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As a car manufacturer, Tesla’s latest financial results released Wednesday were a definite (if expected) improvement on the first half of the year. Instead of auto sales falling 16%, as they did in the second quarter, they rose 6%. And thanks to even stronger growth in battery sales and services, Tesla’s total revenue grew 12% year over year to $28.1 billion. That would be impressive, except much of the car sales boost can be attributed to Americans rushing to buy electric vehicles ahead of the expiration of a $7,500 federal tax credit on Sept. 30.
And the improved sales didn’t translate into fat profits—Tesla’s net income fell 37% to $1.4 billion over the same period. Not that Musk is worried: He is focused on bets that look to be years away from paying off—robotaxis and the Optimus humanoid robot. Musk is betting his pay over the next few years that both products will turn Tesla into a company with a market capitalization of $8.5 trillion, up from $1.5 trillion now. But during Wednesday’s analyst call, Musk seemed to walk back ambitious targets he’d previously set for Robotaxi and Optimus.
He said Tesla is aiming to launch its Robotaxi service in “eight to ten” metro areas by the end of this year—an apparent retreat from his comment on Tesla’s last earnings call, when he said the company was aiming to reach half the U.S. population in 2025. For now, Tesla operates Robotaxi with backup humans in vehicles in Austin, Texas, and the San Francisco Bay Area. The company is aiming to remove the humans from vehicles in Austin within “the next few months,” Musk said, but he didn’t say exactly how long they’ll be needed elsewhere.
On Optimus, Musk said Tesla hopes to start production by the end of 2026. Tesla had been aiming to produce 5,000 Optimus robots this year and 50,000 in 2026, but Musk abandoned this year’s target due primarily to problems perfecting the robots’ hands, we’ve reported. The delay didn’t stop Musk from saying on Wednesday that the next version of Optimus will “seem so real you’ll need to poke it to figure out it’s a robot” and describing the robot repeatedly as an “infinite money glitch.” That’s a videogame term meaning it will become a big moneymaker.
For now, though, Tesla’s stock is not an infinite money glitch. Shares fell 3% after hours.
Robotics’ ‘Bonkers’ Valuations
Venture capitalist Vinod Khosla last month caused a stir with an opinion article in The Information asserting that most valuations in artificial intelligence were “bonkers.” On The Information’s TITV today, Khosla went further and said valuations in robotics startups were “getting bonkers…I would venture to guess 95% of those startups will lose money.”
As far as AI is concerned, Khosla said his comments in the opinion piece were “misinterpreted a little bit,” noting that valuations were “not bonkers” for the best AI companies. And venture capitalists who got into those companies at the right time will do well, he predicted.
But that’s a small bunch: Khosla predicted that 2% to 3% of AI startups will account for 85% to 90% of the valuation of companies by 2035. The message for investors: Choose well!—Martin Peers
In Other News
• The U.K. Competition and Markets Authority said on Wednesday that Google and Apple had “strategic market status” for their dominance over the mobile phone markets, opening the two tech companies to stricter regulation.
• Meta Platforms is cutting about 600 employees from its AI organization, Meta Superintelligence Labs, a spokesperson said. The layoffs come after the unit, which had about 3,400 employees as of this summer, restructured in August.
• Microsoft raised CEO Satya Nadella’s total compensation for the year ending in June to $96.5 million, up from $79.1 million last year, the company said in a filing. Most of the increase came from his stock awards, which rose to over $84 million from $71 million last year.
Today in The Information’s TITV
Check out today’s episode of TITV in which we speak with Vinod Khosla about AI’s circular financing, power demands and margin pressure.
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