AI Spending, Mobileye's CEO Exit & IBM CEO on Results

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech, coming up, the AI spending race is ramping up with Alphabet boosting its investment plans while Tesla is burning through cash to fund Elon Musk's AI ambitions. Plus Mobileye founder and CEO, Amnon Shashua, will be stepping down after 27 years. He joins us for an exclusive interview to explain why. And we speak with IBM CEO Arvind Krishna after a steep drop in mainframe sales weighed on the company's results. This is a technology earning story about AI spending. How much, how fast, with what returns? We're looking at Alphabet, the parent of Google. We're looking at Tesla. And Alphabet's placed on track for its biggest drop at one point since May of last year. Tesla, a very steep decline now of 14%.
Biggest drop in a long, long time. Tesla had a strong quarter for EV deliveries, but profits still tumbled. Shares, as I said, down 14%.
This is partially due to ambitious spending. Was Tesla's first cash burn or negative free cash flow in two years. Here's what CEO Elon Musk had to say on the company's capex plans.

**Elon Musk** (1:28)
We should be spending on capex as fast as we can spend, as fast as we can without it being too wasteful. So we're not trying to aim for like some extremely high efficiency capital spend because that would slow things down.
So it's a balance between like how much capital efficiency versus time.

**Ed Ludlow** (1:56)
Joining us now, Ivan Feinceff, Tigress Financial Partners, CEO and Partner. It's been a long time since you've been with us on Bloomberg Tech. Welcome back. The stock's down a lot. Biggest drop since June of last year.
We went into this with Wall Street saying, we want to see Tesla spend. They are. Why the negative reaction?

**Ivan Feinceff** (2:16)
Well, they like to see the companies. Wall Street likes to see companies spend, but they don't like companies that spend. And look, Tesla has never been a car story. It's always been a technology company story, an AI story.
And Wall Street has to continue to go back and forth with evaluating that. And the upcoming drivers for the company are its autonomous technology, its robotaxi, the optimist robots, and evolving to a physical AI company and how you evaluate that. And it also takes a lot of capital. And it probably is going to take, like Elon just said, they want to spend as much as they can smartly, but they are also competing against a lot of other competitors. And this company is viewed as a tech company, and the profitability from that is still a ways off.

**Ed Ludlow** (3:18)
Again, I'm going to acknowledge the stop, biggest drop since June of last year, down 14%, but at its lowest level since August of 2025 Let me just go through the sort of non-financials, right? Cyber cab production has begun. They've been doing employee rides in those cyber cabs.
They've expanded the Robo taxi areas to new cities, but also expansion in Austin, and the Optimus humanoid robot lines have gone in in Fremont, production expected to start later this year. That doesn't seem like enough of an update on those business lines to convince investors.

**Ivan Feinceff** (3:54)
Well, everybody wants to see when the Optimus robots will be available. What will be the functionality? How will they be deployed? So that's still a ways out. So it's still a show me company. And right now, the market is going to a difficult time. I mean, it's held up phenomenally well with what's going on in the world. But and it's been driven by tech, the market strength for the past several years. And you know, this year so far has been driven by tech and the price for perfection. When you see, you know, a slight pause of concern, the stocks are going to get hit hard. I mean, Tesla has always been a volatile stock. And if you look back in its history, buying the dips have paid off. So I feel that this sell off today is a buying opportunity. It's shown that to be the case in the past. And I still believe that to be the case now.
And the drivers of its future growth are still ahead of it.
And the concern is that we're not seeing currently or real tangible results on the near term horizon.

**Ed Ludlow** (5:01)
Record EV deliveries in the quarter gone, but lower ASPs, higher interest rates, rising commodity prices, stock based compensation, and then spending, AI spending. And what I find so interesting, right, is CapEx is still $25 billion for this year, which as you know, for Tesla, like, it's just unprecedented. But they're not even tracking to that right now. They're gonna have to really accelerate in the second half of this year.