Tesla just increased its capex to $25B. Here’s where the money is going.

Tesla is tripling its annual capital expenditure to $25 billion in 2026, reflecting an industry-wide acceleration in AI and infrastructure investment alongside competitors like Amazon ($200B) and Google ($175-185B). This massive capex increase—spanning AI compute infrastructure, chip design, manufacturing facilities, and robotics—signals a fundamental business model transformation that will temporarily reduce free cash flow but positions Tesla for long-term revenue growth in AI and robotics markets. For IT leaders, this underscores the competitive necessity to significantly scale infrastructure investments in AI, data centers, and computational capacity, as technology infrastructure has become central to competitive differentiation and shareholder expectations.