Elon Musk thinks humanoid robots could become a bigger industry than almost anyone expects (Save this). @elonmusk said the usefulness of a humanoid robot depends on three factors, the quality of its artificial intelligence software, the performance of its onboard chip and the dexterity of its mechanical systems, especially its hands. Because all three areas are improving rapidly, even small advances could multiply together and make robots significantly more capable over time. Musk also believes robots could eventually help manufacture more robots, creating a self reinforcing production cycle that accelerates after starting slowly. He has suggested that there could be more than 1 billion humanoid robots within the next decade, with each robot potentially producing several times more output than a human worker. If this vision becomes even partially accurate, the opportunity will extend far beyond Tesla and other robot manufacturers. Here is some of the companies that will benefit from this. The supply chain could benefit from rising demand for artificial intelligence models, processors, actuators, sensors, cameras, batteries and memory. Tesla and NVIDIA could benefit from the software, chips, and computing systems required to help robots understand instructions, process information, and make decisions in real time. Actuator manufacturers such as Harmonic Drive and Regal Rexnord could benefit because robots need precise motors and mechanical systems to walk, balance, lift objects, and move their hands. Companies such as Sony, Intel, and RoboSense could benefit from supplying cameras, LiDAR, image sensors, and other technologies that allow robots to understand their surroundings. Battery suppliers such as CATL and Panasonic could also benefit because humanoid robots will require compact, high energy density batteries to power their motors, sensors, and onboard computers. The biggest opportunity may be in companies that supply critical parts to several robot manufacturers at the same time. If you enjoyed reading this, make sure to follow @MilkRoadAI and turn on post notifications for more AI and robotics investing insights. If you want to learn more about the companies positioned to benefit from the humanoid robotics boom, check out the link below.