2 days ago
As Elon Musk Invests In Optimus' Robot, What Value Do Robots Really Bring?
When Elon Musk says Tesla will one day be worth more than Apple and Saudi Aramco combined, he's not talking about electric cars. He's talking about robots.
At Tesla's annual shareholder meeting, Musk doubled down on his bet that Optimus — the company's humanoid robot, seen cozying up to Kim Kardashian in a photo shoot last spring — could one day power a $25 trillion market cap. That's right: trillion with a 'T.' It's an audacious vision, built on the belief that general-purpose robots will not just complement human labor but replace vast swaths of it. He has projected hitting sales of a million humanoids a year within five years, priced under $30,000 each, making them a seemingly irresistible source of replacement labor for flesh and blood humans.
But before investors recalibrate their spreadsheets, it's worth asking a more fundamental question: What are robots actually good for?
BEIJING, CHINA - APRIL 19: Humanoid robot Kuavo falls in the Beijing E-town Half-Marathon and Humanoid Robot Half-Marathon on April 19, 2025 in Beijing, China. Tiangong Ultra, a humanoid robot, ran across the finish line while securing the first position during the Humanoid Robot Half-Marathon. (Photo by Song Jiaru/VCG via Getty Images) VCG via Getty Images
Shortly after Musk's bold prediction, China hosted a widely publicized ' robot marathon ' to showcase the athletic prowess of humanoid robotics. Dozens of bipedal machines shuffled across a track in full view of TV cameras. Most promptly fell over. Others sputtered forward in stiff, jerky motions. A few actually made it to the finish line.
The spectacle was unintentionally hilarious, providing a sense of relief to those who worry that technology is advancing faster than regulations can be drawn up. But the videos from the half-marathon proved that, despite tens of billions in investment, even the most basic functions of mobility and dexterity remain elusive for general-purpose robots.
This is not to say that they aren't getting better. They are. And quickly. But there's a meaningful difference between a humanoid robot that can wave in a demo video and one that can reliably sew a button, deliver a package in the rain, or assist a senior citizen in the bathroom — all without human intervention or constant and expensive maintenance.
For all our Jetsons-fueled fantasies of household helpers, the fact is that the more realistic short-term wins for robots will come in controlled environments. Think: factory lines, warehouses, clean rooms, and hospitals — places where the tasks are repetitive, the variables are limited, and the ROI can be tightly measured.
This is why Amazon, a company with no shortage of capital or AI talent, has largely shunned humanoid form factors. Its investments have focused on task-specific robotics like mobile carts, pick-and-place arms, and automated sorters, with a robot fleet one-million strong laboring in its warehouses as of June. In China, companies like DJI and Huawei are leaning into robotics for logistics, surveillance, and industrial automation, areas where the technical hurdles are lower and the use cases immediate.
Humanoid robots are still chasing a (literally) moving target: the complexity of the human body. And that's not a race you win with iterative updates.
But the challenges facing robotic adoption are not just technical. They're also political, regulatory and cultural.
In the United States, the specter of labor displacement looms large. Since President Trump campaigned on the idea of revitalizing domestic industries, many people are waiting for him to deliver on his promise of bringing back jobs to American workers, particularly in manufacturing, mining and other traditionally labor-intensive sectors. The introduction of advanced robotics into these industries complicates that promise. How do you deploy robots in a way that doesn't provoke backlash from unions, policymakers, or a public already anxious about AI's impact on jobs?
China, by contrast, has been more aggressive. Facing a shrinking labor force and rising wages, the government has embraced automation as a necessity rather than a luxury. Subsidies for factory automation, pilot programs for robotic caregivers, and fast-tracked approval processes are signs that China views robots not just as a technological opportunity, but as an answer to long-term demographic decline. Humanoid robots manufactured by UBTECH Robotics are already being deployed on a trial basis to assemble Apple phones for Foxconn and electric vehicles for Zeeker and BYD. Leju Robots' humanoids have been used to dole out medicine in eldercare facilities.
That said, China's robot revolution has stayed mainly within industrial bounds. Consumer-facing robots remain rare and, as the marathon made clear, still far from mass-market ready.
SHANGHAI, CHINA - SEPTEMBER 5, 2024 - Spectators look at Tesla's Core Technology Optimus humanoid robot and a cybertruck off-road station car at the Bund Conference in Shanghai, China, September 5, 2024. (Photo credit should read CFOTO/Future Publishing via Getty Images) CFOTO/Future Publishing via Getty Images
This is the geopolitical wildcard.
On one hand, the United States has the lead in core technologies: chips ( Nvidia ), software ( OpenAI ), and platform companies like Tesla and Amazon willing to make enormous and speculative bets.
On the other hand, China dominates hardware manufacturing, has a more unified industrial policy, and may have fewer legal or ethical constraints on robot deployment. China's National People's Congress announced a 1 trillion RMB ($138 billion US) investment fund in robotic development this spring, and the country has already displaced Germany as the leader in industrial robotics, with 54% of global installations, according to the International Robot Federation .
Robots have also become a cultural phenomenon in China, with Unitree's robots dancing alongside human dancers on CCTV to celebrate the Spring Festival , facing off in a kickboxing contest in May, and playing in a soccer tournament in June. While many of these stunts seem goofy, they have caught the attention of Tesla's Elon Musk, who commented on a recent earnings call that 'I'm a little concerned on the leaderboard [of top robotics companies], ranks 2 through 10 will be Chinese companies.'
Meanwhile, Japan and South Korea have decades of expertise in robotics research and development and are quietly advancing in areas like caregiving and surgical assistance.
Investors are watching closely, and VC capital is flowing into startups like Figure AI, Sanctuary AI, and Agility Robotics, each promising humanoids with varying degrees of autonomy. Over $100 billion in VC funding has flowed into robotics startups since 2018, with about half of that going to U.S.-based companies and a quarter to those based in China.
Analysts at Citigroup recently predicted that the global population of robots will explode to 1.3 billion by 2035 and 4 billion by 2050 - making Musk's predictions seem circumspect by comparison. Citigroup expects humanoid robots to be deployed in households, manufacturing and construction sites, and hospitality as replacements or enhancements to human labor.
The Promise and the Pitfalls
Let's be clear: Musk's $25 trillion vision is not impossible, but it's also not imminent. It assumes not only that Tesla will succeed in building and deploying humanoid robots at scale, but it will dominate a category that is only just coming into existence.
The reality is that we're still early. Robots are coming, but the path from prototype to productive form is longer than most headlines suggest.
So, what are humanoid robots good for?
Right now, they're good at opening wallets, raising valuations, and firing our collective imagination. In the future, they may be good for changing the very nature of labor, economics and even geopolitics. But for investors and policymakers, the challenge is to identify and back the players who will be able to walk as well as they talk.
