Elon Musk told the World Economic Forum in Davos that the lowest-cost energy for AI could come from solar power generated in space. He also suggested that sparsely populated areas of Spain and Sicily could serve as Europe’s “power plants.”

“We are in the most interesting era in history.” This is how Elon Musk opened his remarks at the World Economic Forum in Davos, speaking with BlackRock Chairman and CEO Larry Fink.

Musk highlighted the potential of solar and battery storage in the United States. “Solar energy and batteries alone could supply half of the energy consumed in the US annually, requiring a negligible amount of space,” he said. “The same can be done in Europe: sparsely populated areas of Spain and Sicily could generate the electricty Europe needs.”

He noted that high tariffs complicate such plans in the United States. “SpaceX and Tesla are going to produce 100 GW per year at our plant in three years. I encourage others to do the same,” Musk said. “Despite the tariffs, China produces solar cells at a very low cost.”

Musk also noted that Tesla has begun using Optimus humanoid robots for basic factory tasks, expects them to handle more complex functions by 2026, and plans to make them available to the public in 2027.

“I believe the decisive factor for the deployment of AI is energy,” he said. “AI production is growing exponentially, but electricity is only growing by 4% per year. In 2026, we are going to produce more chips than we can power.”

He added that China is increasing energy generation to meet demand, largely through solar energy.

Looking further ahead, Musk suggested that the lowest-cost energy for AI could come from space. The plan is to transmit solar energy generated in space to Earth, a goal he expects to achieve within two to three years.

He closed on a hopeful note: “I want to encourage everyone to be optimistic and have hope for the future. You lead a better life if you are optimistic and your predictions don't come true, than if you are pessimistic and they do.”