Why Investors Hit the Brakes on Tesla Stock Today

At the highly influential Consumer Electronics Show (CES) in Las Vegas, one company unveiled a suite of artificial intelligence (AI) solutions designed to advance self-driving technology. Unfortunately, electric vehicle (EV) titan Tesla (TSLA 4.14%) wasn’t that company. On fears that Tesla might be dented by such competition, investors sold out of its stock on Tuesday to leave it with a 4% loss in value.

The AI race heats up

Delivering the keynote speech for CES 2026 on Monday, Nvidia CEO Jensen Huang took the opportunity to introduce new AI offerings from his company. One of these was Alpamayo, described in the official Nvidia blog as “an open reasoning model family for autonomous vehicle development,” which is “part of a sweeping push to bring AI into every domain.”

One of the main occupants of the assisted/autonomous driving domain is, of course, Tesla. The company has leaned heavily into the technology, most recently with the release of its Full-Self-Driving (FSD) v14 software near the end of last year. Despite its name, FSD is an assisted driving system and not an autonomous one.

Alpamayo and other AI solutions Nvidia is rolling out are open-source, so their development should be relatively quick.

AI in the fast lane

Chip maker Nvidia is the near-undisputed king of AI processors, and as a developer of cutting-edge AI driving solutions, it will be a formidable competitor in that segment as well. This presents a big challenge for Tesla, which has made AI and robotics core components of its business strategy. Nvidia poses a significant threat in the former, then, and investors are right to be concerned about this.