Musk Claims Tesla Will 'Make AGI' Amid Declining Sales and History of Missed AI Predictions
Key Takeaways
- ▸Elon Musk claims Tesla will be among the first companies to develop AGI through its Optimus humanoid robot program, continuing a pattern of ambitious AI predictions that have consistently missed their timelines
- ▸Tesla's business fundamentals are deteriorating with 1.63 million vehicle deliveries in 2025 (down 9%), first-ever revenue decline (down 3% to $94.8B), and 33% drop in earnings per share
- ▸BYD has overtaken Tesla as the world's largest EV maker, while Tesla's market share plunges in Europe (48% down in Germany, 40% in France) and faces increasing competition in China
Summary
Elon Musk declared on March 4, 2026, that Tesla will be "one of the companies to make AGI" and "probably the first to make it in humanoid/atom-shaping form," referring to the company's Optimus robot program. This latest proclamation continues a pattern of ambitious AI predictions from Musk that have consistently failed to materialize. In 2023, he claimed Tesla had solved "some aspects of AGI," and in 2024 predicted AGI would arrive by 2025. When that didn't happen, he pushed the timeline to 2026, recently declaring that "we have entered the Singularity."
The AGI announcement comes as Tesla faces significant business challenges. The company delivered 1.63 million vehicles in 2025, a 9% decline from 2024 and the second consecutive year of falling deliveries. Revenue dropped approximately 3% to $94.8 billion—the first year-over-year revenue decline in Tesla's history—while earnings per share fell an estimated 33%. BYD overtook Tesla as the world's largest EV maker in 2025, delivering 2.26 million EVs. Tesla's market share has eroded dramatically in key markets, with sales plunging 48% in Germany and 40% in France.
The situation is further complicated by conflicts of interest surrounding xAI, Musk's private AI company. Tesla investors have sued Musk for breach of fiduciary duty, alleging he diverted AI resources and talent from Tesla to xAI. Reports indicate that xAI has told its own investors it will build the AI for Tesla's Optimus robot, meaning the technology supposedly justifying Tesla's premium valuation may not be developed in-house. Despite deteriorating fundamentals, Tesla maintains a market capitalization of roughly $1.5 trillion, valued as an AI and robotics company rather than an automaker—a narrative critics argue Musk must maintain at all costs.
- Tesla investors have sued Musk over conflicts of interest with his private company xAI, which reportedly will develop AI for Tesla's Optimus robot despite Tesla being positioned as an AI company
- Tesla's $1.5 trillion valuation remains predicated on its positioning as an AI/robotics company rather than an automaker, despite missed self-driving promises dating back to 2016
