While companies across the global economy are trimming payrolls and pointing to artificial intelligence as the catalyst, Elon Musk says Tesla plans to move in the opposite direction.

Speaking at the Abundance Summit on Wednesday, Musk said the electric vehicle maker has no plans to reduce its workforce even as automation and AI transform manufacturing and white-collar work.

“We’re not planning any layoffs or reductions in personnel,” Musk said. “In fact, we will increase our headcount. But the output per human at Tesla is going to get nutty high.”

His remarks come at a moment when many technology and financial firms are cutting staff as artificial intelligence begins to reshape business models, corporate workflows, and the types of skills companies need. Enterprise software firm Atlassian said this week it would lay off about 10% of its workforce as it shifts resources toward artificial intelligence and enterprise sales. Meanwhile, payments company Block, founded by Jack Dorsey, has slashed roughly 40% of its workforce, citing AI as a key factor behind the decision.

The wave of layoffs has fueled a growing debate within corporate America about whether artificial intelligence will primarily replace human workers or amplify their productivity.

Tesla’s Bet On “Human + AI” Productivity

Musk suggested Tesla’s strategy centers on dramatically increasing productivity per employee rather than shrinking the workforce. The company has long pursued extreme automation across its factories, building some of the most technologically advanced production lines in the automotive industry. AI-powered manufacturing systems, robotics, and software-driven optimization are expected to push worker productivity to levels Musk says could be unprecedented.

Tesla already uses advanced automation in the production of its electric vehicles and battery systems, integrating robotics with software that manages supply chains, production scheduling and quality control. In that environment, AI becomes a force multiplier for workers rather than a replacement for them.

The result, Musk suggested, could be a company capable of producing far more vehicles and products with roughly similar staffing levels.

A key pillar of Tesla’s future automation strategy is its humanoid robot project, Optimus. The robot is designed to perform repetitive or hazardous tasks in factories, potentially reducing the need for humans to carry out physically demanding jobs.

Tesla believes such robots could eventually handle a wide range of industrial functions—from moving components across assembly lines to assisting with logistics and warehouse work.

Across the manufacturing sector, companies are increasingly exploring robotics to fill labor shortages and improve efficiency. Executives in the robotics industry say machines are particularly well-suited for tasks that involve repetitive motion or require long shifts of manual labor.

Agility Robotics executive Daniel Diez has previously said companies are adopting robots to address persistent labor gaps in factories and warehouses.

For Tesla, Musk envisions a future where robots eventually build other robots, drastically expanding manufacturing capacity. The world’s richest man has long argued that rapid advances in robotics and artificial intelligence could fundamentally reshape the global economy. He believes machines may ultimately take over most forms of labor, producing goods and services at a scale that dramatically lowers costs.

That scenario could lead to a world where the supply of products far exceeds demand, potentially driving persistent deflation.

At the summit, Musk again raised the idea of a universal basic income as a potential solution to the economic disruption caused by widespread automation.

“We’ll basically just issue money to people,” he said, arguing that technological progress could push productivity so high that traditional economic models may struggle to keep pace.

Contrasting Strategies In The AI Era

The divergence between Tesla and other firms underscores the uncertainty surrounding the economic impact of artificial intelligence. Many companies are cutting staff as they restructure around AI-powered systems that automate coding, customer service, administrative work, and data analysis. Others, like Tesla, are positioning AI as a tool to expand production capacity and create new industries, rather than merely eliminate jobs.

Analysts say the ultimate outcome may vary by sector.

Software companies may see immediate job displacement as AI tools perform tasks once done by engineers and support staff. Manufacturing firms, on the other hand, may require more workers to build and manage increasingly complex automated systems.

However, Musk’s vision suggests a hybrid future for Tesla: a workforce augmented by AI and robotics, where human workers remain central but operate at far higher levels of productivity.

U.S. equity funds experienced heavy selling for a second consecutive week as escalating tensions involving Iran and disruptions to global oil flows rattled financial markets, triggering renewed fears that the world economy could be heading toward a period of stagflation.

Investors pulled a net $7.77 billion from U.S. equity funds in the week through March 11, adding to the $21.91 billion withdrawn in the previous week, according to data compiled by LSEG Lipper. The two-week exodus of nearly $30 billion underscores how rapidly sentiment has deteriorated as geopolitical tensions spill into commodity and financial markets.

The selloff coincided with an extraordinary surge in oil prices after Iranian attacks on energy infrastructure and tankers across the Middle East intensified fears of a prolonged disruption to global supply chains.

U.S. crude prices jumped 9.7% on Thursday alone, pushing month-to-date gains to nearly 43%. The rally has been driven by what traders describe as the most severe disruption to global oil flows in modern history, with shipping activity across the Gulf region grinding to a near halt.

The turmoil has centered on the strategically critical Strait of Hormuz, a narrow shipping corridor through which roughly one-fifth of the world’s oil supply normally passes. With tanker movements slowing sharply and insurance costs for shipping in the region surging, traders warn that supply bottlenecks could persist even if the conflict stabilizes in the near term.

The rapid rise in crude prices has already triggered fears of a fresh inflation shock at a time when central banks were beginning to gain confidence that price pressures were easing. Energy costs are a critical driver of inflation because they ripple through the entire economy — affecting transportation, manufacturing, agriculture, and household expenses.

Equity Markets Face Renewed Pressure

The surge in oil prices has weighed heavily on investor sentiment toward equities, particularly as higher energy costs threaten to squeeze corporate profit margins and reduce consumer spending power.

Large-cap U.S. equity funds recorded $20.98 billion in net outflows during the week, accounting for the bulk of the selling. Mid-cap funds saw redemptions of about $405 million while small-cap funds experienced modest outflows of $8 million. The breadth of the withdrawals suggests that investors are reducing exposure across the market rather than simply rotating within equity sectors.

One notable exception was the multi-cap segment, which attracted $9.32 billion in net inflows. Analysts say the inflows likely reflect institutional investors shifting toward diversified strategies that can navigate volatile market conditions more effectively.

Fund flow data also highlighted a continued shift in investment strategy. Growth-focused funds — which typically hold technology and other high-valuation companies — saw $4.48 billion in net withdrawals.

Meanwhile, value-oriented funds attracted $2.91 billion in inflows for a fifth consecutive week.

The rotation is believed to indicate a classic market response to rising inflation and interest rates. Value stocks, which often include energy, industrial, and financial companies, tend to perform better during periods of commodity-driven inflation. Energy companies in particular stand to benefit directly from higher oil prices, prompting investors to rebalance portfolios toward sectors more closely linked to commodity cycles.

Bond Funds Remain A Refuge

While equities experienced significant withdrawals, bond funds continued to attract steady inflows as investors sought relative safety amid rising market volatility. U.S. bond funds recorded approximately $8.21 billion in net inflows during the week, extending their streak of gains to ten consecutive weeks.

Short-to-intermediate government and Treasury funds led the inflows, attracting about $4.05 billion — the largest weekly intake for the category since late December. Short-to-intermediate investment-grade funds received roughly $2.77 billion, while municipal debt funds drew about $614 million.

The continued demand for fixed-income assets suggests investors are positioning for a possible slowdown in economic growth even as inflation risks rise.

Investors have also been building up liquidity.

U.S. money market funds recorded about $1.5 billion in net inflows, marking a fourth straight week of gains as investors hold more cash while waiting for clearer signals about the economic outlook. Money market funds typically become more attractive during periods of uncertainty because they offer stability and quick access to capital while earning relatively higher yields when interest rates remain elevated.

Markets Brace For Stagflation Risk

The convergence of rising oil prices, geopolitical instability, and persistent inflation pressures is reviving concerns about stagflation — an economic environment characterized by slow growth and high inflation. Such a scenario is particularly challenging for policymakers because the tools used to combat inflation, such as higher interest rates, can also weaken economic activity.

The surge in energy prices has already prompted investors to reassess expectations for policy easing from the Federal Reserve this year. If oil prices remain elevated, inflation could stay stubbornly high, forcing central banks to maintain tighter financial conditions for longer than previously anticipated.

For now, financial markets appear to be trading primarily on geopolitical headlines rather than economic fundamentals. The trajectory of oil prices — and the stability of shipping routes through the Middle East — has become the dominant variable shaping investor behavior.

Until there is clarity about the duration of the conflict and the extent of the supply disruptions, analysts say volatility across equities, bonds, and commodities is likely to remain elevated.

Global investors are quick to retreat from risk when energy shocks threaten to upend the delicate balance between inflation, growth, and monetary policy, as the sharp outflows from equity funds in recent weeks highlight.