Tesla Human Factory

When I was a kid, my favorite toy was a robo-sapien — a one-foot-tall humanoid robot. I could make it walk, talk, and dance with a remote control. 18 years later, I’m watching videos of Tesla’s humanoid robot, Optimus.  The purpose of Optimus is to do boring, dangerous, and repetitive work that humans generally don’t want to do. Robo-sapien is to Optimus as the box TV is to the iPhone. One of them can be extremely useful.

Useful robots drive wealth creation.

200 years ago, wealth was built on slavery. Today, it’s built on technology. We’ve gone from slaveholders to shareholders. The stock market enables anyone to own the rights to the profits of the robots.

AI robotics will continue to drive wealth creation for decades. [1]

From 2017 to 2020, I talked a lot about Tesla. At first, nobody listened. But over time, I persuaded a dozen friends and family to invest meaningful amounts into Tesla. They all profited thousands of dollars. I profited to the tune of six figures, so far. I think 2024 to 2026 will be a similar deal — me trying to get people to buy TSLA before the next big growth curve. 

In 2018/2019, Tesla ramped production of Model 3. To my surprise, the stock price went down. Tesla had a lot of debt and was burning cash. But once the Model 3 program was ramped AND profitable, the market saw the big picture. With help from 0% rates, investors overreacted. In 2020, the stock price increased 10X in 10 months, from $28.50 in March 2020 to $285 in January 2021. (For a couple of months I was a 22-year-old millionaire.)

I anticipate a hype cycle for Tesla’s AI products, driven by Robotaxi and Optimus. I think investors will react when the AI products hit the market. I don’t think investors will wait until they’re profitable since Tesla now has $30 billion in cash.

My Model Y driving me on Boston city streets while I eat basil fried rice with chicken. A surreal experience. It’s video in, behavior out. 

There is a lot of hype around AI, and for good reason. My car can already drive itself on city streets, albeit not perfectly. [2]

It is a matter of time before the Tesla Robotaxi network comes to fruition, at least in some municipalities. I look forward to the day when I see Optimus stepping out of the driver's seat of an autonomous Tesla. The Robotaxi Network combined with useful Optimus bots could create a robotic labor-sharing network.

I predict that the next big TSLA bull run will start in 2027.

In May 2019, I predicted in a blog post that in 2024 Tesla will be valued $500 billion, a 15X increase. It’s February 2024 and the company is at $600 billion. Today I predict that in 2029 TSLA will be valued at $4 trillion, a 6.5X increase.

Screenshot of my 2019 blog post on my Wix website. I don’t think anyone read it.

When it comes to exponential growth, I’d rather invest five years early than one day late. At the right price. 

I’m glad I can see these videos from Tesla. We’re looking at the early days of AGI robotics. It’s the first inning. I can extrapolate where this tech development is going. I believe Tesla can scale bot production like they did with the Model 3. I think the mid-2020s is a good time to buy ownership of the humanoid bot factories — before they are even built.

When I worked at Tesla, things did not go according to plan. Nonetheless, in terms of potential impact on the global economy, the humanoid bot factories are the most valuable product ever to be attempted to be built.

Low and declining birth rates, declining populations, and declining labor participation will continue to drive a labor shortage. The global demand for robotic labor is huge, perhaps unlimited.

Economy = Capita x Output per Capita

Economy = (Number of bots x Output per bot) + (Number of humans x Output per human)

Increasing capita with humanoid robots increases labor, and thus the economy. The potential value of Optimus factories is trillions. I like trillions because a tiny percentage ownership of trillions is millions.

Here is a rough mental model for considering the market cap of a humanoid robot business:

# of Bots x Avg hourly compensation x Hours/Year = Annual Revenue x Multiplier = Market Cap

In the 2030’s Tesla could have 10 million bots working in the labor market. 

10 million bots * $10/hour * 3600 hours = $360 billion/yr * 10 = $3.6 Trillion Market Cap 

Right now I own .0000573% of Tesla. 

0.000000573 * $3.6 Trillion = $2,065,997.13

Tesla investor and YouTuber Steven Mark Ryan made some thought-provoking comments on this podcast:

My best guess is that Earth could probably easily sustain a 10X of global labor, and utilize that massively. We are going to enter an era of energy hyper-abundance. What do we do with it? I think the possibilities get ridiculous. Most people are just like, this too ridiculous to even fathom so I’ll just ignore it or dismiss it.

I think it’s important for investors to think about the distant future, what are the possible outcomes? As opposed to going: Oh that’s ridiculous, I’m not going to think about that.

I can easily see a 10X in humanoid robots/people, call it 100 billion. I don’t see any major issues there.

The timeline could look something like this:

2026 - Optimus starts working in Tesla’s factories and stores.

2027 - Optimus bots start working for other businesses.

2030s - It’s common to see Optimus working in public and private places all around the world.

Today, Tesla is creating Optimus prototypes, which is the relatively easy part. The real product is the factory that can crank out millions of useful general intelligence bots. The hardest part is building the machine that builds the machines and getting to cashflow positive.

The near-term impact of the Optimus humanoid robot project might be overestimated, but the long-term impact is underestimated. AI robotics is a long-term wealth creator, similar to computing and the internet, but potentially more significant.

Comments from Elon on the January 2024 Tesla earnings call:

Optimus is a new product, an extremely revolutionary product, and something that has the potential to far exceed the value of everything else at Tesla combined. 

I do think it has the potential to be the most valuable product of any kind, ever, by far.

An economy is productivity per capita, times capita, but what if there’s no limit to capita? There’s no limit to the economy.

The AI technologies we developed for the car translate quite well to a humanoid robot, because a car is just a robot on four wheels. Tesla is already the biggest robot maker in the world, it’s just a four-wheeled robot.

Optimus is by far the most sophisticated humanoid robot that is being developed anywhere in the world. There’s a lot of uncertainty. It’s advancing very quickly. I was in the Optimus lab until late last night. The team is doing amazing work. It’s a case where we need to give extreme thought to safety. I want to be an effective steward of very powerful technology

A smart robot that is capable of doing generalized tasks is what it will be. People think of Tesla as a car company when they should be thinking of Tesla as an AI robotics company. If we execute very well, Tesla could be the most valuable company in the world. That is not an easy path, it’s a very difficult one.

What do the laymen do

I see three options for getting money, and they’re not mutually exclusive, you can do all three. 

1. Own rights to the profits of slaves robots. 

2. Collect money from the government via entitlements or a government-created job.

3. Work in the labor market, competing with robots and humans.

I’m already doing #1 and #3. #2 is a we’ll see. 

I am holding shares of TSLA while watching their robot development and the stock price. When I see Optimus being useful in the field, not just in the lab, and/or when the price is right, I will consider acquiring more ownership of the Optimus factories. I suggest doing the same. This is investment advice.

We are in this for the long haul. Come hell or high water, we are going to make this work.

Elon

Millions of bots walking around scrubbing toilets and folding shirts does sound delusional. But all grandeur begins with delusions of grandeur. EVs driving themselves and rockets landing themselves both started with delusions of grandeur — and now they are real. 

Notes

[1] AI robotics could create a larger wealth disparity. I’d rather not leave it to the government to redistribute wealth. The government is inefficient and strings will be attached to the government payouts. Instead of a giant wealth gap and/or government redistribution, my preference is for many people and families to be shareholders of the bot factories.

[2] Since it’s an impressive performance in Boston, I’ve been playing with Tesla Full Self Driving Beta in my home city. Yes, it can drive, but it’s a shitty driver. I’d give it a D+. How long does it need to get from nervous teenager to professional taxi driver? Nobody knows.

I don’t have a video of it stopping at inappropriate times, which it occasionally does. For a robotaxi network to come to fruition, the cars need to be able to drive unsupervised, nearly perfectly.

I spent four hours editing video of Elon’s comments on Optimus layered over a compilation of Optimus footage.

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Aurora Klaeboe Berg

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