In the latest example of Elon Musk betting his business empire’s future on the AI race, Tesla has quietly struck a deal to acquire a mystery AI hardware company for up to $2 billion.
Electrek first reported that Tesla disclosed the deal in a single sentence buried deep in a recent securities filing.
“In April 2026, the Company entered into an agreement to acquire an AI hardware company for up to $2.00 billion in Tesla common stock and equity awards, of which approximately $1.8 billion is subject to certain service conditions and/or performance milestones dependent on the successful deployment of the company’s technology,” Tesla disclosed in a 10-Q filing for the first quarter of 2026.
The filing doesn’t name the company or describe what it actually does. But the structure of the deal provides some clues. Electrek notes that the heavy emphasis on performance milestones suggests the target may have promising but still unproven tech. It also hints that Tesla may be looking to acquire a team as much as a product, using stock incentives to retain talent.
The timing of the deal also points to the possibility that the acquisition is related to chips. Earlier this month, Musk said on X that Tesla had completed the tape-out of its next-generation AI5 self-driving chip, the final stage before sending the design to a foundry for manufacturing. Intel also announced this month that it is joining Terafab, a planned semiconductor manufacturing venture backed by Musk’s companies Tesla, SpaceX, and xAI.
Tesla did not immediately respond to a request for comment from Gizmodo.
The acquisition arrives as Musk increasingly aligns his companies around AI, which SpaceX is pitching as a massive business opportunity.
SpaceX, which recently acquired xAI, is already putting a massive number on that bet. Reuters reports the company’s IPO filing estimates the rocket company has a $28.5 trillion total addressable market, with roughly $26.5 trillion expected to come from AI alone. An absolutely mind-boggling figure that frankly seems detached from reality.
On Tesla’s side, Musk told investors this week that the company plans to raise its capital expenditures to about $25 billion this year, with a significant portion going toward AI initiatives. For comparison, Tesla spent about $8.5 billion last year.
The pivot is also showing up in Tesla’s core business. Earlier this year, Musk told investors in an earnings call that the company is pulling the plug on its Model S and Model X EVs.
“We expect to wind down S and X production next quarter and basically stop production,” Musk said on the call. “That is slightly sad, but it’s time to bring the S and X programs to an end, and it’s part of our overall shift to an autonomous future.”
The move appears to be part of Tesla’s broader effort to free up space at its Fremont, California, facility as it pushes ahead with plans to manufacture autonomous robots.
