Is Elon Musk's robotics vision too far-fetched? Plus, the advantages of industrial robots

Hello and welcome to our special Bought and Sold, Investing in Robotics, where we bring you everything you need to know about the budding industry from the top robot stocks to invest in now to Tesla's plans for a robot-fueled future and an industrial robotics company that just raised a hundred million dollars. We kicked off 2026 with the biggest conference in tech, CES, where robotics stole a show. Look at all these friends that we have building robots. We're building big ones. Like I said, nobody's as cute as you guys are, but we have Neurobot and we have Agibot over there. We have LG over here. They just announced a new robot. Caterpillar, they've got the largest robots ever. Today, AMD processors power factory robots with micron-level precision, guide systems that inspect infrastructure as it's being built, and enables less invasive surgical procedures that speed recovery times. And we're doing it together with a broad ecosystem of partners. We focus on building human robots that people can trust and accept. For us, acceptability means beauty, grace, and safety. GeneOne is Italian by design. Is it really Italian? I think the next step is you can build something that has a brain now, takes advantage of all the AI progress that we've made over the last several years. You combine it with the motion, and now you can build a special purpose robot that does special things. The nirvana then is to have a general purpose humanoid that does all kinds of actions that can think and perceive and see like a human being. We've spent the last few years focusing on digital AI, but we're entering a new phase of the AI trade, and this one may be more tangible. Robotics and automation are moving from flashy demos to real revenue, from factory floors to defense systems. For more, Derek Ann, Senior Investment Strategist at Craneshares. Derek, it is great to see you. Maybe start, Derek, at kind of a high level. I'm just curious, Derek, when you're talking to investors about robotics, obviously a sector and industry that you think about a lot. You know very well, Derek. Do you feel like investors have a firm grip, Derek, on robotics as an industry in terms of just where it is, how it's evolved, and where it's headed? Yeah, thank you for having me. I think investors have been talking about robotics for many, many years, but traditionally, people thought about robotics. People think that's industrial, like industrial arms, like automation in the factory, but that's outdated. So, those automation is kind of like the past 10 years and now slowing down. We think the next phase of robotics really centers around the last mile of automation, which is around the humanoid and embodied AI technologies. So, because I think many industry leaders, they have noticed the AI breakthroughs in foundational models, in the models in robotics, that's improving a lot, and it's improving every day. And that adds value to now you have general purpose humanoid robotics that can solve many problems, including our labor shortage today and aging population. So, that's kind of the next phase of the robotic growth. Where do you see, Derek, I'm just curious, in terms of right now, where do you already see revenue really scaling when it comes to robotics? Are there certain sectors you would say, listen, the growth is there, you can see the trends, whether it's maybe it's healthcare, Derek, or logistics, or is it manufacturing? Yeah, I think now the commercialization is the key because everyone is doing models, like Tesla is doing model. You heard like AGI bought, you have like Unitrix from China. There's so many model company, but every model is now testing their robots in the factory, in the warehouse, in logistic. I think Amazon is using a lot of those robots now in their packaging and delivery testing. So, many use cases, traditionally, I think in a factory, but now in logistic. But for humanoid, I think something can be bigger, like in the service sector, right? You talked about hotels, you talked about the restaurants potentially going to our home. So, in the long run, the total addressable market is much bigger compared to the traditional robotics opportunities. So, a lot of opportunity, Derek. I'm also curious where you see the risk for this sector, for this industry going forward. In broad strokes, Derek, is it valuation? Is it cyclicality? Is it regulation? Well, I think like now there's a lot of opportunity around the humanoid ecosystem. You think about the ecosystem, there's the brain, right? A brain is like a lot of AI models, a lot of semiconductors. Then there's the integrators, like in the Tesla, like in South Square, there's Rainbow Robotics, there's like UB Tech. So, those integrators now is very early stage, but they are ready to commercialization. We think the real opportunity right now is in the body, in the components. So, actuators, the models, the motion control, those companies now is the core for investing in robotics. And they're kind of like the pick and shovers at this stage. So, I think like if you think about the S-curve for robotic investment, I think the risk is that we're missing out the kind of like the early part of the investment. So, many companies, I don't think they have been scaling their production. If you think about Tesla, they've been promising a lot of delivery on Optimus, but now that's going to be delayed. I think like the timeline can be too long, then the investor lose their patient. And that could be like a real risk for the humanoid and also the robotic space. I'm curious, Derek, where do you think, which nation state do you think leads right now? I mean, from your vantage point, would you say it's the US? Would you say it's China? I'm interested where you see the most innovation occurring. I think there's like two kinds of innovations here. The US, without a doubt, is leading in the AI, in the models, in the intelligence part. We have the best researchers and talents in Silicon Valley providing the large-scale model, also the world model that's driving the progress of robotics. But I think in China, they're leading something else, especially around the manufacturing, delivering the robots in a very cost-effective way. We have seen that this collaboration can make a lot of success, right? Think about like all the, like Apple is a great example, but I think going forward, if you want to see the robotic to be successful, you not only need very high-level intelligence, but also you want it to be affordable so everyone can use it. So like if you can think about China, they can make like electric vehicles and drones so affordable. So for humanoid robotic, China actually has a better advantage in the long term in terms of making this a very scalable business. In terms of opportunities, Derek, you mentioned some names. I just want to dig into it a little bit more. One you really like, Rainbow Robotics. Walk me through that name. What's the mission, the purpose, Derek, and the competitive advantage there? Yeah, so I think like this is something I'll call it, this is national security for each country. So Rainbow Robotics is a Korean-based humanoid company. They are backed by Samsung Electronics. So think about like the risk is really the scalability and also commercialization. So being backed by Samsung allows Rainbow Technology has potential to really commercialize within the Samsung's ecosystem. Think about like using humanoid for Samsung's manufacturing going forward. That's going to unlock a lot of opportunity, I think, for this company. So Derek, you mentioned integrators like Rainbow Robotics, the brain of humanoids, you put NVIDIA in that camp. You also mentioned the body and you mentioned a firm called Regal Rexnord. Walk me through that one. Yeah, Regal Rexnord, they actually think about that as like probably like boring traditional like industrial company, but actually they provide like the actuators, the models, those like motion control, which is very important for the humanoid ecosystem. Think about the body. I think right now, especially in the US, there is a lack of suppliers for those actuators, for those like bearings, for those components. If you want like Elon Musk to build like a million humanoid going forward in the next few years, you will need those components badly. So investing into the industrial AI is kind of like the next wave, I think. So this company actually represents that critical mission to really supply the components for humanoid. Derek, so good to have you on the show today. Thanks for your time and those picks. Thank you. Coming up, we dive into Tesla's plans for its robotics unit. That's next. Tesla has made clear its keen focus on robotics. CEO Elon Musk stating in late January that the company is moving into a future that is based on autonomy. Investors and industry watchers now weighing whether Tesla's progress could unlock a new growth frontier. Joining us to discuss is Tesla shareholder Ross Gerber, who is CEO and president of Gerber Kawasaki Wealth and Investment Management. Ross, it is great to see you as always. So listen, Elon Musk has made it clear, Ross, the future for his company, it's an army of humanoid robots, robots with all kinds of work, right? They're going to work in factories. They're going to perform surgeries. Musk saying humanoid robots will be the biggest product ever because everyone is going to want one, he says, or more than one. Are you a believer, Ross, in that Musk You know, it's it's funny because actually, the background, my housekeepers are leaving right now and they do a phenomenal job at all the things this robot would do. And it already exists. So are we making something that's needed? Actually, I don't know. But I think when I ask people, would you want a humanoid robot in your house and kind of walking around and recording everything you say and do and following you around? You know, many people don't like this idea in theory already. And I say, like, if it worked as good as a human and it just did everything for you, you wake up in the morning, breakfast was made. You know, everybody was like, sure, we would love this. The problem is, is it's really, really, really hard to do. And, you know, he's saying he's got a model that's going to be out in this next quarter. You know, I'm like, come on, dude. You know, the thing can barely walk pretty good. So I think we're a long way off from having a robot that can work and function like how humans function. Let's put some numbers on this, because I reached out to Andres Shepard over at Cantor. Listen, tell his clients Tesla's a buy. He's a fan. On that humanoid robotics market, here's some numbers Andres gave me. He estimates the global market grows from 2.9 billion in 2025. It goes to 15.3 billion by 2030. So if that's right, that would represent something like a 39% CAGR. I also spoke to Adam Johnson. Now, he's a smart guy. He's a Tesla shareholder. What was interesting, Ross, is I try to get Adam going about the EV business. Not interested. Not interested. For him, it's all about robotics. It's why he's in the name. Take a listen to what he told me, Ross. They're going to charge $50,000 per robot. They're going to make net $20,000 per robot. Well, just do the math. One million robots, $20,000 of profit per robot. That's $20 billion in profits. Net income. In 2022, the year they sold the most number of cars ever, the profit was $13 billion. OK, so do the math. In two years, they're going to make $20 billion plus the EVs. My point is they'll make far more money selling these robots than they have ever sold on the EVs. That's why you own Tesla. $20 billion, Ross. That sounds pretty good. What do you say to that? I don't think that sounds good at all. I mean, that's what Google makes in a quarter. I mean, is that some sort of big number I'm supposed to get excited about? I mean, we're already doing four or five X that with NVIDIA. So if you're losing a $15 billion profit EV business to make robots for $20 billion, that actually sounds like a really bad idea. You know, it's not like the EV business is just staying the same. The EV business is dying. I mean, he's literally canceling the best car that they've ever made. So we know that they're all in a robotics. But to just extrapolate out that the EV business will still be pumping out cash, that's wrong. So we're switching from an EV business to a robotics business that may make $20 billion in profit when we don't know. But to assume that people are going to buy a million of these robots in the next two to three years is such a fantasy beyond any belief that anybody in any real life can do. Because we literally don't have the memory chips to fill the brains of the stupid robot. We don't have the chips. So in three years, Micron will have the chip. So how are you going to build robots without brains that remember anything? So it sounds like, Ross, you would get, correct me if I'm mischaracterizing, you would get more excited if you saw some advancements in, let's say, robot dexterity. If you saw some advancements in like they really can see and understand the world around them, their environment. Am I on the right track? A hundred percent. Now, this is an area that I've studied extensively. It's not robotics. It's humans. Okay. So when AI started like becoming this big thing and all these tech people think they've figured out humans, tech people are the people that understand humans the absolute least of any group of people I have ever met in the in the world. Our tech people, they don't understand humans. Our hands, look at my guitars, just my hands are so dextile and strong that no robot could play the guitars behind me. None of them can. So when they can, you let me know. But our skin is really, really hard to replicate. Now, your hands and feet and I don't even want to talk about your eyes. Your hands and feet are highly complex instruments that were evolved over millions, if not billions of years. And then your eyes are just incredible things. I challenge all of you to to go into chat and say, draw me an eye and explain to me how it works. And it'll blow your mind on how complex your eye is. So so you're absolutely right until they get even basics down. It's like, come on, let's be real. All right. Show me a robot that can play guitar like Ross Gerber. And then I'm excited. Ross, always great to see you. Enjoy the weekend, my friend. Yeah, thank you. Stick around. We hear from a robotics company that just raised a hundred million dollars. Don't go anywhere. The robots getting all the attention in media lately are the humanoids that look and move sort of like us, the ones that CEOs like Elon Musk boasts will do all our menial tasks. So we will have no longer have to lift a finger. But the robots most companies are building are the less flashy task oriented machines that help humans work quicker and more safely. Here's what Gecko Robotics CEO told us recently about whether ROI can be found in the industry. What's so cool and so interesting when we see these humanoids, we see ourselves in them, right? We're like, you know, we're creating these generalized robots that we want to be able to take on some of the tasks that we don't like to do, folding laundry or making food or cleaning, cleaning dishes. What we don't talk about is, is there actually a ROI to that? And the most ROI you can create is actually in the sectors that I was mentioning, the energy sector, the Department of War, you know, these manufacturing sectors, these 30 jobs that actually drive GDP. Joining me now for more on this is Roman Hotzel, the CEO of RobCo, an emerging leader in the robotics space that just raised $100 million in its Series C to scale physical AI in manufacturing. Roman, it is great to see you. So maybe start big picture, Roman. Walk viewers through RobCo, the mission, the purpose, Roman. What's the problem you're trying to solve for? RobCo's mission is to automate the ordinary so humans can do the extraordinary. What we do at RobCo is we built autonomous industrial robots that can be deployed in days, not years. Now, core technology for that is physical AI, robots that learn from data, understand the environment, and can adapt without complex reprogramming. And so with this autonomy stack, we're live across hundreds of customers in the U.S. and Europe and plan to scale even further with these $100 million of additional Series C capital. Roman, how do your robots sort of compare and contrast to traditional robots? How are they different? How are they unique? Three things. We design robots for real factories, not perfect lab environments. The second is the autonomy stack that allows fast redeployment without reengineering and complex, you know, quarter-long engineering processes. And we ship at scale today. So this isn't a future promise. It is live across 10-plus countries. And so that's the main points. And your customers, Roman, that you're referencing there, who are those customers, Roman? What's the average demo? I mean, is it a small shop, a larger company? So we serve enterprise customers across the globe. And all of these manufacturing industrial customers struggle with labor shortages, rising costs, and automation that is too rigid. Some of these examples include BMW, for example, T-Systems, and Robco gives a flexible solution. Flexible robots that handle repetitive, under-economic work and can be redeployed as production changes without shutting down the line or hiring robotics experts. And so manufacturing enterprises and mid-caps across the U.S. and Europe is our target segment. And so those customers, Roman, the advantage to them, the benefit in broad strokes, it's cost savings, it's productivity gains, it's both? Yeah, it's both. It's always the value, you know, journey that we go on with these customers. And the main door opener is none of these companies can hire the talent that is necessary to produce the parts and products they produce since years and decades. And so that opens the door. And then we come in with a very clear value journey. We typically increase productivity into the night shift, into the weekends, and we drive down cost versus human labor, especially through the Robco robot as a service model, which is a monthly fee versus a large, you know, multi-hundred thousand dollars upfront CapEx investment. You know, Roman, we've been talking about robots, obviously, for a long time. Why do you think this moment is so well suited for robots, for the technology? I mean, is it because there have been this, these advancements in the technology? Is it, Roman, you know, is it the great reshoring trend we talk a lot about? Is it the labor shortage you mentioned there? Yeah. I mean, the macro storm, and it is a storm indeed, has never been stronger. So, labor shortage you mentioned, you know, many of the countries in the Western world, including the U.S. at the forefront, want to re-shore, re-onshore manufacturing processes to the U.S. and to the, you know, states that have been strong in manufacturing decades ago, but not in the last couple of years. And so, labor shortage is number one. Number two is the massive reshoring trend. And then number three is the average cost increase, which is 6% plus year over year for talent in the manufacturing industry. And so, that doesn't work because we all expect more products and at more attractive price points. And automation, such as the one we have, the solution we have at Robco, can be the answer to these massive, you know, macro trends that are now kicking in. You know, Roman, lots of questions, as you well know, about how robotics ultimately sort of impacts the labor market. I'm just curious how you think about it, Roman. Do your robots, do you think about it like they're replacing workers, Roman, or no, it's taking jobs that aren't in demand? No, it's, you know, Robco's robots specifically replacing tasks, not replacing people. And so, we take on dangerous, repetitive tasks. We allow humans to focus on supervision, on quality, on creative tasks, on higher value roles. And so, in practice, our customers see, you know, robot usage increase because we keep factories running, but we do not shrink teams. So, there's a reshift in terms of how labor is deployed at these manufacturers. And that's what we want to drive into the next years at Robco. You mentioned your business model, Roman, which is super interesting. So, as I understand it, it's like robotics as a service, Roman, right? You're not selling the robot. Why is, what's sort of the advantage of that financially and strategically? Yeah, that's right. So, we have what we call the Robco robot as a service model, which is a couple thousand US dollars a month instead of hundreds of thousands of dollars in upfront capex investment. And that's very important because, first of all, the cost challenge around adopting robotics is therefore solved. We have an ROI on day one with the initial robot deployment against the human work. So, that's number one. Number two is our solution is software defined. And so, we've been buying software for the last years and decades in a software-as-a-service model, right? And so, we do the same thing in the Robco robot as a service model. Number three, we connect to existing systems, existing equipment, and we capture and work with the data that is available to truly drive value because of self-learning systems. And so, if you think about data capture, data storage, data reasoning, that is happening on a recurring, you know, model. So, the Robco robot as a service model makes tremendous sense financially, economically, but also in terms of the product offering that we have at Robco. Roman, final question. I'm curious. So, as you think about Robco, you're spinning ahead a few years. What will be the big risk for your company, Roman? You know, do you think it's, is it execution? Is it capital intensity? Is it competition? Yes, all of the above, but I think especially the risk of executing well. Because if you think about it, this is a setting in the manufacturing environment where you cannot afford a downtime, you cannot afford a lack of precision, you cannot afford a lack of services. And that includes, you know, 2 a.m. issues in the night shift. And so, we have to be tremendously careful to provide a solution that works for the manufacturing sector. Repetitive industrial tasks and execute really well across the U.S. and Europe. And I think that's one of the biggest challenges. And $100 million in additional capital helps us do exactly that and be close to our customers and not risk, you know, running into these issues. Roman, so great to have you on the show today. Thank you, sir. Likewise. Thanks a lot. Well, that's a wrap on our special, Bought and Sold, Investing in Robotics. Thanks for watching.