Tesla puts $200 weekly limit on AI spending for employees

Tesla has told employees they cannot spend more than $200 a week on AI tools starting July 6, according to an internal memo first reported by The Information.

Anyone who wants to exceed that threshold now needs management sign-off, a sharp reversal from a company that spent recent months actively pushing staff to use AI more.

In the past six months, the company made it mandatory for all its scattered AI usage to be integrated into an approved platform referred to as the Bottle Rocket, where models from OpenAI, Anthropic, xAI, and Cursor became available to their workers.

However, things turned out far better than they had anticipated; reportedly, software developers had been racking up bills worth thousands per week.

The $200 limit does not pertain to beta editions of xAI software products from Musk’s separate AI enterprise, ensuring that power users flock to Grok and Cursor’s Composer platform over its competitors.

Musk has been for months urging Tesla employees to favour technologies linked to his other ventures by sending out an email to the entire organisation about Composer after his AI research facility started collaborating with Cursor. SpaceX will soon purchase the parent company of Cursor, Anysphere, for $60 billion.

Despite the motivations behind the new policy, Grok remains an unpopular choice at Tesla, as many engineers prefer Anthropic’s Claude, according to sources familiar with the matter. When an expense limit excludes your offering but users still find ways to circumvent it, such motivation doesn’t amount to much.

Tesla's valuation increasingly hinges on AI, with Musk tying the company's future to the Robotaxi network and Optimus humanoid robot rather than car sales, even as revenue has stayed roughly flat for two years.