Dear Reader,
Today I’d like to continue our discussion about robots.
Yesterday we talked about the actuator opportunity inside humanoid robots.
But the robot story is much bigger than that.
When you look at the robots that are at mass adoption, or closest to it, they aren’t humanoids yet.
Tesla has some time to work out its manufacturing kinks.
I spent the last hour and a half getting this ready for you, so let me walk you through it.
Already Commercial, At Scale
The first group is warehouse AMRs.
That stands for autonomous mobile robots.
Think of an Amazon facility, where self-guided vehicles carry themselves from point A to point B and navigate the floor on their own.
Amazon crossed a million of them in June.
The second group is surgical robots.
North America has 74% of that market, and the dominant company is Intuitive Surgical with its da Vinci system.
What a great company.
The surgeon doesn’t stand over the patient.
The surgeon sits at a nearby console and operates robotic arms with hand and foot controls.
Urology. Gynecology. General and gastrointestinal surgery. Colorectal. Thoracic and cardiac. Head and neck.
I was surprised how deep the penetration has gotten, and I’ve been watching this company forever.
You can debate whether it’s a true robot yet.
But I’m sure AI is studying the movements of the surgeons, and eventually those machines will be doing the surgeries themselves.
Crossing Into Mass Rollout
The first is robotaxis.
Waymo operates over 4,000 vehicles in 14 US cities, giving half a million rides a week.
Waymo is owned by Google.
Tesla is in six cities.
The second is drone delivery.
I scoffed when I first heard about this five or seven years ago.
I thought, give me a break.
But Zipline has passed 2.5 million commercial deliveries, with roughly 70% of its daily volume in the US.
Walmart and Chipotle are partners.
Walmart groceries or a Chipotle order can now arrive by air.
Coming Next: 2027
Early commercial scaling is right in front of us, and it’s autonomous long-haul trucking.
Aurora is the famous name here.
They believe they can cut costs by 50%, and they have big partnerships.
Think California to Kansas, or Texas to North Dakota, with no driver.
I’ve been looking at their stock, and it isn’t quite ready to buy.
It’s in the toilet, for good reason so far.
But if they prove they can get this done at scale, that’s a big deal.
The Common Thread
Here’s what ties all of this together for investors.
The primary objective of a business is to earn the highest return on its invested capital.
Everything else is nonsense.
And every one of these robots works on a fixed route or in a fixed facility.
Zipline flies from Chipotle to your house.
Long-haul trucks go from point A to point B.
Waymo and Tesla taxis run mapped routes.
The Amazon warehouse robot goes to one section, pulls what it needs, and hands it off to the next.
That’s what robots can manage well today.
The other driver is something I call the CapEx for labor swap.
Companies spend capital now so they can spend less on labor later.
Say a trucker costs $5,000 a week, or $20,000 a month.
If the software can’t do the job for less, there’s no return on investment.
The case has to be that the software is cheaper, more efficient, and produces fewer accidents and lower insurance costs.
The Part Nobody Wants to Talk About
This is going to cause a lot of unemployment.
Robotaxis put Uber drivers out of business.
Drone delivery does the same to the Grubhub and Uber Eats crowd.
Autonomous trucking threatens truck drivers, and that’s a good wage.
I know some of these guys personally.
Surgical robots could eventually do this to doctors.
The big obstacle was always the software, which couldn’t mimic a surgeon’s hands and think.
AI is changing that.
The question for us as a society is what happens when a lot of people who make their living driving taxis and trucks suddenly have no paycheck.
If you don’t think that’s going to knock on your door, I beg to differ.
As Ronald Reagan said, “A recession is when your neighbor loses his job. A depression is when you lose yours.”
We need to figure out how to take care of the people who are about to be automated away.
It’s better to change things from the top than have them changed from below.
Look at France and you can see that very quickly.
Where I Stand as an Investor
This is an investing channel, so let me tell you where I am.
Intuitive Surgical is a great company, but the stock has been too high.
Aurora I’m looking at very heavily, to see whether their system could be copied too quickly.
Waymo is interesting if Google ever spins it out.
Zipline is the name in drones.
There will be more.
I’ll be analyzing each of them.
You don’t want to place bets on things with low returns on investment.
You end up sitting there hoping and praying it works out, and it never pays off.
So we’re going to wait and see where the value gets extracted, and then we’ll start recommending.
But there’s one company where I’m not waiting.
Every one of these machines runs on chips.
And Elon Musk has been quietly paying one little-known AI firm since 2012.
Elon’s cars have run on this company’s designs since then.
NVIDIA’s Blackwell and THOR superchips run on it too.
When NVIDIA tried to buy the company outright, Elon fought the deal.
He didn’t want NVIDIA to control it.
Now Elon is gearing up for the biggest venture of his career — one SpaceX calls “the largest actionable total addressable market in human history.”
And on October 24th, roughly 320 million SpaceX insider shares unlock — about $43 billion at the IPO price.
I believe a big chunk of that money goes looking for this company.
That’s tomorrow.
Here’s the name, the ticker, and why I want you in before October 24th:
Have a wonderful weekend.
God bless, and I’ll see you Monday.
“The Buck Stops Here,”
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Written by Dylan Jovine