Tesla's Optimus faces new threat as OpenAI enters robotics

Yahoo Finance Senior Autos Reporter Pras Subramanian joins Market Domination Overtime to discuss Tesla's (TSLA) new robotics competition in OpenAI (OPAI.PVT).

Tesla stock moving lower as the company's robotics business seemingly faces a new threat. Let's get to Yahoo Finance's Pras Subramanian for the very latest. Right Pras, who is this new threat?

It's OpenAI. Um Sam Altman over the weekend in a tweet said he's entering the robotics business. Uh they're going to actually look to do things with uh long tweet here, but basically getting they they used to have a robotics unit, they shut it down but now they're kind of getting back into it their own in-house, uh obviously building robots and then for various tasks and you know, because they have their own, you know, foundational model here, uh you have the software potentially to to put into these robots and I guess that's why, you know, I'm surprised the Tesla stock move is so is so severe here, you know, based on a just an announcing of a new division and trying to hire people. They haven't even hired people.

Do you think Do you think it's just like it's OpenAI so it's just some type of instant credibility and Sam Altman he's got all the access to capital he wants. Is that it?

I think so. I think it's I think it's it's the most popular AI model right now, right? that people use chat that LLM model people use right now. It's it's OpenAI. It's ChatGPT. You have something that you can derive from that. You have all the engineering uh wealth of experience there. You have the money, the pure money they've raised. That's probably what the the threat is to Tesla's Optimus business model. I guess what that's what on.

Did did Sam Altman spell out exactly what he wants to build here?

He was saying something along the lines of, you know, creating humanoid robots that quote, help people in the physical world, starting with skilled labor on infrastructure projects and scaling to, quote, personal robot for everyone. So that's sort of what Musk is telling right. Each one of us will have our own robot. That's the the vision of having these humanoid robots that are, you know, they're smart that can talk to us, do whatever we want, handle tasks around the house, uh do bigger tasks, maybe, you know, construction, things like that. I think that's what's happening here and that's the future that Alman's talking about.

It is interesting, OpenAI is obviously great at software, but he's, now Altman, if you're talking about robotics, hardware is hard and expensive.

Yeah, I mean exactly. I think it's a really good question you ask because we haven't seen anything yet, right? Uh, they're still hiring. You know, they're so far behind in terms of, you know, we talk about Musk and and Optimus, they're going to start ramping that up soon, but OpenAI is so far behind, but they have some deals with certain robotics companies, one of them being um Figure AI, I believe. And Figure has been putting robots in certain uh manufacturing situations and they've been working there and doing stuff. So, maybe they can leverage a little bit of that uh relationship with other existing companies or even, you know, maybe you just bring them on board, right?

Well, where is Optimus right now, by the way, uh in terms of rollout timeline?

So, all we know now is is production will start sometime in 2026, right? So this quarter, they shut down the Model S and Model X vehicles at Tesla's Fremont plant to begin the the installation of the equipment to make Optimus in those spots at Tesla's Fremont factory. So, that's happening now. We'll probably, they'll probably start production around the time that they reveal the new Gen 3 robot, which we think Musk was saying July, late August, early August, July, something like that. So maybe we'll see that then. And I think that's sort of the the baseline. And I think Musk said a while ago that maybe 10,000 robots this year would be would be a would be a target.

All right. Thank you, Pras. Appreciate it.