Tesla has dismissed reports that its board is actively seeking a replacement for CEO Elon Musk, calling the claims “absolutely false” even as the electric vehicle giant faces its sharpest decline in performance and investor confidence in years.

The company’s denial followed a Wall Street Journal report on Wednesday that claimed board members had approached executive search firms to begin scouting potential candidates to succeed Musk. The report, citing people familiar with the discussions, sent shares tumbling by as much as 3% in after-hours trading on platforms like Robinhood before regaining some ground.

Robyn Denholm, chair of Tesla’s board, pushed back strongly against the report, writing on social media platform X: “Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company. This is absolutely false (and this was communicated to the media before the report was published). The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead.”

Despite the denial, industry analysts say the report may have touched a nerve, reflecting mounting frustration from shareholders after a woeful start to 2025 that spilled over from last year. Tesla has seen its market value slashed by more than 30% since January, following dismal earnings, production slowdowns, and persistent concerns that Musk’s growing political involvement is undermining the company’s brand and alienating customers globally.

In the first quarter of 2025, Tesla posted a 9% drop in total revenue to $19.34 billion, far below the $21.11 billion expected by analysts, according to LSEG data. Automotive revenue fell 20% year-on-year to $14 billion, due to a combination of lower average selling prices, incentives, and temporary factory upgrades that interrupted Model Y production.

Net income collapsed 71% from the year before, plunging from $1.39 billion to just $409 million. Profit per share fell to 12 cents, down from 41 cents a year ago.

This steep decline has rattled investors, many of whom once believed Tesla could weather temporary dips in performance. Now, some point to Musk’s political entanglements, particularly his public alignment with Donald Trump, as a key factor dragging on the company’s value.

Musk’s political leanings have drawn increasing scrutiny. He was a cheerleader of the Trump campaign and was subsequently appointed to lead the Department of Government Efficiency (DOGE), which aims to streamline federal agencies’ spending and cut waste.

Although Musk said he would only spend “a day or two per week” on the project and later confirmed that he had stepped back from it, the damage may already have been done. His involvement in overt political activism, especially in a sharply divided global market, has risked alienating Tesla’s progressive consumer base, particularly in regions like California, Western Europe, and parts of Asia, where environmental and social concerns strongly influence EV adoption.

Analysts: Denial Is Not the End of the Story

Despite the board’s public defense of Musk, some analysts interpret the episode as a veiled message — a “warning shot” to the billionaire CEO that his position, while secure for now, is no longer untouchable.

Dan Ives of Wedbush Securities, a long-time Tesla bull, said the Wall Street Journal story, and the board’s quick rebuttal, reflect real tensions that have been brewing behind closed doors.

“On the WSJ/Musk article: While this was a very tense situation, we believe Musk clearly did the right thing [resigning from DOGE], and we believe Musk will remain CEO for at least five years at Tesla,” Ives said. “We would be surprised if the Board was still heading down this path. The Board did a warning shot.”

Others believe that while Musk’s recent actions have undoubtedly tested investor patience, there is still no clear successor with the vision, control, or charisma to replace him.

As Tesla struggles to regain its footing in a rapidly evolving EV industry, the leadership conversation is likely far from over. Competition is heating up from both legacy automakers and new entrants, and geopolitical tensions continue to complicate Tesla’s international growth strategy.

Analysts note that Musk’s ability to refocus on core operations while avoiding further political controversy will be critical in determining whether the company can rebound or continue to stumble.

Alphabet-owned Waymo and Japanese auto giant Toyota have entered into a preliminary partnership to explore a new frontier in autonomous driving: personally owned self-driving vehicles.

The alliance marks a potential strategic pivot away from the robotaxi-only playbook, hinting at a future where private consumers may soon own cars embedded with Waymo’s advanced driverless technology.

But beyond the immediate tech implications, the announcement has ignited debate on Wall Street and in the auto-tech sector, with some analysts now openly asking: Does Tesla finally have a real threat in the race for autonomous dominance?

Announced Tuesday, the collaboration between Waymo and Toyota aims to “leverage Waymo’s autonomous technology and Toyota’s vehicle expertise to enhance next-generation personally owned vehicles,” according to a joint statement. Though early in its formulation, the partnership hints at Toyota vehicles potentially being integrated into Waymo’s growing ride-hailing fleet, which has already been rolled out in Phoenix, San Francisco, Los Angeles, and most recently Austin.

Waymo’s co-CEO Tekedra Mawakana said the partnership could accelerate both companies’ ambitions in next-gen mobility. The idea isn’t just to fine-tune driver-assistance systems, but to potentially create fully autonomous vehicles that consumers can own — a concept once thought to be years away.

Analysts Divided: Is This Tesla’s Competition?

The announcement has not gone unnoticed on Wall Street, where opinions on its significance diverge sharply. Morgan Stanley, in a note to investors, said the Waymo–Toyota tie-up is a “major milestone” and represents “legit competition” for Tesla, which has long dominated the narrative around autonomous driving. The firm sees the partnership as a strategic alignment that brings together Google’s world-leading AI and mapping infrastructure with Toyota’s production scale and reliability.

But not everyone is buying into the buzz. Dan Ives, a tech analyst with Wedbush Securities and a long-time Tesla bull, downplayed the significance of the announcement.

“I disagree that the Waymo/Toyota is a groundbreaking deal and a threat to Tesla,” Ives said. “Tesla will own the autonomous market in my view, and no one can compete with their scale and scope. It starts in Austin in June, then the autonomous journey begins. Key chapter of growth.”

Tesla CEO Elon Musk has also been characteristically dismissive, suggesting in a recent earnings call that Waymo’s robotaxis are too expensive to be produced at scale, and reaffirming Tesla’s commitment to launching a fully autonomous ride-hailing service using its Model Y vehicles with the new “unsupervised” Full Self-Driving (FSD) software starting June in Austin.

Waymo Has the Lead — At Least for Now

However, by several measures, Waymo already has the upper hand when it comes to real-world deployment. The company is now delivering over 250,000 paid robotaxi rides per week, up from 200,000 in February. Its Waymo One service is active in four major metro areas — including Phoenix, San Francisco, Los Angeles, and Austin — with no human driver behind the wheel.

By contrast, Tesla’s so-called Full Self-Driving software, despite its name, still requires driver supervision and has yet to be validated as safe for fully autonomous operation. Regulatory agencies in the U.S. have investigated multiple incidents involving Tesla’s FSD and Autopilot features, further slowing Tesla’s path toward regulatory approval for a commercial driverless ride-hailing service.

Even Alphabet CEO Sundar Pichai acknowledged last week during Q1 earnings that Waymo has not finalized its long-term business model but emphasized the “optionality around personal ownership” as a promising revenue path. The Waymo–Toyota partnership appears to be a concrete step in that direction — potentially combining the tech know-how of Silicon Valley with the production might of Japan’s top automaker.

Not Waymo’s First Partnership — But Possibly the Most Significant

Waymo has previously collaborated with automakers including Jaguar Land Rover, Stellantis, Mercedes-Benz, Hyundai, and China’s Geely, often resulting in vehicles tailored for Waymo’s testing or ride-hailing fleets. However, those efforts largely remained limited in scale.

This Toyota deal may be different. Toyota is not only the world’s largest automaker by sales, but also a leader in hybrid and electrification platforms — a crucial advantage for developing energy-efficient autonomous systems. And unlike smaller OEMs, Toyota has the capacity to scale production globally if the partnership matures beyond testing.

Waymo said its collaboration with Toyota would not interfere with existing partnerships involving Hyundai and Geely for its Waymo One service. But industry insiders note that this tie-up could eventually open the door to mass-market personal AVs — a holy grail the industry has long chased but never achieved.

A Broader Shift in Industry Focus

Waymo and Toyota’s announcement also echoes a broader shift across the auto industry. Last year, General Motors paused its Cruise robotaxi operations after a series of safety concerns, refocusing instead on building self-driving systems for personal-use vehicles. Ford and Volkswagen similarly scaled back their investments in Argo AI, citing the difficulty of commercializing robotaxis at scale.

Meanwhile, Tesla remains an outlier, pursuing a vertically integrated approach and relying on camera-based systems, rather than the lidar and radar technologies used by Waymo and others. Musk has dismissed lidar as “unnecessary,” though Tesla’s software hasn’t proven itself in complex urban driving environments without human intervention.

It’s still unclear whether the Waymo–Toyota partnership will yield a commercially available autonomous personal vehicle. But if it does, it would mark a seismic shift — both in consumer mobility and in Tesla’s grip on the autonomous narrative.

Meta’s foray into the metaverse is proving to be an increasingly expensive gamble. In its first-quarter earnings report released Wednesday, the company revealed that Reality Labs, the unit spearheading CEO Mark Zuckerberg’s vision of immersive digital worlds, posted an operating loss of $4.2 billion.

That’s a staggering burn rate for a business division that brought in just $412 million in revenue during the same period.

The numbers, while slightly better than Wall Street’s forecasts – analysts had anticipated a loss of $4.6 billion on revenue of $492.7 million — still underscore the long and costly road ahead for Meta as it tries to pioneer a new frontier in computing through virtual and augmented reality.

Reality Labs is the division behind the Quest VR headsets and the Ray-Ban Meta Smart Glasses, key pieces of Zuckerberg’s blueprint for a mixed-reality future where people work, play, and interact through immersive digital platforms. But so far, investors have seen little beyond losses. Since the company pivoted heavily toward the metaverse in late 2020, even rebranding from Facebook to Meta in 2021, Reality Labs has hemorrhaged more than $60 billion.

A Skeptical Wall Street Watches Closely

That sustained spending has raised eyebrows across Wall Street. While Meta’s core advertising business continues to perform well, buoyed by a rebound in digital ad markets and growing traction with AI tools that help drive engagement, its heavy investment in the metaverse remains a sore spot.

Zuckerberg has insisted that building the next computing platform will take time, patience, and billions in upfront capital. But as Reality Labs racks up quarterly losses north of $4 billion, the runway for such a vision appears increasingly narrow, especially in a macroeconomic environment where costs are rising and regulatory threats are mounting.

Trump Tariffs Add Fresh Headwinds

Those costs are set to rise further. President Donald Trump’s recent imposition of sweeping tariffs on Chinese-made electronics, including components used in VR and AR devices, is expected to pressure Meta’s already stretched hardware margins. While the company hasn’t disclosed exactly how much of its supply chain is China-dependent, analysts warn the tariffs could result in significantly higher production costs for the Quest headset line and the Ray-Ban smart glasses.

That added burden may force Meta to either absorb the cost increases, deepening its losses or pass them on to consumers — a move that could dampen demand in a market already struggling to go mainstream.

Layoffs Hit Oculus Studios

Meta is also quietly trimming its metaverse ambitions in other ways. Last week, the company confirmed layoffs within its Oculus Studios unit — the team tasked with creating first-party content and games for its VR platforms. While the number of affected employees remains undisclosed, the move adds to a growing list of cost-cutting measures inside Reality Labs.

“Some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size,” a Meta spokesperson said in a statement. “These changes are meant to help Studios work more efficiently on future mixed reality experiences for our growing audience, while still delivering great content for people today.”

The cuts follow a broader trend of tech companies scaling back moonshot projects and headcount as they confront tighter capital markets and investor pressure for profitability. For Meta, which has laid off tens of thousands of workers over the past two years in a bid to “flatten” its structure, Reality Labs remains the largest and most conspicuous money sink.

Still Betting Big on a Future Few Can See

Despite the financial and political headwinds, Zuckerberg appears unwavering. In internal memos and public remarks, he continues to describe the metaverse as a long-term investment that could rival the smartphone era in its eventual impact. Yet many remain unconvinced that Meta’s version of the metaverse – centered on headsets, avatars, and virtual workspaces — will ever achieve the kind of mass adoption needed to justify the colossal expenditure.

Even within the tech community, there’s growing competition and philosophical divergence over what the future of digital interaction should look like. Apple has taken a more premium and restrained approach with its Vision Pro headset. Meanwhile, OpenAI and other AI developers are steering the narrative in a different direction entirely, toward seamless, intelligent interfaces that don’t require users to strap devices to their heads.

As AI reshapes how people interact with technology — and how companies envision the future of work, communication, and play — the question is whether Meta’s metaverse model will still fit that world, or be left behind by a more practical, less immersive paradigm.

At a time when Washington is tightening the screws on China’s tech sector, Nvidia CEO Jensen Huang is striking a different tone — one that suggests the race for AI dominance isn’t as lopsided as U.S. policy might hope.

Speaking to reporters Wednesday at a technology conference in the U.S. capital, Huang offered a stark reality check: China is not trailing the United States in artificial intelligence, at least not by much.

“We are very close,” Huang said. “Remember, this is a long-term, infinite race.”

It was a moment of candor that clashed sharply with prevailing narratives in Washington, where policymakers are increasingly treating China’s AI ambitions as something to be thwarted rather than matched. For Huang, however, the threat isn’t just China’s growing capability — it’s the risk that the U.S. might hobble itself through overregulation and protectionism.

Huang, who has led Nvidia through its meteoric rise as the engine room of the AI revolution, didn’t mince words when he spoke of Huawei, the Chinese firm that has been a central target of U.S. sanctions.

“They’re incredible in computing and network technology,” Huang said. “They have made enormous progress in the last several years.”

Huawei, though largely cut off from American tech due to a trade blacklist, has reportedly been building its own AI chips for domestic customers — a move that speaks to Beijing’s push for self-reliance in strategic technologies. And while the U.S. has sought to curb those ambitions through export controls, Nvidia’s own experience shows the limits of that approach.

Earlier this month, the Trump administration imposed new restrictions on Nvidia’s H20 chips, a China-compliant version of its Hopper architecture, barring shipments without a license. That decision, Nvidia said, will cost the company an estimated $5.5 billion in revenue. The irony? The H20 was designed precisely to comply with prior U.S. curbs, underscoring how rapidly Washington is shifting the goalposts.

For Huang, the fallout highlights a deeper risk, not just to Nvidia, but to America’s tech leadership itself.

“This is an industry that we will have to compete for,” he said. “We should focus on making U.S. companies more competitive, not just limiting others.”

Nvidia is trying to do just that. The company recently announced plans to invest $500 billion in AI infrastructure in the U.S. over the next five years, part of a broader push to onshore manufacturing and strengthen its domestic footprint. Huang confirmed Wednesday that Nvidia intends to build its AI devices in the U.S., with Foxconn set to assemble AI servers near Houston.

“With willpower and the resources of our country, I’m certain we can manufacture onshore,” he said.

President Trump, speaking the same day, applauded Nvidia’s domestic push and referred to Huang as “my friend Jensen” — a sign that despite current regulatory hurdles, the company still commands political favor in Washington’s shifting sands.

But Wall Street remains wary. Nvidia’s stock has dropped more than 20% this year, erasing part of the staggering gains it posted in 2024, when demand for AI chips seemed insatiable. The stock fell nearly 3% on Wednesday, reflecting investor anxiety over tighter export rules, global market instability, and growing competition abroad — not just from AMD and Intel, but from homegrown Chinese challengers like Huawei.

As China races to replicate or leapfrog technologies it can no longer easily import, the landscape is beginning to fracture. The world is inching toward two AI ecosystems: one rooted in Silicon Valley, the other in Shenzhen. In such a world, Huang’s warning that this is an “infinite race” seems less like a metaphor, and more like the defining reality of a new tech Cold War.

Against this backdrop, Nvidia’s challenge now is to stay at the forefront of that race, without being tripped by the very country it calls home.