Will Tesla's Optimus Robots Outshine Apple? Musk Predicts GROUNDBREAKING Future

By Javier Sanchez | Saturday, 15 June 2024 09:30 AM
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Image Credit : Photo by Tesla Robotics, courtesy of Robotics247

The S&P 500, a stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States, currently holds a value of $45.5 trillion, as reported by FactSet.

Elon Musk, the CEO of Tesla, made a bold claim on Thursday that his company's Optimus humanoid robots could potentially elevate the automaker's worth to more than half of the S&P 500's current value.

During the 2024 annual shareholder meeting held in Austin, Texas, Musk, who self-identifies as "pathologically optimistic," stated that Tesla is not merely entering a "new chapter" but is on the brink of authoring an entirely "new book." The Optimus humanoid robot appears to be a central figure in this narrative.

Tesla first announced its intention to develop humanoid robots at an AI Day event in 2021, where a dancer dressed in a unitard mimicked the appearance of a sleek, androgynous robot. However, a demo video released in January, showcasing Optimus robots folding laundry, drew criticism from robotics engineers for its deceptive nature. The robots were not autonomous but were instead controlled by humans.

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Musk remained tight-lipped about the current capabilities of the Optimus robots at the shareholder event. He did, however, hint at a future where these robots could perform tasks akin to those of R2-D2 and C-3PO from "Star Wars," such as cooking, cleaning, factory work, or even teaching children.

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In terms of shareholder value, Musk suggested that the Optimus robots could be the driving force behind Tesla's market cap reaching $25 trillion someday. Addressing an audience primarily composed of enthusiastic supporters at the Gigafactory auditorium, Musk announced Tesla's plans to initiate "limited production" of Optimus in 2025 and to test humanoid robots in its factories next year. He predicted that by 2025, Tesla would employ "over 1,000, or a few thousand, Optimus robots."

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These ambitious plans are characteristic of Musk, who is known for making audacious promises to investors and customers that often fail to materialize. Achieving a $25 trillion market cap would mean that Tesla's worth would be approximately eight times that of Apple's current value. Apple, the manufacturer of the iPhone, is presently the world's largest company by market cap, slightly ahead of Microsoft.

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As of Thursday's close, Tesla was valued at approximately $580 billion, making it the 10th most valuable company in the S&P 500. Musk did not specify a timeline for reaching the $25 trillion mark but did suggest that autonomous vehicles could propel the company to a market cap of $5 trillion to $7 trillion.

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Musk concurred with projections from Cathie Wood, CEO of Ark Invest and a long-time Tesla bull. This week, Ark set a $2,600 price target on Tesla's stock by 2029, banking on a commercial robotaxi business that Tesla has yet to enter. Wood's price target equates to a market cap for Tesla of over $8 trillion.

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Musk's remarks at the annual meeting came after the shareholder vote to reinstate his $56 billion pay plan, five months after a Delaware court ordered the company to rescind the package. The proposal was met with cheers from the crowd when it was read aloud and when preliminary results were announced.

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Despite a 27% drop in Tesla shares this year, largely attributed to a decline in sales tied to an aging lineup of electric vehicles and increased competition in China, Musk remains optimistic. He has urged investors to focus on the company's future prospects in autonomous driving, robots, and artificial intelligence, rather than its current challenges.

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Musk also made a bold claim that Tesla has surpassed Nvidia in developing silicon for inference, the process that trained machine learning models use to draw conclusions from new data. Nvidia, a company known for its AI chips, has seen its shares increase almost ninefold since the end of 2022, and is now worth about $3.2 trillion.

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Despite concerns about Musk's ability to focus on Tesla given his numerous other commitments, including running social media company X, serving as CEO of SpaceX, and founding The Boring Co. and Neuralink, Musk reassured shareholders of his importance to Tesla's future. He described himself as a "helpful accelerant" to that future, emphasizing his role in innovation.

Musk acknowledged that other companies, including tech startups, are also pursuing the development of humanoid robots. Competitors include Boston Dynamics, Agility, Neura, and Apptronik. However, Musk remains confident in Tesla's ability to outpace these competitors, stating, "What really matters is, can we be much faster than everyone else and our product be done a few years before theirs and be better."

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