A model of Tesla Inc.’s planned Optimus humanoid robot. on display during the Seoul Motor Show in Goyang, South Korea, on Thursday, March 30, 2023. The motor show will continue until April 9. Photo: SeongJoon Cho/Bloomberg via Getty Images
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The entire value of the S&P 500 currently stands at $45.5 trillion, according to FactSet. Tesla CEO Elon Musk claimed Thursday that his company’s Optimus humanoid robots could make the automaker worth more than half that.
Musk, who characterized himself as “pathologically optimistic” at the 2024 annual shareholder meeting in Austin, Texas, said Tesla is starting not only a “new chapter” in its life, but is about to write a ” new book”. Optimus seems to be one of the main characters.
Tesla first revealed its plans to work on humanoid robots in 2021 at an AI Day event, walking out a dancer in a unitard that looked like a sleek, androgynous robot.
In January, Tesla showed off Optimus robots folding clothes in a video demo that was immediately criticized by robotics engineers for cheating. The robots were not autonomous, but rather were being operated with humans at the controls.
At the shareholder event on Thursday, Musk didn’t reveal exactly what Optimus can do today. He suggested that robots will one day perform like R2-D2 and C-3PO in Star Wars. They could cook or clean for you, do factory work, or even tutor your kids, Musk suggested.
As for shareholder value, Musk said Optimus could be the catalyst for raising Tesla’s market cap to $25 trillion one day.
Speaking to a crowd of mostly fanatical fans in an auditorium at the Gigafactory, Musk promised that Tesla would move to “limited production” of the Optimus in 2025 and test humanoid robots in its factories next year.
The company, he predicted, will have “over 1,000 or several thousand Optimus robots working at Tesla” in 2025.
All of this is far-fetched even for Musk, who is known for making ambitious promises to investors and customers that fall short — from developing software that can turn an existing Tesla into a self-driving vehicle on a single charge, to EV battery exchange stations.
Reaching a market cap of $25 trillion would mean Tesla would be worth about eight times that of Apple value today. The iPhone maker is currently the world’s largest company by market capitalization, just ahead Microsoft.
At Thursday’s close, Tesla was valued at about $580 billion, making it the 10th most valuable company in the S&P 500.
Musk did not give a timeline for reaching $25 trillion. He said autonomous vehicles could propel the company to a market value of $5 trillion to $7 trillion.
Musk said he agreed with the numbers of longtime Tesla bull Cathie Wood, CEO of ARK Invest. This week, ARK set a $2,600 price target on Tesla shares through 2029, betting on a commercial robotaxi business the company has yet to enter.
Wood’s price target equates to a market cap for Tesla of over $8 trillion.
Musk’s comments at the annual meeting followed a shareholder vote to restore the CEO’s $56 billion pay plan, five months after a Delaware court ordered the company to cancel the package. The crowd cheered as the proposal was read aloud and the preliminary results were announced.
Taking the stage after reading the shareholder votes, Musk said: “I want to start by saying hot—! I love you guys.”
Shares of Tesla have fallen 27% this year as the company reckons with a decline in sales that is partly related to an aging lineup of electric vehicles and increased competition in China. The company has also implemented major layoffs. Musk has encouraged investors to look beyond the current state of business and more towards a future of autonomous driving, robots and artificial intelligence.
Among his boldest claims on Thursday was Musk’s statement that Tesla had advanced so far in silicon development that it had surpassed Nvidia when it comes to inference, or the process that trained machine learning models use to draw conclusions from new data.
Shares of Nvidia have risen almost ninefold since the end of 2022, driven by demand for its AI chips. The company is now worth about $3.2 trillion.
One concern swirling around Musk is his focus on Tesla given all his other commitments. He owns and runs the social media company X, is the CEO of SpaceX, and founded The Boring Co. and Neuralink. He launched another startup, xAI, in March last year, and the company recently raised $6 billion in venture funding.
Musk was asked by a shareholder at the meeting how important he personally is to Tesla’s future.
“I’m a useful accelerator for that future,” he said, emphasizing his role in innovation.
He said that when it comes to humanoid robots, other companies, including tech startups, are chasing the market. Competitors include Boston Dynamics, Agility, Neura and Apptronik.
“What really matters is, can we be that much faster than everybody else and have our product be a few years ahead of theirs and be better,” Musk said.
WATCH: Tesla shareholders approve Musk’s $56 billion pay package
