Meet the AI Company That Can Thrive Even if an AI Bubble Bursts

Tesla's demand is less tied to the AI hype cycle, and its AI integration differentiates it from companies such as Oracle.

Tesla faces risks but may benefit in the long term after an AI bubble bursts.

To see why Tesla (NASDAQ: TSLA) is an artificial intelligence (AI) company, it's necessary to appreciate what sets it apart from companies such as Oracle (NYSE: ORCL) and why it could be a longer-term winner if the AI bubble bursts.

History shows we might be in an AI bubble, but it also suggests that many people will call the top prematurely.

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Let's put it this way: Two long-term investors can agree that the price of, say, oil is in a bubble when it's at $60. The price reaches $120, the bubble bursts, then falls to $80, only to rise inexorably afterward. The seller at $60 waxes lyrical about calling it a bubble and never gets to buy again at $80; the holder at $60 enjoys handsome returns even after getting burned in the bubble's collapse.

There is another approach: A third investor might find a company that, although it faces challenges when the bubble bursts, could actually benefit in the long run. Tesla could be in this position.

The rationale behind the argument is twofold. First, Tesla is a company that embeds AI into its solutions -- electric vehicles, robotaxis, and its Optimus humanoid robots -- rather than one that builds AI capabilities to sell to third parties. To be clear, Tesla, along with SpaceX, is an investor in chip manufacturing initiative Terafab.