Chris Camillo predicts a business with the Tesla Optimus robot worth trillions by 2030. Others do likewise including Elon Musk who says the market is for one robot per person on the earth, or over 8 billion of them. About 2 years ago Tesla announced Optimus at AI day on 21st Aug 2021, with an updated AI day on 1st Oct 2022. Optimus gained motion, dexterity and brains. Tesla developed its hardware, and actuators and demonstrated tasks such as sorting balls, holding drills, and folding washing. More recent announcements by a slew of companies show robots are here.
What’s the basis of a $10 trillion valuation? Herbert Ong interviewed Chris Camillo from Dumb Money (YouTube video titled Tesla First $10T Company Ever on the YT channel Brighter With Herbert video here. Or read Chris’s X Post here in full. A key observation is this quote.
Tesla’s humanoids offer a solution, not a replacement for humans. Musk warns of a population collapse riskier than global warming. Our future? Optimus bots tackling the skilled labor shortage.
Chris’s Camillo X Post https://x.com/ChrisCamillo/status/1749865701597233309
They are not the first. Tony Seba from RethinkX explains 3 disruptions, 8 Technologies of electricity, food and transportation. Cathie Wood from Ark Invest describes 5 disruptions 13 Technologies and both focus on AI and Robotics as key technologies.
Humanoid Robot Market is Enormous
Two years ago, I wrote this article on the Value of Humanoid Robots. The world is full of robots mostly in manufacturing with an influx of more than 2.7 million industrial robots in use worldwide. These include:
- fixed robotic arms
- moving cobots
- Autonomous-guided vehicles moving materials and finished goods
Humans are still needed to help produce the vast majority of goods the industry makes worldwide. Humanoid robots would cohabitate the human world. To date, the workplace has to be changed for robots. (Think assembly line). In contrast, humanoid robots are designed to work in a workplace that has been designd for humans. They need to walk, carry, undertake precise movements, and co-exist with humans. Humanoid robots are designed to do human tasks without changing the human task or environment.
Others Value Tesla Optimus Robot worth Trillions
Humanoid Robots may first focus on the 3D’s = Dirty, Dangerous and Dull
- Humanoids have the potential to be the largest industry in history. Larger than any other industry
- Tesla is positioned to leverage and monetize this new sector.
- Tesla is on track to produce an industry-leading humanoid in the next two to three years
- Tesal has manufacturing expertise, missing in other robotic companies. Tesla is world beating build the machine that builds the machine!
Other commentators such as CEO of the dozen or so human-robotic companies (See Humanoid Robots are Coming). Cern Basher on X (https://x.com/CernBasher) has multiple scenarios for Tesla’s humanoid robot opportunity and calls it the Boundless Optimus Transformation at Scale (“BOTS”) Model for Tesla, and he estimated initially a value over $18 trillion. Part of this is Tesla said the cost would be under $20,000 and Musk stating more bots than humans.
Will probably be worth significantly more than the car side of things long-term. I think we might exceed a one-to-one ratio of humanoid robots to humans. It’s not even clear what an economy is at that point.
Elon Musk, Investors Day 2023
Valuation Models Are Imprecise
The table comparing the scenarios from Camillo versus Basher shows an order of magnitude difference. Camillo has a high-cost solution of $16 per hour, and Basher at $2.50 per hour. Manufacturing costs are 3x in Camillo vs Basher. PE values are 3 times higher in Camillo. Camillo has a slow uptake to 1.5m and Basher predicts up to 100 million by 2030 (If Tesla can produce 20 million cars, 100 million robots would be possible).
Camillo models 1 sector, warehousing, predicted to have 2.5m vacancies by 2030 . The outcome is very high value for both. Which is correct? Most predictions are wrong. Choose your own version.
Humanoid Robot Comparisons
| Assumption | Chris Camillo DumbTV | Cern Basher BOTs at Scale | Randy Kirk |
|---|---|---|---|
| Business Model | Robots are leased out at $16.80 per hour for 16 hours per day, 350 days of the year. I.e. Labor hire model. Average wages is betwen $10 and $40 per hour for blue collar worker | Bots are leased out $1,200 per month or $14,400 pa $2.50 per hour. | Bots leased at $60,000 per year to replace 2 workers at $50,000 each plus on costs. No stealing, no safety issues |
| Numbers deployed | 1.5m over 3 years, starting in 2027 with 1.5m in operation. Lots of pilots over next 2 years. | Sensitivity scenarios ranging from 1 million to a billion. | 10,000 in 2025 Production of 40 per day. |
| Sector focus | 1 sector logistics / warehousing More than 1.5 m vacancies in logistics in 2023, 2.5 in 2030 | Price would appeal to all sectors – including person care. | Where hiring staff for dirty, dangerous or dull jobs |
| Manufactured cost | $30,000 Between $40,000 and $10,000 Tesla makes an EV for less than $40,000 At $30,000, and 1.5m is $45 billion cost of production (over 3 years) Tesla has capital. | $15,000 Musk stated robot = <$20,000 | $6,000 to $10,000 The 34 actuators are the majority of cost. Manufacture these at scale. Rest of construction is trivial. |
| Amortised life | 6 years | 10 years | |
| Lease and operating costs | Annual upkeep of $8,000 ie. annual $12 billion cost | 12.5% cost | |
| Revenue | $141 billion per year | $9,585 per bot. | $6 billion in 2025 (10,000) $60 billion in 2026 (100,000) $180 billion in 2027 (300,000) |
| Annual Operating Profit | $129 billion | $5, 893 per bot (after tax, 41% net margin) | |
| Market Valuation | $10.3 trillion based on PE of 80 | $0.177 trillion based on PE of 30 | |
| Comparison of Market Valuation with 1.5 m bots, PE of 30 | $3.8 trillion (PE=30, 1.5m bots) | $0.26t (PE=30, 1.5m) With 100m bots = $26 trillion | Similar to Camilllo, but 3 years |
The table includes included Randy Kirk with guest Dr Scott Walter who claim from this YouTube Conservatively $60B Profit in 2026; Elon Musk Strategic Vision for Optimus Humanoid Bot with their assumptions.
Chris Camillo vs Cern Basher vs Randy Kirk.
Labour Shortage, Not Labour Replacement Initially
One key rationale is for humanoid robots to address the labour shortage in Western countries. With peak birth a decade ago in most countries, most countries are facing population aging and reduced population (China, Japan, Korea, Australia, UK, and most EU countries).
Who does the manual work? Migrants? Or humanoid robots? Most Western countries have increasingly anti-migrant policies, so migrants from other countries are politically fraught. The 600,000 migrants into Australia in 2022-2023 put pressure on housing and services, yet most provide much-needed workers. The rise has engendered political heat. Similar politics are playing out in most countries.
Camillo reports from a 2021 Deloitte and The Manufacturing Institute study which state the warehousing sector expects to experience 2.1 million unfilled jobs by 2030. This sector could absorb 1.5m robots.
Countries with Labour Shortages
Another graph from Korn Ferry report.
Cern Basher Model
Cern has provided a more detailed analysis of his BOTS model.
Competitors
China is shamelessly copying Optimus and other robotic companies. What will be the outcome with multiple suppliers?
- The market for humanoid robots could be larger than human population
- Each use cas
More Reading and References
- The $8.5 Trillion Talent Shortage https://www.kornferry.com/insights/this-week-in-leadership/talent-crunch-future-of-work
- Chris Camillo X Dumb.tv
- Deloitte and The Manufacturing Institute 2021 Creating pathways for tomorrow’s workforce today https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-industry-diversity.html/#the-problem
- RethinkX – This time, we are the horses: the disruption of labor by humanoid robots 2024 https://www.rethinkx.com/blog/rethinkx/the-disruption-of-labour-by-humanoid-robots
