FYI - For Your Innovation: Everybody Gets a Robot? | The Brainstorm EP 19

Welcome to the Brainstorm, a podcast and video series from Arc Invest.

Tune in every week as we react to the latest in innovation and reflect on how short-term

news impacts our long-term views.

To learn more, visit arc-invest.com.

Arc Investment Management LLC is an SEC-registered investment advisor.

Arc and public are unaffiliated entities and do not have a relationship with respect to

either firm marketing or selling the products or services of the other, and therefore Arc

disclaims responsibility for any loss that may be incurred by public's clients or customers.

The information provided in this show is for informational purposes only and should not

be used as the basis for any investment decision and is subject to change without notice.

It does not constitute either explicitly or implicitly any provision of services or products

by Arc, and investors should determine for themselves whether a particular investment

management service is suitable for their investment needs.

All statements made regarding companies or securities are strictly beliefs and points

of view held by Arc and or show guests and are not endorsements by Arc of any company

or security or recommendations by Arc to buy, sell, or hold any security.

Historical results are not indications of future results.

Certain of the statements contained in the show may be statements of future expectations

and other forward-looking statements that are based on Arc's current views and assumptions

and involve known and unknown risks and uncertainties that could cause actual results, performance

or events to differ materially from those expressed or implied in such statements.

Arc assumes no obligation to update any forward-looking information.

Arc and its clients as well as its related persons may, but do not necessarily, have

financial interests in securities or issuers that are discussed.

Certain information was obtained from sources that Arc believes to be reliable, however,

Arc does not guarantee the accuracy or completeness of any information obtained from any third

party.

Welcome to episode 19 of The Brainstorm.

I've just got one topic for you today, robots.

Nick, last week we went long this week.

Let's experiment with a short and snappy and just dive into robots.

I'll set the stage here.

The history of robots and robotics automation has been fairly specialized.

So if you think of the most successful robot to date, Nick, what do you think about?

Those pizza-making robots?

The one that went bankrupt.

No, I'm thinking more right.

I think the most successful ones have been so integrated into our life, we don't even

think about them.

So something like a washing machine, dishwasher, those are pretty solid automations.

That's very...

Yeah.

Very...

Dishwashers don't work, though, if we're being totally honest.

That's a whole separate discussion.

Brainstorm.

Hold on.

This is a big...

I know this goes both ways with a lot of people here, but do you pre-rinse before going into

the dishwasher, or you just don't even use the dishwasher?

No, definitely still use the dishwasher pre-rinse, but it's dependent on what type of food.

Like if you make a bowl of oatmeal, I think you have to pre-rinse, otherwise the dishwasher

useless.

There are people out there who say with modern dishwashers and soap, you're supposed to leave

the food on because that allows the soap to activate and do its job.

I saw that.

There are techniques to help the dishwasher, but why don't we just make dishwashers that

do the job?

Right.

But needless to say, the dishwasher does not look like a human being.

I think this is a big debate and one that's worth diving into and one that we did in our

Brainstorm, because right now we've got a handful of companies that are pursuing humanoid

robots.

You've got Tesla.

They released a pretty impressive video of their Optimus robot, which looks like a human.

Figure AI is a startup.

They just released a video of their humanoid robot.

You've got Boston Dynamics, who's had a humanoid-ish robot as well.

There's the Chinese company that I'm blanking on their name, but they have a pretty crazy

video.

They say it costs like $60,000 for a humanoid robot.

This big question is, we're at this point in time where we've got AI and computer vision

getting to such a point where maybe it makes sense to design a more generalizable robotics

platform.

Do you tackle this opportunity with a human-shaped robot, or do you think the future of robotics

is still along that specialized route where you're going to have automation systems doing

tasks in a more efficient way than a human could?

I think the history of technology and how it's progressed will point towards generalized

robotics, and it will likely be in a humanoid form because it backfits to how we interact

with the world.

I feel like we've said that in brainstorm a few times.

My one question is, because I think all of the robotics hype outside of the specialized

models you gave a few years ago all focused on Boston Dynamics.

They're not humanoid.

You think they feel a little silly.

They took the dog-shape robotic approach.

Well, they've got one that looks like a person now.

Do they?

Oh, yeah.

You've seen the one do parkour.

That's them.

Yeah, the parkour one.

Yeah.

Okay.

So never mind.

They'll have dogs and humans and cats.

But I think a big difference there is, a lot of people say for Boston Dynamics it's

very hard-coded, and so not necessarily as generalizable as using something as vision.

Yeah, and I think it actually ties back to what we were talking about last week with

AI.

I do think, I mean, we talk about it, it seems like every week, but it feels like the progressions

we're seeing on natural language processing, LLMs, that ties into this story because if

you're going to give verbal commands to a humanoid robot, it can't be Siri or Alexa

level smart.

It needs to be much more capable of understanding the nuances of human language for it to then

be able to carry out the various tasks it's meant to do.

So I feel like the software side of the equation, I guess, well, I'll ask you a question.

Do you think the hardware or the software is currently holding back the market right

now?

Great question.

I think hardware to a certain extent, and you see this with all of these companies that

are doing the humanoid form, and they're like, why are there no parts for this, right?

We had to make these actuators ourselves in-house, miniaturizing them down to that level of, say,

a joint and having them have appropriate torque and power and all of that, I think, was something

that people hadn't really explored.

So I don't think it's a insurmountable hurdle.

I think that's the problem with all these startups, and they're just like, oh, we got

to do this in-house, and they knocked that out.

But then I think almost certainly the barrier is going to be on the software side.

Yeah.

I think that follows with what we're seeing out there.

My next question for you, not to put you on the spot, but I think people would enjoy having

you think aloud, how would you go about trying to model this opportunity?

What would be the steps you would take to think about what this market looks like?

Sure.

And that's actually a...

I can help.

I can help.

Yeah.

No, that's great.

Well, two things.

One, that's what I'm doing right now for our big ideas presentation.

Two, I'm going to have to get a new interview question, because I've been asking all of

our candidates so far to do this.

But you can look at a few things.

One, it's like, what should the cost of this robot be?

And I think there, if you just look at the parts, if it is really just vision and motors

and things like this, comparable to a car, I think is reasonable and justifiable for

its use cases, especially if it can do manufacturing work and take over a shift or something like

that.

I do think early applications are likely going to be in the manufacturing space, just given

the companies that are developing these and the inherent benefits of them.

So if you do something like that, I think there's like 12 million manufacturing employees

in the US.

Does each manufacturer, what if each person gets their own robot?

That's possible.

Or it's like, in the long-term scenario, why doesn't one person supervise three human-oid

robots doing things?

And that's where I think looking at what it can actually be capable of is super important

in sizing the market here.

What about when it is capable?

I think we've actually talked about this.

If you are able to create an app store, and you basically get to a point where the hardware

is good enough to do most human function today and maybe even more, and then you could develop

applications for it.

How would you go about, I assume that just increases the TAM significantly because you

probably move outside of manufacturing and maybe actually into the household.

Maybe it becomes a consumer product.

The iRobot.

There's a robot that can take laundry out of the dryer and fold it.

That's a fair amount of time that you can save, and you could probably pay for that.

We were joking, right?

It's like you're sitting watching TV, the human-oid robot comes over, it just starts brushing

your teeth.

Right.

Well, I'm actually tying it back to our joke before.

If you do have a generalized human-oid robot, you don't need a dishwasher or some of these

specialized robots that you have in the house.

Right?

I mean, you probably still need a washer dryer, but I think you can get rid of the dishwasher.

Yeah.

Although, to me, that seems further out.

Or maybe it's like, why would you waste the robot's time dishwashing when you already

have that in your house, like send it out to walk your dog or something?

But what do you think about?

So this was Brett Winton, our chief futurist, and he was making this comparison, which is

the future of the robotics industry could emerge similar to the way early computers and calculators

did, in that the very first computers were essentially calculators, and calculators are

still and grew into its own industry, and that's fine.

You can operate in that segment and make money, but it's like general purpose computing grew

into something far, far greater.

And so the future of robotics is probably a assortment of these calculator specialized

tasks that can grow into sizable markets and be interesting.

But then there's this massive opportunity that, if you can achieve it, is much greater.

Yeah.

I think that makes sense.

And one idea that just popped into my head, because I was thinking about calculators, at

least when we were back in school, the TI-80 models, we were going back and forth on this

on Twitter.

But do you remember when they had, there was one version of the calculator that you could

swap in and out different pads that did, they had different functions.

And if you think about a humanoid robot, there's no reason why it needs to have hands and arms

in the same way that we have hands and arms.

You could, in theory, create specialized hands and arms for a specific task.

Yeah.

But then that gets to the question.

It's like, OK, so then...

I think it is specialized and then...

Right.

It's specialized completely to the exact purpose it needs.

Well, I think if you have the body and legs and then, obviously, the compute power, you

can then specialize the individual functions of, or the adaptations of the arms, or maybe

even the legs.

Yeah.

I think there's...

You can specialize on the hardware side and the software side, and you can generalize

both on the software and hardware side.

So I think I agree with you.

I was just that kind of, I hadn't thought of that before until hearing you speak about

it in this way.

All right.

Nick, as long as we're brainstorming some ideas here, is it a crazy idea for there to

be...

Right now, it's like best in class toothbrush, right?

You got your son of care, your Oral-B, whatever.

Why isn't there like a mouth guard that's just like you put it in?

It's got like a little battery pack outside.

Who knows what?

You don't need to do anything.

It's just in your mouth with little electric motors vibrating some bristles or whatever.

Boom.

Brushes your teeth.

Done.

I feel like that's probably a thing.

I've seen toothbrush specs that are like multi-multi-bristle heads all the way around.

I think so.

I might just be making that up on the spot, but I'm pretty sure I've seen an Instagram

ad for that.

And then I don't want to go on too long, but just another concrete example of how different

visions of the future of robots change to different companies, and this is happening

right now.

So it's like a long time, people are like, okay, how do I put sensors on a robotic hand

so that it can pick up any item without crushing it?

How does this robot pick up an egg versus picking up a dumbbell?

It needs to know how much force to apply, all of this.

And is that a sensor problem or some other mechanical solution at the hand level?

Or in this new age, is it all computer vision?

And the computer recognizes what the object is, knows the amount of force, and can identify

that.

And those are two very different approaches to robotics, and I've heard very recently

just from different people that it's still an ongoing debate here.

I think I would very much lean towards the AI computer vision as the simple solution for

what the future of robotics looks like and that generalizable platform.

Yeah.

I'd imagine it has to be both, right?

Like you need censoring for some things, and you need vision for most, if not all.

If you think about the egg example you gave, right, there's a difference between an uncooked

egg and a hard-boiled egg, and you can hold those in very different manners, and vision

doesn't tell you if an egg is hard-boiled or uncooked.

So you'd have to have some type of sensor in it.

Just a nose.

That too.

I guess you could...

Yeah.

Wow.

Yeah.

All interesting questions.

Yeah.

So if you're seeing this video, if you know someone in robotics, send it to them, have

them comment.

We'd love to further this discussion.

We're doing active research on this area and trying to dimension these opportunities,

the technologies involved, cost declines, and yeah, we'd love to interact with people

in the field or interested parties.

And I'll end on ultrasonic electric toothbrush.

You shaped automatic toothbrush for adults, 360, whole-mouth toothbrush.

It exists.

It's on AliExpress for $9.

So exactly what you said.

I think you saw that product and then said, wow, I have a great idea two weeks later when

you forgot that you saw it.

Are we about to start a drop shipping operation?

No.

Really?

Not for that product.

All right.

Thank you everyone for joining and we'll see you next week for episode 20.

Episode 20.

See you everyone.

Machine-generated transcript that may contain inaccuracies.