Elon Musk and Tesla's $30 trillion AI supersonic tsunami
Tesla CEO Elon Musk offered some pretty eye-popping aspirations for the company during remarks on Saturday.
Musk made a virtual appearance at the Tesla Owners of Silicon Valley 2025 'Takeover" party in San Mateo, Calif. The group is, essentially, a fan club and community for Tesla and Musk enthusiasts. Its Takeover event draws attendees from all over the world, according to organizers.
The headline from the event might just have been an admittedly aspirational comment about $30 trillion a year in humanoid robot revenue.
Tesla is using its artificial intelligence and manufacturing capabilities to build its Optimus humanoid robots. Version three of 'Optimus is the right design to go to volume production," said Musk. Tesla plans to make a few hundred of those by the end of 2025. Originally, Tesla planned to have a few thousand, but the new design slowed things down a little. Tesla still plans to ramp production higher in 2026.
Tesla is betting big on AI, using it for robots and to train its self-driving cars. Robots are 'probably the world's biggest product…There's a market for 20 billion robots," said Musk. 'Hypothetically, if Tesla was making one billion of these a year…maybe on the order of $30,000, I'm just guessing here, that's $30 trillion in revenue."
It's an incredible prediction. 'Long way to go between here and making one billion robots a year," added Musk.
There isn't a significant market for humanoid robots yet. Nvidia CEO Jensen Huang has said that robots can become the world's largest market. (Housing, consumer electronics, and cars are three of the largest today.)
The world spends 'what $50 trillion on human labor a year now?" says Futurum chief market strategist Shay Boloor. Useful robots are 'pretty disruptive if you can conquer it."
Musk, for his part, doesn't fear the labor disruption, believing it will end up creating an age of abundance with hard labor essentially eliminated. 'I've never seen any technology advance as fast as AI," said Musk, describing it as a supersonic tsunami.
It's all pie in the sky for now, but quite a vision of the future.
Investors should pay attention to events like the 'Takeover." It's almost like a Wall Street event for the EV maker. Tesla is more of a retail stock than the megacap companies. Smaller retail investors hold more than 40% of the shares available for trading, according to Bloomberg. The average for the rest of the Magnificent Seven is closer to 25%.
Whether the interview will move Tesla's stock on Monday is anyone's guess. Shares dipped 8% on Thursday after Tesla reported second-quarter earnings on Wednesday evening. Shares bounced about 4% on Friday. Coming into the week of trading, Tesla stock was down 22% year to date and up about 44% over the past 12 months.
Shares are trading for about 180 times estimated 2025 earnings. That's the second-highest PE ratio in the S&P 500, according to Bloomberg, trailing only Palantir Technologies.
That valuation indicates that, to some extent, investors are as optimistic about the future.
Write to Al Root at allen.root@dowjones.com
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