By Akash Sriram and Abhirup Roy Oct 21 (Reuters) - Tesla cut its annual capital expenditure forecast by a fifth and posted surprise positive free cash flow in the third quarter on Wednesday, after investing far less in its AI and robotics ambitions than Wall Street had expected.

Heavy spending is needed to help Tesla reorient operations around futuristic business lines, a shift seen as justifying a merger with SpaceX.

Tesla reported surprise positive free cash flow for the third quarter on Wednesday after spending far less on AI and robotics than Wall Street expected, as the EV maker weighs a possible merger with CEO Elon Musk’s SpaceX.

Tesla reported a decline in third-quarter profit, but generated more cash than analysts expected, leaving investors with a mixed picture as it explores a possible merger with Elon Musk's other big company,