Elon Musk says Tesla's Optimus robot needs to learn like a toddler

Tesla ( TSLA ) CEO Elon Musk reminded investors this past summer that making thumbs for the Optimus humanoid robot would be no easy task.

Now he's out with a fresh reminder that getting Optimus to behave like a human out in the wild is also no easy task. Two reminders in under six months will likely cause Wall Street to dial back its sales estimates for Optimus in the medium term.

It appears Tesla is doing something similar — pulling back its $25 billion full-year capital expenditures commitment to $20 billion to ensure the humanoids the company delivers are highly usable.

"A big difference with Optimus versus the cars is we don't have this vast fleet of cars from which we can gather training data," Musk said on his late Wednesday earnings call . "With Optimus, we have to bootstrap it by making the robots and having them do self-play, which is really how a human learns to navigate the world. You can see this when you have a toddler, and they grow up, and initially, they're sort of wobbly, and they don't know how to do things. Eventually they learn to wipe their own ass, which is a big milestone. As anyone who's had kids knows. Then they learn to read and do all sorts of things and be able to do these things. They learn this by playing. We actually need Optimus to play at scale in order to have it be really good at tasks in the real world."

Tesla ended production of its flagship Model S and Model X vehicles at its Fremont, Calif., factory this past spring, specifically to make room for Optimus humanoid robot production — a stunning strategic pivot that tells you how all-in Musk is on this program.

The latest version, Optimus V3, stands 5'8" tall, weighs 125 pounds, runs on Tesla's new AI5 chip with roughly five times the memory bandwidth of its predecessor, and is powered by xAI's Grok for voice.

Production began at the Fremont factory in the summer. About 1,000 Gen 3 units are already operating on Tesla's live production floor.

"Musk tempered Optimus timeline expectations to over a year to reach the 1 million unit weekly run-rate," William Blair analyst Jed Dorsheimer said. "Early production has begun on the old Model S/X footprint in Fremont, but the critical hand and finger design are still being optimized. Data is not the bottleneck; real-world reps on open-ended tasks are. Musk noted the first applications will be in dangerous industrial applications by the end of 2027, and reaching people's homes sometime after. We think this was appropriately cautious and reinforces our view that Optimimus can remain important to the multiple well before it has meaningful impact on estimates."

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show and the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team.