What the Hell is Elon Musk Talking About?

Elon Musk is prone to strange asides in all aspects of his life, but Tesla’s quarterly earnings call earlier this week found him in rare form: Speaking to investors, the CEO droned on about everything from alien abductions to the Irish Republican Army, and seemed to signal his intent to appropriate self-driving cars’ onboard computers to turn a profit for the company when not being used. His ramblings are a little more understandable in context: After a Cybertruck recall and news the carmaker would lay off 10 percent of its staff worldwide, Tesla this week reported a 55 percent drop in profits amid declining vehicle sales.

Musk deflected from his car company’s unraveling by suggesting that Tesla is not, in fact, a car company at all. Tesla, he said, “should be thought of as an A.I. or robotics company. If you value Tesla as just like an auto company, you just have to—fundamentally, it’s just the wrong framework and it will come to be.”

Share prices were buoyed on Wednesday by Tesla’s announcement on the same call that it will indeed, allegedly, deliver an affordable car as soon as next year, allowing the automaker to better contend with competitors offering cheaper E.V.s in the U.S. and abroad. Whether or not that’ll happen remains to be seen.

Musk’s other rants during the call, however, should raise some questions not just about Tesla itself, but about the U.S. government’s abundance of contracts with Musk’s business empire, including at least one classified contract worth nearly $2 billion.

Musk doubled down on his excitement about so-called autonomous vehicles and the promise of A.I. At one point, he suggested that autonomous vehicles might serve as roving data centers, whose “excess” computing power—when not navigating roads—could be commandeered by Tesla to further “monetize” the cars. Musk outlined eventually having a fleet of 100 million self-driving Teslas as part of a ride-hailing service. There will be “some number of cars” used in that fleet that would be owned by Tesla directly. Tesla owners, though, could also enlist in the service to give rides to friends, family or strangers, “like an Airbnb.”

Ashok Elluswamy, Tesla’s director of autopilot software, elaborated that “unlike laptops and our cell phones,” self-driving cars’ computing power would be “totally under Tesla’s control. So it’s easier to distribute the workload across different nodes as opposed to asking users for permission on their own cell phones,” which Elluswamy called “very tedious.” Tesla chief financial officer Vaibhav Taneja added that capital expenditure for all that computing power in such a scenario would be “shared by the entire world, sort of everyone wants a small chunk, and they get a small profit out of it, maybe.” It wasn’t clear from the call whether only Tesla-owned-and-operated cars’ computing power would be monetized, or if vehicles owned by drivers and then rented out to the company’s “cyber cab” service would be utilized, as well.

Musk also said that Optimus, the humanoid robot Tesla has been developing, ostensibly as a means to automate factory operations, will be “more valuable than everything else combined,” seemingly in reference to the rest of Tesla’s offerings. “Because if you’ve got a sentient humanoid robots that is able to navigate reality and do tasks at request, there is no meaningful limit to the size of the economy.” The same technology, he said, could constitute a “terminator-level risk” and “follow you indoors” if “there’s not some meaningful level of influence over how that is deployed.” He said he hopes to start selling Optimus by the end of next year.

Tesla’s greatest contribution to the world, Musk said, will be “solving autonomy”—presumably by making and selling a bunch of robots. Is “autonomy” a problem that needs solving? If it were, would a flailing car company be up to the task?

It’s not clear what sort of transformative potential autonomous vehicles like Musk’s beloved robotaxi are meant to have for the whole of society. Investors, though, have plenty of reasons to be interested in their potential: to cut down on labor costs by having Optimus do workers’ jobs for free; to automate certain kinds of transportation, subbing out freight truck drivers with self-driving vehicles; to rent out server space, potentially externalizing the costs of powering it to drivers. Reasonable people ought to be skeptical about Tesla’s ability to pioneer some new industrial revolution in workforce productivity wherein robots take all the jobs, and skeptical about the idea that such a future will ever come to pass.

Investors, though—like Musk himself—can be pretty dumb. And Musk’s rants about terminators and humanoid robots, while presented to them as the murmurings of an eccentric genius who likes sci-fi a little too much, are clearly also an attempt to sell peeved investors on a suite of products that could make them money. If they want to go all in on Musk’s fantasies of a robotic future, so be it. The United States government, however, might want to reconsider handing the companies run by this unreliable crank such lucrative, high-stakes contracts.