An employee of the Tesla Gigafactory Berlin Brandenburg works on a production line of a Model Y electric vehicle.
Patrick Pleul | Picture Alliance | Getty Images
Shares of Tesla dipped as much as 3% Friday morning as the stock faced pressure from supply chain delays due to a crisis on the Red Sea, and after offering more price cuts on its vehicles in China. In the U.S., rising labor costs and a decision by rental car company Hertz to sell off a large portion of its electric vehicle fleet, also added to Tesla’s woes.
Shares had recovered a bit by 10 a.m. ET, when the stock was down about 1.5%.
Reuters reported late Thursday that Tesla plans to suspend most production at its factory outside Berlin in Grunheide, Germany from around Jan. 29 to Feb. 11 due to conflict in the Red Sea that has disrupted global trade.
The Iranian-backed Houthi militia group has been attacking cargo ships and merchant vessels in the Red Sea in response to the ongoing war in the Gaza Strip. These attacks have drawn condemnation from leaders around the globe.
“The considerably longer transportation times are creating a gap in supply chains,” Tesla told Reuters in a statement.
Analysts at Baird estimate Tesla produces between 5,000 and 7,000 vehicles per week at its German vehicle assembly plant, which would imply “a 10k-14K hit” to deliveries in its first quarter, according to a Thursday note.
The Baird analysts wrote that they are “wary” of further impacts to Tesla’s supply chain, and they are “closely monitoring” any impact on the company’s shipping routes from China. “No delays have been cited, however, we speculate that disruptions in the Red Sea may lead to longer wait times as supply chains are rerouted,” they wrote.
Analysts were also focused on Tesla’s continuing price cuts including new discounts in China. Morgan Stanley analysts noted Model 3 and Model Y vehicles have been freshly discounted, though the cuts were “more moderate than the market had expected,” according to a note Friday.
Price cuts over the past year have impacted Tesla’s ability to keep selling its fully electric vehicles in high volumes to rental car companies including Sixt and Hertz.
Hertz CEO Stephen Scherr said on CNBC’s Squawk on the Street on Thursday that his company is taking 20,000 EVs out of its fleet, which was comprised mostly of Tesla vehicles.
Hertz is trying to “bring supply in line with demand” Scheer said, and “addressing a cost issue related to the EVs in the context of damage and damage costs” as well as depreciation in the value of the electric vehicles.
Meanwhile, Tesla’s business and reputation remains under pressure in Europe due to ongoing labor strikes in Sweden and throughout Scandinavia.
At its factories in the U.S., the EV maker is implementing pay rate increases for workers that kick in this month, a move seen as a tactic to stave off workers’ wishes to unionize. The pay bumps follow historic wins by the United Auto Workers in 2023 with Tesla competitors in Detroit, and an announcement by UAW that it would aim to organize beyond the Big Three including at Tesla, Toyota and others.
Nvidia CEO Jensen Huang attends a roundtable discussion at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 11, 2025.
Sarah Meyssonnier | Reuters
Nvidia announced Tuesday that it hopes to resume sales of its H20 general processing units to clients in China, saying that the U.S. government had assured the company would be granted licenses.
Nvidia’s sales of the H20 chips, which had been designed specifically to keep them out of export controls on China, were halted in April.
“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement.
This comes against the backdrop of a preliminary trade deal between Washington and Beijing last month that sought China to resume rare earth exports and the U.S. to relax tech export controls.
Nvidia CEO Jensen Huang in recent months has ramped up his lobbying against export controls, arguing that they inhibited American tech leadership. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.
Huang also announced a new “fully compliant” GPU, NVIDIA RTX PRO, saying it was ideal for smart factories and logistics.
The potential change in U.S. stance follows a meeting between Huang and U.S. President Donald Trump last week.
In his meeting with Trump and U.S. policymakers, Huang had reaffirmed Nvidia’s support for the administration’s job creation and onshoring efforts, as well as the aim for America to lead in global AI, the company said.
Meanwhile, in Beijing, it was confirmed that Huang has met with government and industry officials to discuss the benefits of AI and ways for researchers to advance safe and secure AI for the benefit of all.
In this photo illustration, a man seen holding a smartphone with the logo of US artificial intelligence company Cognition AI Inc. in front of website.
Timon Schneider | SOPA Images | Sipa USA | AP
Artificial intelligence startup Cognition announced it’s acquiring Windsurf, the AI coding company that lost its CEO and several other senior employees to Google just days earlier.
Cognition said on Monday that it will purchase Windsurf’s intellectual property, product, trademark, brand and talent, but didn’t disclose terms of the deal. It’s the latest development in an AI talent war, as companies like Meta, Google and OpenAI fiercely compete for top engineers and researchers.
OpenAI had been in talks to acquire Windsurf for about $3 billion in April, but the deal fell apart, and Google said on Friday that it hired Windsurf’s co-founder and CEO Varun Mohan. Google is paying $2.4 billion in licensing fees and for compensation, as CNBC previously reported.
“Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Cognition CEO Scott Wu wrote in a memo to employees on Monday. “After today, our efforts will be as a united and aligned team. There’s only one boat and we’re all in it together.”
Cognition didn’t immediately respond to CNBC’s request for comment. Windsurf directed CNBC to Cognition.
Cognition is best known for its AI coding agent named Devin, which is designed to help engineers build software faster. As of March, the startup had raised hundreds of millions of dollars at a valuation of close to $4 billion, according to a report from Bloomberg.
Both companies are backed by Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins and General Catalyst.
“I’m overwhelmed with excitement and optimism, but most of all, gratitude,” Jeff Wang, the interim CEO of Windsurf, wrote in a post on X on Monday. “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.”
Wu said that the acquisition ensures all Windsurf employees are “treated with respect and well taken care of in this transaction.” All employees will participate financially in the deal, have vesting cliffs waived for their work to date and receive fully accelerated vesting for their, according to the memo.
“There’s never been a more exciting time to build,” Wu wrote.
The Grok logo is being displayed on a smartphone with Xai visible in the background in this photo illustration on April 1, 2024.
Jonathan Raa | Nurphoto | Getty Images
The European Union on Monday called in representatives from Elon Musk‘s xAI after the company’s social network X, and chatbot Grok, generated and spread anti-semitic hate speech, including praise for Adolf Hitler, last week.
A spokesperson for the European Commission told CNBC via e-mail that a technical meeting will take place on Tuesday.
xAI did not immediately respond to a request for comment.
Sandro Gozi, a member of Italy’s parliament and member of the Renew Europe group, last week urged the Commission to hold a formal inquiry.
“The case raises serious concerns about compliance with the Digital Services Act (DSA) as well as the governance of generative AI in the Union’s digital space,” Gozi wrote.
X was already under a Commission probe for possible violations of the DSA.
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Grok also generated and spread offensive posts about political leaders in Poland and Turkey, including Polish Prime Minister Donald Tusk and Turkish President Recep Erdogan.
Over the weekend, xAI posted a statement apologizing for the hateful content.
“First off, we deeply apologize for the horrific behavior that many experienced. … After careful investigation, we discovered the root cause was an update to a code path upstream of the @grok bot,” the company said in the statement.
Musk and his xAI team launched a new version of Grok Wednesday night amid the backlash. Musk called it “the smartest AI in the world.”
xAI works with other businesses run and largely owned by Musk, including Tesla, the publicly traded automaker, and SpaceX, the U.S. aerospace and defense contractor.
Despite Grok’s recent outburst of hate speech, the U.S. Department of Defense awarded xAI a $200 million contract to develop AI. Anthropic, Google and OpenAI also received AI contracts.