Tesla CEO Elon Musk says the company’s AI plan has reached an ‘inflection point’

Elon Musk wants investors to know that Tesla is an artificial intelligence company.

Tesla ( TSLA ) is at a “critical inflection point” as it shifts its focus toward “real-world” applications of artificial intelligence, including self-driving cars and intelligent robots, the CEO told investors on the company’s earnings call on Wednesday. The company had previously said that deliveries of its electric cars in the third quarter reached a global record.

Musk has long pointed to Tesla’s next-generation businesses as engines for its next phase of growth — and has said Tesla will become the world’s most valuable company — and he’s headed toward that day.

“People don’t fully appreciate the degree to which this is going to take off,” Musk said of Tesla’s full self-driving program, calling it a coming “shock wave” for transportation. FSD adoption has reached about 12% of Tesla’s installed fleet, leaving plenty of room for growth, Tesla said. Once people can text and do other things all the time they’re riding Teslas, Musk said, “anyone who can afford the car will buy it.”

Musk said he expects safe drivers in the company’s robo-taxis will no longer be needed in large parts of Austin by the end of this year, with plans to expand it to as many as 10 other US metros, outside of Austin and San Francisco, by the end of the year.

But executives said the company’s biggest application of AI “in the real world” could be in humanoid robots.

Musk told investors that Tesla is “on the cusp of something really massive with Optimus.” Musk said he expects the company to unveil a new version of Optimus in the first quarter.

The robot, which Musk has previously suggested he believes could become “the biggest product ever, of any kind” and come to account for more than 80% of Tesla’s value, represents the next big phase of growth and bet on artificial intelligence, CFO Vaibhav Taneja said.

Tesla shares fell about 3% in after-hours trading after the call and earnings slightly beat estimates, as the company said it faces higher costs from restructuring and investments in artificial intelligence. They’re up about 9% for 2025 through today’s close.

Musk on Wednesday criticized proxy consulting firms ISS and Glass Lewis, which recently urged investors to vote against the proposed pay package amid concerns it may be too dilutive, as “terrorist companies.” A vote on this proposal is scheduled for early next month.