Thank you everyone. As I said before, this is a lot different than convention hall in Asbury Park. Today we're privileged to have Elon Musk join us virtually, and there couldn't be anyone more appropriate to speak to today when the theme of our conference is changing lives. There's no one who's changed our lives more than Elon, especially changed our lives financially, but changed everyone else's lives, and that really feels like it's just beginning. Without him, there'd be no electric vehicles. There'd be no FSD. Has anyone ever heard of full self-driving five or 10 years ago? Has anyone ever thought about that? Reusable rockets, no one has been able to do that before. Congratulations to Jeff Bezos for accomplishing it yesterday. First time. We've already done 5,000 flights and we have 9,000 satellites, I think, on the way to 15,000. And the people who did that for him did it for Jeff are people who used to work at SpaceX but couldn't go fast enough for Elon, so now they went over to Bezos. There would be no Starlink, no Optimus. In fact, one of the first questions I wanted to ask is I was telling my assistant about Optimus before and how the plan is to go from a million production next year to 10 million the following year to 100 million to a billion. And what she asked me was, well, where's the room for them on the sidewalks? Are you going to build something? Is that the idea behind the Boring Company, to go underground for the robots to walk around or fly above? Where's the room for them?
Well, actually, you can fit all of humanity on one floor in the city. That's how small the humans are. An octopus doesn't mind being packed densely. So it's always helpful to think how much room do people take. And this is why I think just having it in the back of your mind that all 8 billion people on Earth can fit on one floor in the city of New York. So playing another way, if you're flying across the country and your goal is to drop a water balloon on someone, you will fail because it's empty. We used to do that when we were in eighth grade. We got them though. So Kaitlin, don't worry, there's enough room.
So one of the things I think about when you talk about Optimus is that there are so many functions that it can perform. What's going to be left for humans? Is there a job that humans are going to have other than just living in this great abundance that you're going to create? What's going to happen?
Well, I think there is this question of how do you find meaningful purpose if the robots can do everything. But we see lots of examples where even though machines can do much better, humans still enjoy it. For example, athletics, or let's take a mental sport like chess. The computers are so good that your phone, not even connected to the internet, can beat Magnus Carlsen easily. But yet chess is at all-time highs in popularity. So clearly machines being better than us at something doesn't mean we derive less satisfaction in doing it.
By the way guys, the connection isn't that good with a phone. Is there some way we can do something else? It's a bit echoey. The connection isn't that good. I think it keeps cutting in and out. Can I talk from this? So it goes. Okay, you do that and I'll do this. So the functions that you see these robots doing, what are they going to do? And why are we going to have a billion of them when we have eight billion people?
It's going to take us a minute to make a billion robots. But I think we will ultimately have billions of humanoid robots. A way to think of it is, who on Earth would not want their own personal R2D2 or C3PO? Pretty much everyone wants a C3PO, but even better. Your personal helper buddy robot. It would be great. You could teach your kids, take your dog for a walk, get the groceries, chat, protect you when needed. And then how many robots would there be in industry providing products? Probably three or four to one relative to humans, which suggests the total number of robots will be somewhere around maybe as high as 40 billion, maybe 30 billion robots. It's a lot.
The Japanese company KUKA has robots that are used in manufacturing, 50,000, 100,000, 150,000. And you're describing a robot at $20,000. Do we have to have a million a year to do that or 10 million a year to get to $20,000? And is that something that's going to be affordable for people? Are they going to be rented? Are they going to be purchased by corporations? Are we going to get some kind of carried interest once they buy them from us? How is this going to work, or don't we have the model yet?
My rough guess is that the cost of goods sold, their labor and materials for Optimus, after we reach a million units of steady state production, so call it a year after reaching a million units a year, because it takes a lot of effort to improve the cost. But at that point, I would expect the labor and materials to be $20,000 to $30,000 in current year dollars. I think that's a pretty safe estimate when you're improving costs.
So with cars, your idea is that everything we buy from other people to use in our cars, we know exactly how much it costs and therefore we can tell someone how much we're going to pay for what we're buying from them. And if they're making too much, then we make that stuff ourselves. Is that the same kind of idea we have in this robot? It should be much simpler to make than a car, or am I wrong because of the hand?
The hand is extremely complex. There are 50 actuators in the hand and forearm. An actuator is the motor, gearbox, and power electronics. So that's 100 per robot. A lot of actuators and sensors. So it's a lot of complexity.
Why is that important? Why is it important that we have such a complex hand?
In order to do dexterous tasks, you have to have a hand with the sensitivity, precision, and degrees of freedom of a human hand. Something that we find easy to do, like pick up a screwdriver, turn a wrench, thread a needle, or play the guitar, actually require a lot of dexterity. One of the reasons we think we can achieve sustainable abundance, which is the revised version of the company's goal, because it was accelerate sustainable energy, which as you mentioned we've done. Our new goal is sustainable abundance, abundance for all, but in a way that is sustainable and does not destroy any of the natural wilderness.
How do we decide who gets what? Somebody wants to buy my house, they can just come in and start living there.
Well, I'm not sure why. I mean, I do have a nice house, so I can certainly see the appeal. But the robots will be able to make anyone a house. As long as you don't insist on it being in a particular location, robots will be able to build you a castle if you want. The reason for hand dexterity is you want to be able to do surgery and precision medical actions. Imagine a world where everyone has access to the best surgeons, literally everyone. Optimus will have a level of precision that is frankly superhuman and will be able to do medical procedures, any medical procedure, perhaps things that humans can't even do because they're too difficult. That will be available to anyone. You hear people often talk about eliminating poverty and providing great medical care, but they never actually have a solution. Money doesn't solve it because there are only so many great doctors and surgeons. They don't grow on trees. But now they will get built in factories.
I sent you a year or two ago an article about a young man who was in an interview in Barron's. He was 33 at the time and had become a portfolio manager. He lost his legs to a flesh-eating bacteria. He said, 'Is there anything we can do to get him out of the wheelchair?' And you said, 'Yes, there is. In three or four years, we can give him an Optimus body and then use transistors in his brain to let him function as a normal person and dance and sing and walk and run.' Have we been able to make progress in that area?
Yeah. So that's a combination of two of my companies: Neuralink and Tesla. Neuralink is also making good progress. It now has over 10 patients with Neuralink implants. These people who didn't have the ability to move their arms or legs, in some cases were completely locked in like Stephen Hawking, can now communicate almost as quickly as we're communicating right now, which is very cool. That's going to continue to accelerate. So what we can do is use a Neuralink implant that takes signals from the motor cortex of the brain and also receives signals from the somatosensory cortex. Then you have someone who's lost their legs with Optimus legs. We're really getting like the $6 Million Man. We can actually give someone superhuman cyborg capabilities like the $6 Million Man, but for much less than $6 million in this day and age. It might be like $60,000. You can take signals from Neuralink, the mind transmitting to the legs, and transmit those to the attached Optimus robot legs, and he would actually be able to run faster than a human.
Sounds really exciting. Let's switch to xAI. Three years ago you were here and you had either just purchased or were about to purchase Twitter, which you've renamed X, and you were widely criticized for that. And yes, I was right. In fact, you mentioned here on stage that you didn't want to have anyone else be angry at you because you had enough people trying to kill you already. So you were buying X and it was $42 billion, I think, and you were in the process of raising money. I called you up and said I would like to invest with you $100 million in this. It was $60 million for one of our funds and $40 million for me. You said really, I said yeah. You told me that you thought I would make a double. I said, 'Well, I hope so.' But to me, it felt like you made us $8 billion in Tesla, and it would be not very appropriate if I didn't support this new venture you were doing. So we invested. Then the day that we paid the money, we marked it down 70%.
This is how I know you're a true friend, Ron. I do regard you as a true and trusted friend. The test of friendship is who supports you when the chips are down and the times are tough and everyone's against you. That's a real friend, and that's you, Ron. Thank you.
So we invested that $100 million, marked it down to $30 million, and then about a year later we started getting phone calls from hedge funds who always seem to know things they're not supposed to know. They started saying, 'I'd like to buy your stock for what you paid for it.' I said, 'I think I'd rather wait and stay in,' which I did. Then you changed the name to X and changed the configuration of the business. You bought Twitter and it came together as a social network, and all of a sudden we have a business that has incredible data. Did you buy this for the data that no one knew about? The data with 600 million people talking with each other, physical data that no one else has. Then you started Grok, which is based on our data. Everyone else doesn't have that; they got digital stuff. Then when they have Grok, we need more data centers, and you're building those. In a very short time, less than months, you built a data center which is four times as large as anyone else on the planet. 25,000 what other people had in CPUs, and we built it in GPUs, 100,000 more powerful. Now we're going to go to hundreds of thousands. The bottom line is the investment that we made, we put up more money and we have a total of $350 million invested over the past two or three years, and now it's worth $700 million. Everything you touch is like that. It's the most unbelievable thing I've ever seen. So everyone invested in technology, and we invested in the best engineer on the planet. So the vision is, did you buy Twitter because of the data? Did you have all this in your head before you did it?
Not really. I just bought Twitter because I thought it was having a negative effect on civilization. It was pushing ideas that were anti-civilizational. It had been somewhat captured by the far left. I'd say it's fair to say the radical left. They wouldn't regard themselves as such, but it was captured by a group of people whose political beliefs are those of deeply San Francisco or Berkeley, which is about as far left as you get in America. That meant it wasn't a good forum for debate because they suspended many people on the right, including the president, as you may recall, a sitting president, which is really unprecedented. So I think we need to have a public square where there's true freedom of speech. Freedom of speech is the bedrock of democracy. If there's not freedom of speech, people cannot make an informed vote. And if you cannot make an informed vote, you don't have a real democracy. So the purpose of acquiring Twitter was to try to bring it more to the center. No left-wing voices have been banned or suppressed. What we're trying to do is give equal weight to all parts of the country so that it can be a public town square where people can exchange ideas and hopefully not present violence. I think that's fundamental.
Free speech is the bedrock of democracy. It's why it's the First Amendment, because people came from countries where they could be killed or imprisoned for what they said. In fact, this is happening all around the world as we speak, even in places like Britain. So you were one of the two founders of ChatGPT and OpenAI, and it was founded as a charity. It was your idea that you wanted to make sure that freedom of speech and all the things that you deem important for good lives on our planet were followed, safety. The other founder tried to and did accomplish getting control even though it was your money. He got control. He said, 'Elon, I'd like you to stay,' and you said, 'I want to go, I don't want to be a part of this.' He offered you some ownership, and you said, 'I don't want it.' So you walked away from an ownership of ChatGPT. You're obviously not doing all this stuff for money. If it were only about money, you would have never left something that's worth $500 billion by itself. So here you're forming this new entity, Grok, to accomplish what you wanted ChatGPT to accomplish. But you think that we have an advantage in this because of the data, because of the compute, because of what? And what are you going to do with this ultimately? You talk about connecting physical worlds to digital. What does that mean?
Just going back to OpenAI for a second. The reason I founded OpenAI was because I was concerned, based on my conversations with Larry Page, who used to be a close friend of mine, that he was not sufficiently concerned about the dangers of AI. This really came to a head when at my birthday party, he, in front of a large group of people, called me a 'speciesist' for favoring humanity over computers. I found that troubling. I was like, 'What side are you on? Sounds like you're on the side of the computers. You really need to be on team humanity here.' So after that, I was like, 'Okay, this is it. We got to have some counterbalance to Google.' Because Larry doesn't seem to care if humans make it or not. So I thought, what's the opposite of Google? It would be an open-source nonprofit. That's where the word 'open' in OpenAI comes from. It means open source. I provided all the money beginning, like what was the Series A, B, C rounds, and recruited the key people like Ilya and Greg, and taught them everything I know. I even got them the deal with Microsoft with Satya initially. I got Satya to donate some time from Azure. For all that, I did not seek any financial reward whatsoever. The reason I turned down the offer for shares is because I felt like, what do you mean shares? A nonprofit is not supposed to have shares, at least last time I checked. Nonprofits are not supposed to be vehicles for self-enrichment. So that's why I turned down the offer of shares, because it didn't seem morally or legally permissible. Then with xAI, we are starting late. We're only two and a half years old basically, and we're starting from behind. We are somewhat of an underdog, but I'm pretty good with technology. We are advancing faster than any other AI. For technology ventures, the winner ultimately is the one that is able to move the fastest. So we're optimizing for the best technology, and we're doing something different than others. Others are in a digital world, and we're physical to digital with movements and visual, and other people can't match that. Also, we have the real-time data.
What does that mean? Why should we do better than everyone else? Why are we going to win? And why are we going to at least be different than everyone else so we have a really strong business?
First of all, I think in terms of being a strong business, I'm not too worried about that. Even a small player that is successful in AI will be worth a lot because they will contribute so much in productivity to the economy. There will be many companies that are worth sustainably several hundred billion dollars. So the question is how do we achieve the lead? That comes down to three things. Are you able to attract the best talent? Are you able to bring the most amount of AI hardware online? Can you bring GPUs online faster than anyone else? We've already demonstrated that we can do that. Jensen Huang himself said that he was blown away by how fast xAI's Colossus data center was built. He said there's only one human on the planet who could have done that, and that's you.
