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Musk With A Huge New Goal – To Turn Tesla Into A $25 Trillion Company

by THEFUTURE.TEAM

June 14, 2024

After Elon Musk won support from Tesla shareholders to pay out a $56 billion compensatory bonus and move the company’s headquarters to Texas, the billionaire announced his next ambitious goal: to turn the $25 trillion electric car company around.

Key Facts

The entire value of the S&P 500 currently stands at $45.5 trillion, according to FactSet. Tesla’s CEO said his company’s Optimus humanoid robots could eventually make the automaker worth more than half that amount.
Musk, who characterized himself as a “pathological optimist” at the 2024 annual shareholder meeting in Austin, Texas, said Tesla was embarking not only on a “new chapter” in its life, but was about to write an entirely “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, unveiling a dancer in a jumpsuit that looked like a sleek, androgynous robot.
In January, Tesla showed off Optimus robots folding laundry in a demo video that was immediately criticized by robotics engineers as a hoax. The robots were not autonomous but rather operated with humans at the controls.

What To Watch For

At Thursday’s shareholder event, Musk didn’t reveal exactly what Optimus might do today. He speculated that the robots would one day act like R2-D2 and C-3PO from the Star Wars movie. They could cook or clean for you, work in a factory or even teach your children, Musk suggested.

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As for shareholder value, Musk said Optimus could be the catalyst to lift Tesla’s market capitalization to $25 trillion someday.

Speaking to a crowd of mostly adoring 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 predicts, will have “over 1,000 or several thousand Optimus robots running Tesla” by 2025. All of these are far-fetched even for Musk, who is known for making ambitious promises to investors and customers that don’t come true, from developing software that can turn an existing Tesla into a self-driving, drop-in vehicle, to battery-swapping EV stations.

Big Number

Reaching a market cap of $25 trillion would mean Tesla would be worth about eight times Apple. The iPhone maker is currently the world’s largest company by market capitalization, just ahead of 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 provide a time frame for reaching $25 trillion. He said autonomous vehicles could propel the company to a market capitalization of $5 trillion to $7 trillion.

A Look Into The Future

Tesla shares have fallen 27% this year as the company expects sales to decline, linked in part to an aging lineup of electric vehicles and increased competition in China. The company has also implemented drastic layoffs. Musk encouraged investors to look beyond the current state of the business and more toward the future of autonomous driving, robots and artificial intelligence.

Taking the stage after the shareholder votes were read, Musk said, “I just want to start by saying I love you guys.”

Among his boldest claims on Thursday was Musk’s declaration that Tesla has advanced so far in silicon development that it has surpassed Nvidia when it comes to the interface, or process, that trained machine learning models use to make inferences from new data.

Nvidia shares have jumped nearly 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 operates social media company X, is the CEO of SpaceX and the founder of The Boring Co. and Neuralink. He launched another startup, xAI, in March of 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 of 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 whether we can be much faster than everybody else and have our product ready a few years before theirs and be better,” Musk said.

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Apple’s Memory Squeeze: Strategic Challenges Amid Soaring AI Demand

During a period of strong earnings across the technology sector, rising memory costs have become a recurring theme for major companies.

Apple CEO Tim Cook said during the second-quarter earnings call that memory costs are expected to have an increasing impact on the business, pointing to supply constraints alongside growing demand linked to artificial intelligence infrastructure.

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Memory Constraints Drive Strategic Recalibration

Apple reported revenue above expectations and provided positive guidance, while also highlighting pressure from supply limitations. Cook noted that the impact was limited in the December quarter but became more visible in the March period. For the June quarter, he indicated that some Mac models may be affected due to sustained demand, adding that the company is considering a range of options in response to cost increases.

Similar dynamics have been reported by other companies. Meta and Microsoft both cited higher memory costs as a factor in rising capital expenditure plans. Amy Hood said memory-related costs could account for $25 billion within the company’s projected $190 billion capital expenditure plan for 2026.

Industry-Wide Supply Pressures

Demand for high-performance chips continues to increase, particularly for AI applications, where memory requirements are higher. Companies such as Nvidia are producing chips that require larger memory capacity, while suppliers including Micron Technology, Samsung Electronics, and SK Hynix are expanding output. At the same time, allocation of memory to data centres and AI infrastructure is affecting availability for consumer devices, including PCs and smartphones.

Strategic Options Amid Rising Costs

Analysts are assessing how companies may respond to rising costs. William Kerwin suggested that longer-term supply agreements could help stabilise pricing, while other approaches may include adjustments to product configurations, selective price changes, or absorbing part of the cost within margins. Additional commentary from Laura Martin and Gil Luria points to broader industry adjustments as companies respond to supply constraints.

Outlook: Managing Supply And Demand Pressures

Apple has so far avoided immediate price increases, including in recent product updates such as the iPhone lineup, iPad models, and Mac devices. At the same time, memory availability and pricing remain key factors for upcoming quarters, as companies balance demand for AI infrastructure with supply conditions across the semiconductor market.

Conclusion

Developments around memory supply and pricing are becoming a central factor in how technology companies plan production, investment, and pricing. These dynamics are reflected across earnings reports and are likely to remain part of industry discussions as demand for AI-related infrastructure continues to grow.