Tesla's $5 billion capex cut is not an AI warning, says Dan Ives

Tesla's quick reversal on capex — raising guidance by $5 billion to $25 billion three months ago, then cutting it by $5 billion to $20 billion this week — landed in a market already on edge about AI spending. Thursday's selloff saw the Nasdaq Composite fall nearly 2.6%, its worst single-day drop since June, while Meta posted negative free cash flow for the first time since 2012 and said it would issue a new tranche of stock to fund its AI buildout. Crude oil spiking above $112 a barrel on geopolitical tensions with Iran added to the gloom. Against that backdrop, Dan Ives argues the Tesla cut is being mislabeled as the first hyperscaler capex cut. His reasoning: Tesla has no cloud to sell and no contracted capacity to walk away from, and the cut ties more closely to challenges making Optimus humanoid robots. Ives also points to Tesla's full-year capex coming in well below expectations, turning an expected cash outflow into positive free cash flow, with FSD attach, subscriptions, backlog and Megapack orders all moving the right way — suggesting the core business is funding the autonomy and robotics build rather than signaling an AI pullback.