.

The company, led by Masayoshi Son, is strengthening its focus on artificial intelligence as competition increases among global tech firms.

This is SoftBank’s largest borrowing in US dollars. The loan is unsecured and will mature in March 2027. It was arranged by major lenders including JPMorgan Chase, Goldman Sachs, Mizuho Bank, Sumitomo Mitsui Banking Corp and MUFG Bank.

SoftBank said the funds will partly support its existing commitment to OpenAI. The group had earlier agreed to invest $30 billion in the company through its Vision Fund 2. Some of the loan will also go towards general operations, with plans to repay part of it through asset sales.

After years of mixed results from large bets on companies like Uber and WeWork, Son is now focusing heavily on AI.

OpenAI, backed by Microsoft, has become one of the most influential players in the sector following the rapid adoption of ChatGPT. That surge has drawn fresh capital into the industry and raised the stakes for investors.

SoftBank is also working with OpenAI on the Stargate Project, an initiative announced in 2025 to invest up to $500 billion over four years in AI infrastructure in the United States.

Earlier, in December 2024, Son and then President-elect Donald Trump said SoftBank would invest $100 billion in AI and related infrastructure in the US over the same period.

The scale of this new loan shows how far SoftBank is willing to go. Even with a heavy debt load, the group is placing itself at the centre of the global AI growth, where companies such as Microsoft, Google and Amazon are all expanding their chances.

A source familiar with the matter said the job cuts were carried out on Wednesday and affected units including Reality Labs, social media teams and recruiting.

The scale is smaller than earlier plans, but it follows internal discussions about deeper reductions.

Earlier in the month, Reuters reported that Meta had considered larger layoffs that could affect 20% or more of its workforce. Those plans have not been fully carried out, but they are still part of longer-term restructuring discuss.

In a statement, a Meta spokesperson said, “Teams across Meta regularly restructure or implement changes to ensure they’re in the best position to achieve their goals. Where possible, we are finding other opportunities for employees whose positions may be impacted.”

The company employed nearly 79,000 people as of December 31, according to its latest annual filing.

With these changes tied to high costs, Meta is increasing spending on artificial intelligence (AI), with total expenses projected at between $162 billion and $169 billion in 2026.

A large share of that budget will go into data centres, computing infrastructure and hiring specialised talent.

At the same time, the company is cutting back in areas that no longer sit at the centre of its plans. Reality Labs, which focuses on augmented and virtual reality, has recorded heavy losses in recent years.

Reports put those losses at about $16 billion between 2023 and 2025.

Now, attention has shifted, and Chief Executive Mark Zuckerberg has placed artificial intelligence at the core of the business, reducing the weight previously given to AR and VR projects.

The latest layoffs also touch sales, global operations and other support roles, according to earlier reports. Some affected employees, especially outside the United States, have been offered options to move into other roles or locations.

Meta is not alone in this direction. Other large technology companies have made similar decisions, cutting jobs in hardware and cloud units while increasing investment in AI.

Global liquidity still runs through the dollar, and Nigeria cannot ignore this. Higher U.S. yields make it difficult for emerging markets to attract short-term capital. They also strengthen the dollar, which feeds directly into imported inflation and complicates exchange rate management.

For an economy that depends heavily on oil exports priced in dollars, the relationship is more complex. Stronger oil prices help Nigeria’s external reserves, however, if global dollar liquidity gets tougher at the same time, those improvements can be offset by capital outflows or currency instability.

At the same time, global oil markets are pricing in supply risk. Brent crude has climbed to around $72–$73 per barrel, its highest in about seven months, as geopolitical stresses escalate in the Middle East. 

Meanwhile, equity indices have shown intermittent volatility but are still resilient. The S&P 500 hovered close to the 6,900 area in late February. 

Taken together, these developments show how markets are balancing monetary conditions, spending patterns, and energy risk in early 2026.

Liquidity: Tougher Than in the Past, But Not Restrictive

A balance sheet of roughly $6.61 trillion confirms that policy is no longer in emergency mode, but still large by longer‑term historical standards. 

Interest rates are higher than a few years ago, and the Federal Reserve has been gradually reducing the amount of securities it holds. But that reduction has slowed, and the level of reserves in the system has not fallen far enough to scrape out market liquidity entirely.

Investors are still willing to take risks. Credit spreads have not blown out, and volatility measures like VIX have stayed below crisis levels. Even assets that trade with higher risk premia, such as cryptocurrencies, have seen renewed institutional interest recently.

This dynamic points to a market that seems comfortable with current monetary conditions, even if official policy rates are still restrictive. Expectations of future rate cuts are part of the reason, with markets usually pricing in expected easing well before central banks act.

A huge risk is if inflation proves stickier than expected, the monetary easing investors currently price in may be delayed or even reversed. That would raise yields further and tighten financial conditions more than most anticipate.

Technology Investment: Strong Now, But Not Broad‑Based

Corporate investment in technology infrastructure, especially for advanced computing and data processing, is still a major driver of market and sector performance.

A small group of large technology companies are at the centre of this trend. Their capital expenditure plans, particularly in areas tied to machine learning and cloud infrastructure, have supported earnings growth and aggregate market valuation.

The concentration of earnings in a handful of large firms has lifted headline equity indices. This creates a situation where market performance depends heavily on a narrow segment of the economy.

Outside those core technology firms, earnings growth has been more muted. That is of concern because when valuations are concentrated at the top, any disappointment from those leading firms can ripple quickly across markets.

There is also a link between technology investments and energy consumption. Large data centres require significant power. With tech capex increasing, so is demand for reliable energy supply, connecting the narrative directly to trends in energy markets.

Oil Prices: The Risk That Could Shift the Macro Balance

Globally, prices of oil have increased to levels not seen for months. Brent crude climbing into the low $70s per barrel shows supply risk priced into markets due to geopolitical tensions in the Gulf region. 

Recent military action involving the United States and Israel has boosted concerns about supply disruption through the Strait of Hormuz, a critical artery for global oil flows. Markets responded, pushing prices higher on the expectation of risk rather than actual physical cuts to supply. 

Reports have even suggested that if firm disruptions occur, Brent could rise towards $80 per barrel, although this is far from certain. 

Higher oil prices feed into consumer and producer cost structures. Transport is expensive, fertiliser and agricultural input prices are high and that can keep inflation elevated even when core goods are subdued. Central banks, monitoring inflation closely, will respond to these challenges.

For oil‑exporting nations, stronger prices support foreign exchange revenues and fiscal positions. For oil importers, the opposite is true, energy costs can squeeze budgets and slow growth.

How These Forces Interact

These three forces, liquidity situations, concentrated technology investment, and expensive energy prices, are not independent.

• If prices of oil continue to increase and push inflation expectations higher, bond yields could increase too. Higher yields tighten monetary requirements even without changes in central bank policy.
• If tech investment slows or earnings disappoint, markets that rely on a narrow base of corporate profits could see more weakness.
• If financial situations get tougher unexpectedly, credit spreads could widen, reducing risk appetite.

Market stability today depends on these forces staying in relative balance. A shift in one can ensure movements in the others.

What to Watch This Week

As we begin March, these indicators are essential:

• Official inflation data from major economies
• Treasury auction results and changes in bond yields
• Weekly oil inventory reports and OPEC+ announcements
• Corporate earnings guidance on capex spending
• Credit market stress indicators such as high‑yield spreads

Small changes in these indicators can influence market expectations.

Liquidity is tougher than in the years following the pandemic, but it has not withdrawn. Technology investment is supporting markets, albeit in a concentrated manner. Oil prices are growing as geopolitical risk premiums increase.

None of these forces alone ends a bull market or derails growth projections. But together, they influence the conditions that markets are currently pricing.

The important focus this Monday is not whether markets will rise or fall, but how these three forces, liquidity, AI and Oil, interact going forward.

Now among the world’s most valuable private technology firms, the company confirmed the round on Thursday, saying investors including D. E. Shaw Ventures, ICONIQ and MGX co-led the deal. 

Microsoft and Nvidia also took part, adding to their existing investments. Singapore’s sovereign wealth fund GIC and Coatue Management were among the lead backers in what the company described as its Series G round. 

Other investors included Founders Fund, Qatar Investment Authority, Accel, General Catalyst and Jane Street.

With this latest raise, Anthropic’s total funding since it was founded now exceeds $57 billion. The Series G deal ranks among the largest private technology financings on record, second only to OpenAI’s $40 billion raise in 2025.

Anthropic said its annualised revenue has reached $14 billion. Its coding-focused product, Claude Code, accounts for more than $2.5 billion of that figure. The company said revenue from Claude Code has more than doubled since the start of 2026.

Business demand is growing. Subscriptions to Claude Code from companies have quadrupled this year. Enterprise clients now generate more than half of the product’s revenue, according to the company.

Anthropic has built much of its strategy around tools for developers and office workers. Its Claude Cowork agent carries out computer-based tasks for white-collar staff. 

The release of plugins for the agent unsettled parts of the software market, as investors weighed the possible impact of automation on traditional software providers.

The funding places Anthropic closer to its main competitor, OpenAI. In January OpenAI was in talks with SoftBank Group to raise as much as $30 billion more, in a deal that could value the company at about $830 billion.

Microsoft and Nvidia have now backed both companies, strengthening their positions as key suppliers of computing power to the artificial intelligence sector. Anthropic also counts Google and Amazon among its earlier supporters.

On regulation, Anthropic has taken a different line from many technology firms. The company has pledged $20 million to support U.S. political candidates who favour stronger oversight of artificial intelligence.

Earlier on Thursday, the company said: “The companies building AI have a responsibility to help ensure the technology serves the public good, not just their own interests.”

Chief executive Dario Amodei repeated that position at the World Economic Forum in Davos in January 2026, where he said artificial intelligence companies must ensure their technology benefits society as a whole.

Blackstone, the world’s largest alternative asset manager, is also increasing its stake in Anthropic to about $1 billion, Reuters reported earlier this week.

This is its fourth straight quarterly increase, with earnings boosted by the value of its investment in OpenAI. 

SoftBank has invested more than $30 billion, holding 11% of the AI firm. By the end of December, it expects total profits from this investment to reach $19.8 billion.

OpenAI is reportedly preparing a new funding round, valued at $830 billion and SoftBank may invest an additional $30 billion alongside Amazon and Nvidia. 

Analysts warn that the conglomerate is now being seen as a publicly traded proxy for OpenAI.

To fund its investments, SoftBank sold parts of its holdings in Nvidia and T-Mobile, raised bonds, and also borrowed against other holdings such as chip designer Arm and its domestic telecom unit, SoftBank Corp. 

The company’s loan-to-value ratio rose to 20.6% in December, up from 16.5% three months earlier. Cash reserves fell to ¥3.8 trillion over the same period.

Masayoshi Son, SoftBank founder and CEO, directly owns 17% of Vision Fund 2, the investment vehicle holding the OpenAI stake. The fund recorded $2.4 billion in valuation profits from OpenAI in the quarter, adding to cumulative profits of $19.8 billion over nine months.

SoftBank’s shares rose 2.4% on the day of the earnings release, slightly ahead of a flat market. The results reveal the company’s heavy focus on AI, showing both the possible rewards and the risks of concentrating investments in a single firm.

But the thing is, capital wasn’t just flowing. There was a concentration, with large checks, especially for artificial intelligence companies. 

About 74% of January funding went to deals of $100 million or more, and 57% went to AI-related startups alone. 

However, if you stood back and looked at markets and capital flows in early 2026, you’d see something quite different, fundamental change. 

Tech isn’t responding to an upswing in funding anymore. It’s adapting to new investor priorities, and market situations that are very different from the era of easy capital that impacted the late 2010s and early 2020s.

So what changed?

For most of the past decade, cheap money allowed tech growth, interest rates in certain economies were at historical lows, investors hungry for yield and growth poured capital into startups before they had profit, let alone profits. 

Risk was quite blurry during that era, valuations were amplified and growth at all costs was made workable, if fragile, a strategy.

Today, it doesn’t work that way anymore.

Interest rates globally are higher than they’ve been for years. Monetary policy became tougher after pandemic stimulus faded, inflation returned in many regions, and central banks moved quickly to raise rates to rein in prices. 

That made capital more expensive and investors much pickier.

Funding isn’t gone, it’s just concentrated

Despite the narrative of a “funding winter,” KPMG’s latest data shows global VC investment hit more than $138 billion in the fourth quarter of 2025, ending the year with one of the strongest totals on record. 

But that masks an important trend where capital isn’t broadly distributed anymore. Investors are placing large investments on a narrow set of opportunities.

Take AI. It wasn’t just one sector among many. In 2025, AI startups drew outsized rounds, dozens of companies raised hundreds of millions, or even billion-dollar-plus investments. 

The funds aren’t trickling down to every idea with a good pitch. They’re clustering around a few big names and high-conviction focus.

That shift is unignorable. It means the cost of money isn’t just higher, the bar for attracting it is, too.

A tale of two tech markets

Investors are talking about discipline, transparency, and profitability. According to a global investor survey, 61% of investors still see technology as the top sector for capital growth over the next few years, but they want transparent disclosures about strategy and returns, especially around AI. 

In the first week of February 2026, global indexes experienced turbulence as software and tech stocks were sold off. Valuations slipped due to investor anxiety over whether heavy AI spending by big tech firms, think multibillion-dollar capex plans, will translate to profit. 

Big names like Alphabet and Microsoft have seen their stock prices fluctuate at times because markets are questioning the returns on massive AI investments outweighing near-term costs.

At the same time, alternative corners of tech are attracting fresh interest. There’s a noticeable shift toward smaller-cap and value-oriented companies as investors rotate out of speculative growth names and into sectors they deem safer or more resilient. 

Layoffs and recalibration

Again, looking at the workforce, 2025 saw a large number of layoffs in the tech industry, from startups to giants. 

Thousands of jobs were cut as companies recalibrated their cost structures and refocused priorities. Those layoffs reveal the stress on growth models that relied on scale and user acquisition over cash flow and efficiency.

For founders, this has been painful and humbling. People who raised capital on promises of growth now find investors demanding sharper unit economics and quicker paths to profit.

That’s not a backlash against innovation but a higher level of financial discipline driven by macro conditions.

Where tech still finds money

Despite all of this, there are good areas.

AI commands attention. There were more than 55 U.S. AI startups raising $100 million or more in 2025 alone, showing that deep technology with good enterprise value still attracts serious capital. 

These are not small checks but major commitments by major investors.

Even beyond AI, the VC world saw robust exit activity, mergers and acquisitions and IPOs contributed to healthy exit values as companies matured and found liquidity. 

And while data from regional ecosystems varies, many markets are resilient. In Africa, for example, funding rebounded strongly in 2025, with total capital rising and diversified instruments, including debt, playing a bigger part. 

The reality for most founders

So what does this all mean for tech founders and executives?

For one, the era of ‘raise more at any cost’ is clearly over. Investors are looking for companies that can articulate solid paths to cash flow and sustainable growth. They care about what you do with capital, not just how fast you can spend it.

Second, capital is still available, but it’s more selective. AI and related infrastructure are prime targets, but other sectors must prove strong business models to win larger commitments.

Third, the shift isn’t a simple downturn but a reset. Tech is learning to grow within macro challenges. That’s a healthier paradigm in the long term, even if it seems harsher in the short term.

Some founders feel blindsided because they raised a comfortable round only to find subsequent meetings turning into critiques of burn rates and go-to-market strategy. That is real, but it’s also a reflection of markets that now price risk differently.

Tech hasn’t lost its spark, far from it. Funding is still high, deals continue to get done, and innovation is very much alive. 

What has changed is the price of patience, clarity and discipline. Cheap money didn’t just drive ideas, it impacted expectations, which should ultimately lead to tech growth.

Now those expectations are adjusting to a world where capital is not easy money. It’s selective, expensive and demanding.

And that is important, because founders today must build fast, and build wisely.

The investment, announced alongside Tesla’s latest results, comes with assurances that production plans for the long-promised Cybercab robotaxi remain on course. 

After years of missed timelines, Tesla is asking the market not to judge it on car sales but also on whether its self-driving vision finally turns into a working business.

This will not come cheap as Chief Financial Officer Vaibhav Taneja said capital expenditure would climb beyond $20 billion this year, more than twice the $8.5 billion spent in 2025, as Tesla expands factories and builds the computing backbone needed for autonomy, robotics and new vehicles. 

Shares initially jumped in after-hours trading before easing back as the scale of the spending became clear.

Tesla wants investors to back future revenue from software, robotaxis and humanoid robots at a time when its core electric vehicle business is under pressure. 

Competition has increased, prices have fallen, and a key US tax incentive for EV buyers has ended. Revenue slipped about 3% last year to roughly $94.8 billion, the first annual decline in Tesla’s history.

On a conference call, Musk acknowledged the transition and again pressed the case for autonomy as Tesla’s defining metric. Analysts agree that the focus has shifted. “(That) makes rollout metrics – not deliveries – the most important leading indicator from here,” said Thomas Monteiro, senior analyst at Investing.com.

Tesla says it is already running a limited driverless robotaxi service in Austin, Texas, using Model Y vehicles equipped with its Full Self-Driving software. The Cybercab, designed without a steering wheel or pedals, is meant to scale that effort. 

Musk said he expects fully autonomous vehicles to operate across a large part of the United States by the end of the year, though he has previously set and missed similar targets.

On regulations, vehicles without traditional management do not fit current federal safety standards, and Tesla has not provided firm dates for approval or widespread unsupervised deployment. Even so, the company insists Cybercabs will be added to its robotaxi network and sold to consumers once production begins.

The spending surge will also fund projects that have sat on Tesla’s roadmap for years, including the Optimus humanoid robot, the Semi truck and the Roadster sports car. 

Musk warned that early production of both Cybercab and Optimus would be slow, saying last week it would be “agonisingly slow” before accelerating. On Wednesday, he said Tesla does not expect meaningful Optimus volumes until late 2026.

There are supply risks as well. Musk cautioned that a global shortage of memory chips could limit Tesla’s ambitions as demand from large technology firms soaks up capacity for data centres. 

He floated the idea of building a chip plant to protect the company. “If we don’t do that, we’re just going to be fundamentally limited by supply chain,” he said. “In a worst-case geopolitical situation, it would be quite a severe situation.”

While the car business faces challenges, one division is performing strongly. Tesla’s energy generation and storage unit posted record revenue of $3.84 billion in the fourth quarter, up 25.5% from a year earlier, driven by demand for grid-scale batteries that support renewable power and stabilise electricity networks. That growth has become a bright spot as vehicle margins are squeezed.

Financially, adjusted earnings per share beat expectations in the fourth quarter, but net income fell 61% to $840 million. Automotive gross margins, excluding regulatory credits, improved to 17.9%, well above forecasts. 

To protect volumes, Tesla has leaned heavily on discounts and cheaper versions of its best-selling models, and Wall Street expects deliveries to rise modestly to about 1.77 million vehicles this year.

Some investors are enthusiastic about the pivot. “With Tesla’s legacy EV business slowing, Tesla investors can take part in the scorching hot AI boom,” said Andrew Rocco, a stock strategist at Zacks Investment Research.