So, Caterpillar Inc. (CAT) is no stranger to throwing money at electric vehicles and new tech these days. But the industrial equipment giant might be making its biggest bet in a while with a reported move into self-driving tractors. According to reports, Caterpillar is buying the startup Monarch Tractor—sometimes called the Tesla of agriculture.
This comes after a strong 2025 where Caterpillar was the top performer in the Dow Jones Industrial Average. Now, it looks like the company is eyeing its next growth phase. The deal, reported by Bloomberg, follows a rough patch for Monarch, which recently announced staff layoffs and has struggled to grow independently despite raising over $250 million in private funding.
Founded by a team that includes former Tesla employee Mark Schwager, Monarch was once a key player in the electric tractor sector before hitting some bumps. While Caterpillar and Monarch haven't confirmed the acquisition, Monarch did post on LinkedIn that it had sold to a "large global equipment manufacturer." The startup also highlighted its recent pivot away from manufacturing to a technology licensing model, saying it validated that its core EV and autonomous tech could work across tractors, augers, utility vehicles, and construction equipment.
This reported acquisition fits neatly into Caterpillar's broader tech push. Earlier this year, the company expanded its partnership with NVIDIA Corporation (NVDA) and showcased AI-powered solutions for machines, job sites, factories, and supply chains at CES 2026. Caterpillar CEO Joe Creed has emphasized deploying advanced technology across all aspects of the business, saying the collaboration with NVIDIA is accelerating progress "like never before." The company plans to use NVIDIA's Jetson Thor platform for real-time AI inference on construction, mining, and power equipment, aiming for AI-assisted and autonomous operations with features like personalized insights, real-time coaching, and computer vision.
Buying Monarch could let Caterpillar bolt self-driving tech onto its equipment or offer it as an add-on, possibly with a subscription model similar to Tesla's Full Self-Driving package. That's not just about innovation—it's also about competition. Rival Deere & Co. (DE) has been working on AI products and already offers self-driving tractors and equipment. For Caterpillar, this acquisition might be as much about keeping up with a key competitor as it is about growing its own products, ensuring it isn't left behind in the shift toward AI-powered, autonomous agricultural machinery.
Investors, however, seem a bit skeptical for now. With the deal not officially announced, Caterpillar shares fell 2.4% to $775.62 on Wednesday. The stock trades in a 52-week range of $282.46 to $798.54, and despite the dip, it's still up 30% year-to-date in 2026 and over 160% in the past 52 weeks. So, while the market might be taking a wait-and-see approach, Caterpillar's big bet on the "Tesla of agriculture" could be a pivotal move in the race to automate the fields.
