Unsupervisor Self-Driving, Will Musk Pay Back If You Accident…Introducing a new FSD next year
Enlarge image Tesla and Meta are increasing their investments in artificial intelligence (AI). Starting in the second quarter of next year, Tesla plans to offer its Full Self-Driving (FSD) system, which can drive without a person supervising it, in regular customer cars. The company also plans to build its own AI chip factory, called Terra Fab. Meta has used AI to increase advertising sales, but its large spending on facilities has pushed its cash flow into the red.
On the 21st, local time, Tesla announced during a conference call about its third-quarter earnings that it plans to introduce FSD that does not require driver supervision in regular customer cars in the second quarter of next year.
Today, Tesla's FSD system still requires drivers to watch the road and take control if something unexpected happens. Tesla plans to remove this requirement. If the system improves as planned, Tesla owners could earn money by using their cars as taxis to carry passengers when they are not using the cars themselves.
Tesla also plans to expand its robotaxi service, which already operates in six U.S. cities, to Dallas. However, unsupervised FSD is expected to be available only in certain areas where robotaxis operate when it first launches.
Tesla also plans to speed up the production of its own AI chips. CEO Elon Musk said, "We will invest tens of billions of dollars in Terra Fab to start full-scale semiconductor production at the end of 2028." Tesla has also started producing its Optimus humanoid robot at its factory in Fremont, California, in the United States.
Tesla's sales in the third quarter reached $28.05 billion, or about 37 trillion won, similar to the same period last year. Its adjusted earnings per share (EPS) were $0.48, higher than the market estimate of $0.43. The company also reported positive free cash flow (FCF) of $1.53 billion. This figure measures the cash left after subtracting spending on facilities from the cash earned through business operations. Tesla returned to positive free cash flow in one quarter after reporting a deficit of $1.09 billion in the second quarter.
However, the improvement in cash flow was largely due to lower investment spending. Tesla spent $4.73 billion on facilities in the third quarter, far below the market's expectation of about $8 billion. CEO Musk said that more than 75% of new car buyers in North America chose FSD. "The biggest driving force behind demand is FSD," he said.
Meta's sales grew sharply, but the cost of investing in AI also increased. The company reported third-quarter sales of $64.6 billion, or about 85.52 trillion won, up 26% from the same period last year and above market expectations. Its AI-powered advertising recommendation system helped drive this growth. The number of times ads were shown increased by 10%, while the average price per ad rose by 14%.
However, Meta's spending on facilities increased 1.8 times to $34.9 billion during the same period. As a result, its free cash flow fell to a deficit of $2.1 billion. At the end of the quarter, the company had $83.7 billion in debt, more than its $82.4 billion in cash and cash equivalents. Its third-quarter operating profit fell 37% compared with the same period last year, reaching $9.89 billion, as costs related to lawsuits over the protection of young people were included in its results.
Even so, Meta has no plans to slow its investments. The company raised the lower end of its forecast for this year's spending on facilities from $130 billion to $135 billion. Its board of directors also approved the creation of a new type of common stock called "Type C," which has no voting rights. This could allow Meta to raise money by issuing shares in the future while helping CEO Mark Zuckerberg keep control of the company.
Meta's AI services are also showing signs of success. The company said its personal AI agent, "Muse," reached more than 10 million users in the United States and Canada within six weeks of its launch. However, the company is delaying the service's expansion to other countries because running AI requires high computing costs.
Won Ho-seop, Silicon Valley correspondent