(november 2nd, 2022)
By (Tommaso Ziliani & Marco Signorelli, members)
Edited by (Francesco Corbellini, Head of articles)
Introduction
On the 30th of September 2022 Elon Musk unveiled to the market the first prototype of Optimus, the new humanoid robot designed by Tesla. Once again, the company has shown the extraordinary ability of its engineering machine, which has been able to develop a technology that, in our vision, could be the starting point of the next industrial revolution reshaping the future society.
In the first part of this article we’ll provide a basic knowledge about the robot itself, explaining why it’s different compared to any other similar product on the market, and how companies could benefit from this technology.
In the second part of our analysis we will focus on the socio-economic impact of the service, assuming high production volumes and affordable prices.
The Ultimate Product
During the event we had the possibility to have a look to the first functional Tesla-bot, that walked across the stage, greeted the audience and showed some simple dancing moves. The engineering team confirmed that this first sample is simply a test candidate, a humanoid robot built as quickly as possible with the sole purpose of having a support to develop and test the software.
The article, instead, will refer to the second sample of robot presented, which Elon Musk confirmed to be pretty similar to what the first production robot will look like.
Before going into details, we think it is crucial to have a clear understanding of the priorities that the engineering team highlighted in designing the bot, which are essentially two: - Make a robot that can be manufactured cheaply and quickly with high volumes - Make an intelligent and versatile robot that is capable to move and operate in the real world, completing simple tasks autonomously.
As a consequence, the Tesla-bot won’t have extraordinary motion skills, like those from Boston Dynamic for instance, but instead is going to appear quite boring: this will allow higher production volumes at lower price. Elon Musk has repeatedly stated that, according to his expectations, the company will be able to cut costs down to a selling price of $ 20,000 per unit, which is an extraordinarily ambitious goal considering that the typical price of a humanoid robot today is between $ 200,000 and $ 500,000.
Starting from the technical characteristics, every aspect of the Tesla-bot is designed for optimized costs and efficiency, which implies reducing the number of parts and power consumption to the bare minimum, exploiting cheap raw materials like plastic and aluminum instead of titanium and carbon fiber.
The power source is a battery pack that grants a full day of activity and it’s a fully integrated battery unit, so distribution, cooling and battery management are all integrated into the pack. Tesla is leveraging its existing production line in order to obtain this product.
Optimus is powered by Tesla Full Self driving technology that is already designed to perform typical human brain tasks like decision-making and processing of video and data. We are talking about the same technology that is already inside every Tesla vehicle and allows the car to drive semi autonomously: this is not surprising given that the car itself is nothing but a robot that can navigate public roads through artificial intelligence. Source: Tesla, slides from AI Day
As a matter of fact, a computer vision system allows both the car and the robot to orient themselves by converting into 3D the input provided by 3 cameras. The major improvement required and upon which the team is still working on is the transition from wheels to legs, which requires step placement and balance. They are currently using the autopilot simulator to train the bot locomotion planning and using motion capturedata to train the robot on real humans’ movements. The computer vision system, instead, seems working pretty well already. As seen during the presentation the 3D conversion allows the computer to accurately judge distance, velocity and size, as well as recognize any object trained in the neural net.
Overall, the main goal of Tesla is to build as soon as possible a useful humanoid robot, designed to be extremely cost effective and reliable. Assuming that Tesla is able to achieve this goal, we expect the robot to be the next step in the automation of production lines and we strongly believe that this service can have a very high value proposition for manufacturing companies. Labor costs would be replaced by capex with efficiency increase: just think to the possible savings on social contributions, social security, allowances, severance pay and other similar costs avoided by implementing the use of machines instead of human resources.
Figure 2: Computer vision system in action
Source: Tesla, slides from AI Day
A Future of Prosperity
“Optimus, I think, has maybe a 2 order of magnitude potential improvement in economic output... it is not clear what the limit actually is”.
These are Elon Musk’s words, CEO and Co-Founder of Tesla, on the future potential of the automaker’s new humanoid robot: Optimus. If Musk’s prediction will prove correct, it would imply that Optimus, over the course of its existence, will add to the world’s GDP approximately $9.386 Quadrillions, given the 2021 world’s nominal GDP of $93.86 Trillions. This would obviously put Optimus as the greatest value provider in all human history, surpassing the Internet, which has been responsible for 21% of the GDP growth in the last 5 years.
We realize that many of our readers may consider such an outcome as “an improbable fantasy”, and that’s why, in the paragraphs below, we will analyze how exactly could Optimus have such a profound impact on our economy and on our society.
In order to build our theory, we have adopted the following assumption: - Tesla’s ability to achieve mass production of humanoid robots at the target price indicated during the AI Day 2 ($20k per unit).
Our reasoning starts with defining what the economy really is i.e. a function of both labour and costs of inputs of production (labour, capital, and energy), positively related with the first and negatively correlated with the latter. What we mean with this is simply that, when labour is abundant (human and/or mechanical), economic output rises. While when the costs of the factors of production increase, economic output decreases.
Therefore, the mass production of relatively cheap robots (when compared to actual human workers) would dramatically increase the supply of labour, while decreasing the cost of labour itself since Optimus would be substituted for expensive human resources. Not only that, humanoid robots also have a huge productivity advantage when compared to their human counterparts, since they have no need to eat, take vacations, or sleep.
The economic implications, both for producers and consumers, are huge: the lower cost of production combined with the increased productivity, will guarantee better margins and profits for the producers, but also cheaper prices for the consumers. In fact, as history teaches, part of the savings on production costs are always transferred to consumers by reducing prices of goods, thus allowing more and more people to afford those same goods. This would ultimately increase international living standards and overall consumption, since people will afford to purchase more goods, thus causing the enormous growth in GDP described before by Mr. Musk.
Some people may argue that in our model we did not consider the dramatic consequences that substitution of human labour with humanoid robots would have on employment, on social welfare, and on the economy. We may touch this point now: while it is true that mechanization of labour destroys lot of jobs in the short run, in the long run not only it creates more jobs, but it also increases the average real wage.
This happened in the 1st industrial revolution and the only reason why this may not happen again in the future we are describing, would be a highly advanced general intelligence capable of substituting men even in the most creative jobs normally reserved for human beings.
In our view this possibility should not be discarded given the rate of improvement of present artificial intelligence systems. Apparently, this is in line with what Elon Musk believes will ultimately happen; therefore, he argues that, in the future, the introduction of a universal basic income will be necessary.
The scenario we are describing is one of abundance and prosperity, a future where no one will have to work unless he or she wants to, a future where poverty will be extinguished, and freedom will be universal.
This future may seem far away from today’s reality, and it is good to remind ourselves that Optimus is as of now only a prototype and that the challenges ahead of Tesla are the hardest ever faced.
But what it is unforgivable is to ignore what is happening and not to imagine what may happen.
In case you would like to explore this topic further, we provide below the link to the full Optimus presentation : https://www.youtube.com/watch?v=NgfRSPTUYQk
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