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so uh live from an undisclosed location with
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the sultry filter on very sultry filter on
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yeah having a great hair day yeah that is a good hair day great hair day my pal
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and your favorite ceo and twitterer mr elon musk how you doing palette
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[Applause] [Music]
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[Music] appreciate you uh coming to the event
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and um or coming zooming in um what's new in your world
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um well let's see um i guess right now uh i'm sort of
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debating the number of bots on twitter [Music] [Applause]
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on twitter um and um the currently i'd like to what what i'm
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being told is that the uh there's just no way to know the number of bots it's like as
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unknowable as the human soul basically
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so you have an idea witchcraft and alchemy is needed to determine these for the spot percentage
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i said like why don't i try calling people but i haven't got a response you know like if you tried calling people or something you know like maybe
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trying to answer it's not about no no no i don't know but i think like that would be one of the things to do to say like
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have you tried calling them as opposed to trying to read the tea leaves here that's like impossible you know uh
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obviously you can have an account that looks exactly like a human account or is being operated where one person is
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operating a thousand accounts or something um but that person can only buy one toaster they're not gonna buy a thousand
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toasters so you care about like number of unique real people that are on the system it's extremely fundamental and
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anyone who uses twitter is well aware that uh the their comment the comment threads are are full of spam
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scam and and um just a lot of you know fake accounts so um it's it seems uh
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beyond beyond reasonable for twitter to claim that the number of uh
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essentially the number of re said another way the number of real unique humans uh that you see making comments on a
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daily basis on twitter is above 95 percent that is what they're claiming does anyone have that
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experience [Music]
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[Laughter]
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i'd like to sell you you know you know
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and also you can buy the brooklyn bridge um what do you think it is what yeah
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what's what's the uh i mean it's not five percent what is it um i think it's some number that is
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probably at least uh four or five times that number the i'd say it at uh if you
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did sort of the the lowest estimate would be probably 20
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um and uh and this and this is a a bunch of uh
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quite smart outside firms have done analysis of twitter and uh looked at the the the daily daily
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users and their conclusion is also about is about 20 but that's a lower bound it's not an upper bound
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if you look at say um the most liked tweets on twitter um
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so i i have the uh the honor of having the most liked tweet of any
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living human um this is
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thank you everyone for liking my tweet including you some of the bots out there
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but that tweet is less than 5 million likes
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it's like 4.7 or something like that and that that that was the where i tweeted about um
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that next time buying coca-cola to put the cocaine back in
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it's definitely it's clearly something that the public really wants and
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you know uh coca-cola corporation should really think about going back to their roots um
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coca-cola um i mean this this i guess is the reason why our grandparents could sort of walk 20 miles in the snow
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because they had coca-cola with cocaine this is a real reason
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so um anyway that was that's that is literally the most popular tweet um
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of any of any living human um and but twitter says that the daily monet
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the sort of monetizable daily act of uses is 217 million um so why would it be
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that the most popular tweet ever basically is only you know two two and a half percent
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of the entire user base this this seems a
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very very low number um and um and the most popular tweets generally
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are clustered around that sort of four million uh like level so it's like sort of caller like basically two percent or that or
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less than two percent of of the uh daily active users and and technically monetizable daily active
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users is how twitter refers to it so it just seems how is this possible um
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surely there's something that maybe you know ten percent of people would like not merely two percent well
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actually you know if you think about it elon um there's a corollary on youtube what do what's the total user base of
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youtube and what have the most popular videos gotten there yes and i think there's a billion or two maybe a billion
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people using youtube and those the most popular videos have tens of billions of views
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that might be instructive exactly that ratio makes a lot more sense um so
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something doesn't add up here um and my concern is isn't it's not that is it like you know is it five or or seven or
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eight percent but is it potentially eighty percent or ninety percent bots
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yeah um you know uh is it i mean i i certainly know there's some real people on twitter but uh but what's if is it an
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order of magnitude is it is it 50 instead of five and that's obviously an incredibly material number um especially
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since twitter uh relies uh primarily on brand advertising as opposed to specific
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click-through advertising where you make a purchase if you if you make a purchase it it doesn't really matter that much but for brand advertising which is
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really just awareness advertising it matters if real humans are seeing that or not
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yeah and and so i guess stepping back for a second people are curious why you want to buy
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twitter why is this so important to you and then i guess what are the chances
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you think the deal gets done at this point so a two-parter why is it so important to me
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i mean some of this i've articulated before but i think there's a need for a a public town square
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digital town square that uh where people can debate uh issues of all kinds um
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including the most substantive issues and in order for for that to be the case you have to have
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something that is as broadly inclusive as possible that has as much of the the people on the platform as possible uh
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where it's uh it feels uh balanced from a political standpoint uh
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it's not biased one way or the other um and where the system is transparent this is why i
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think it's important to put the algorithm on on github and actually allow the public to see it and critique
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it and improve it and if there are any manual changes uh sort of shadow banning as it's called
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or increasing or decreasing the prominence of a tweet that's done manually that that should be
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noted uh so you know what has happened and it's not just uh you know
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you're just where it is right now we don't know what the heck is going on why is one tweet doing well why isn't that
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sweet not is it the algorithm did someone manually intervene uh why are some accounts banned
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uh with no recourse apparently um and um you know the the reality is uh
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that twitter at this point you know has uh a very far-left bias um and i would
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class myself as a moderate and you know neither the republican nor nor democrat um and in fact uh i have voted vote
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overwhelmingly for democrats uh historically overwhelmingly like i'm not sure
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i might never have voted for a republican just to be clear right now now this election i would
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well david you okay how are you gonna die he keep going keep going he's fine he's
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fine we're gonna resuscitate him we're gonna resuscitate david sacks i mean let me ask you a person the point i'm
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trying to make is that this is not some sort of attempt to uh you know it's not some right wing takeover uh as as say
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people in life may fear uh but rather a moderate wing takeover um and an attempt to uh ensure that that people of of all
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uh you know political uh beliefs feel welcome on on a digital town square that
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and they can express uh their their beliefs uh without fear of being banned or shadow banned um
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and and and that we we obviously need to get rid of the bots uh and and scams and trials and people that are operating uh
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huge bot armies in an attempt to uh unduly influence the the public opinion
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so this is what i think it's very important that we have that like the the
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some of the smartest people in history have have thought about it and said like free speech is important
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for a for a healthy democracy it is important and free speech only matters
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like say when does prestige matter most it's when someone when it's someone you don't like saying something you don't
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like uh that's when it actually matters um so
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um you know obviously and and and it's pretty annoying when someone you don't like
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says something you don't like that's that's that's bad but it's actually a good sign of uh that that you
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have free speech um so i mean i get trashed by the media all the time it's fine i don't care uh go do
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do it twice as much i couldn't care less um but it's indicative of the fact that even though um i you know i have like a
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lot of resources i do not actually have the ability to stop the media from trashing me and that's actually a good
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thing yeah i i have to ask um with regard to this current administration i know how
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hard you work uh on the car company and then biden you know
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you've been a lifelong democrat you've donated to obama and to everybody probably never voted republican and
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yet and the same is true for joe rogan joe rogan is you know a bernie sanders
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supporter and that the democratic party has been openly hostile to joe rogan and biden
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can't even say the word tesla or invite you to the white house when they do an eevee summit i'm curious just on a very
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personal basis what does it feel like to have that experience where the party you supported
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is won't even say the name of your company or invite you there they should be celebrating the work you're doing
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yeah i mean it it definitely feels like this is not right like this is [Music] the the issue here is that there's just
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an uh this the democrat party is overly overly controlled by the unions and by the
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trial lawyers particularly the class action uh lawyers um and generally if you if you'll see something that doesn't
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that is not in the interest of the of the people um on the on the democrat side it's going to come because of the unions uh which
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is just another form of monopoly and the uh the trial lawyers uh
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that that's where actions will be happening from democrats side they're not in the interests of the people and
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then um to be fair on the republican side uh there's this if you say like where is
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something like not not ideal happening it's because of corporate evil um and uh
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religious zealotry um but that's generally where the bad things will be coming from on the republican side um
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that are not representative of the people so um in the case of biden he is simply too
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too much uh captured by the unions um which was not the case with obama um so
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in the case of obama you could have you know he was sort of quite reasonable um and i think he took more of a view of
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that you know obviously take the concerns of the unions into account but uh there are there are bigger issues at
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stake and and unfortunately biden does not do that you'll have a tesla question i read
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today it's incredible there was a bloomberg article that said the following so the setup is this it said since you went public tesla's up
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22 000 uh 11 quarters of prof sequential profitability so hitting on all
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cylinders but the a public analyst
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we had to look at it [Laughter]
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but analysts uh when they put out their projections okay it's it's one of the most enormous bands
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for any company in america the the price targets for tesla despite all of this success some have it at 200 some have it at 1600
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it's all over the place you tweeted a couple months ago tesla's not a company it's like six companies inside
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of a company like you've had yeah maybe more can you just explain to people all these companies inside this super
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company just so folks have a sense of what had to be done to get here okay i mean this question requires thought and
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i'll probably be leaving out quite a few things but if you look and say what what does a typical uh
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car company do uh what what they do is they they um
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assemble vehicles um and they send them to dealers and they manage the supply chain uh the they
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they might make the engine uh or typically we'll make the engine but most of the parts are made by suppliers
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and a lot of the actual technology development is done by suppliers and most most of the vehicle software is
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done by suppliers so the actual amount of uh real work done by car companies
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that what you think of sort of like a gmo ford is not actually that much um and but like so they don't do they don't
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do uh sales they don't do service um they uh so so in the case of tesla for
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example we we do we we do our own sales and service we don't have dealerships um
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then uh tesla also has by far the biggest network of superchargers sort of the electric equivalent of gas stations
00:15:35
so we built an entire global supercharger network which is still the most advanced and by far the best uh way
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to charge your car when traveling long distance or if you live in a city um and uh and don't have the ability to charge
00:15:47
your car there's a street parking or an apartment so the whole supercharged network we developed the supercharged
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network we deployed it i think we have i don't know 15 000 supercharges globally um
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you can travel anywhere in america right now with uh the tesla supercharger network
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um then uh in terms of vertical integration uh we
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uh we make the the battery pack uh the the power electronics the drive unit um
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we uh we actually make we're more integrated in in the parts we actually make so much
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of the car uh internally uh we're vertically integrated um not necessarily because we think that there's some
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religious reason to be a product integrator but because uh the pace that we needed to move was just much faster
00:16:34
than the supply chain could move and to the degree that you inherit the legacy supply chain and
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hurt the legacy constraints including their speed uh cost and uh and technology
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and then tesla is as much a software company as it is a hardware company so the software that runs in tesla operates
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the car operates the screen uh does the charging uh all of that stuff is developed by tesla
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and um so we have sort of a car a tesla os in the car when you
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and then very importantly uh tesla has built uh
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an uh an autopilot ai team from scratch uh that is the best real world ai team
00:17:17
on earth and if anyone else has got a better one i'd like to see it demonstrated in a car um
00:17:23
the full self-driving beta at this point can very often take you with zero
00:17:28
interventions across the bay area from san jose to marin so
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through complex traffic it's really quite sophisticated um and i invite anyone to to join the beta or or look at
00:17:41
the videos of those who are in the beta we've got like 100 000 people in the beta so it's not tiny and we'll be expanding that to i know probably a
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million people or a million i don't know on that order by the end of the year so
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um it's um we also we also built a chip team to
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because there wasn't it wasn't hardware to that we could run the freaking uh ai on uh we couldn't just uh fill the trunk
00:18:07
with a whole bunch of gpus um and and you know
00:18:12
they would would have taken a trunk full of gpus that would have been very expensive and take massive amount of
00:18:17
power and cooling uh just to be able to do what the tesla designed uh full self-driving computer can do
00:18:23
so and we started a chip team from scratch designed it it was the best in the world and still is the best in the world
00:18:29
several years later um and we also then developed we were designing a dojo supercomputer to be
00:18:36
able to process the all the video that's coming in from billions miles of data because just sort
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of like the way that it's critical to compete with google because they have so much data and they have all these people doing searches all the time and humanity
00:18:48
is training it but the same is true of tesla you really need billions of miles ultimately tens of billions of miles of
00:18:54
training data combined with a sort of a vast training computer and then uh
00:19:00
optimize uh inference hardware in the car and stay the ai and training and
00:19:06
specialized software across the board to be able to achieve a full self-driving solution
00:19:12
i uh when when he opened tesla gigafactory remember this 67 years ago
00:19:17
i'll just tell the audience a story quickly elon he puts a slide up there and he says guys we're not actually
00:19:22
building a factory we're building a machine that makes machines and he puts the layout of
00:19:27
the factory and it looks like a chip and it was basically like how you would actually lay out a microchip if you were
00:19:33
or you know you were like a layout engineer it was the craziest thing i'd ever seen i was like that was when i first got it yeah you know you walk in
00:19:39
tend and you see what's happening and you have an insurance company now you're doing insurance for tesla owners and an uber competitor right and eventually a
00:19:45
robo taxi uber competitor alright um yeah i mean insurance is like quite
00:19:52
significant now are you okay i'm okay okay okay because the the car insurance thing is a
00:19:58
bigger deal it may seem a lot of people are paying um you know 30 40 as much as their lease payment for
00:20:04
the car in in car insurance um so the car insurance industry is incredibly inefficient because they
00:20:10
they're just uh first of all you got like so many um sort of middle entities you've got from the insurance agent all
00:20:16
the way to the final sort of reinsurer there's like a half dozen companies each taking a cut um and then uh the
00:20:24
it's all very statistical so that this um even if you're a very good driver like you could be like you know
00:20:31
20 years old and a great driver but they they're it's all statistical so you can't get either can't get insurance or
00:20:37
it's extremely expensive um so what tesla allows for real-time insurance based on your how you actually
00:20:43
drive the car um you can actually if you drive the car in a safer way you actually
00:20:50
have lower insurance so ours is is insurance is based on how you actually drive not how
00:20:56
you know historically people that you know fit your whatever demographic have drive
00:21:01
it's and and then you can close the loop around your uh insurance rate by simply driving better and looking at your score
00:21:08
and and and lowering your insurance in real time and people do it actually promotes safer driving
00:21:13
i actually have had this experience because in my household two people drive my car and one of them has a 93 score
00:21:20
and the other one does not they have like a 60 score and
00:21:25
you may have met this other person but i've been trying to work with her on the aggressive turns and stops
00:21:31
in advance of our insurance bill uh which we're hoping will go down
00:21:38
at some point um you didn't oh the one question are is this twitter deal going to get close do you think are the
00:21:44
chances here well i mean it really depends on a lot of factors here um i'm still waiting for
00:21:51
uh some sort of a logical explanation for the number of sort of fake or spam
00:21:57
accounts on twitter and twitter is is refusing to tell us so
00:22:04
you know this just seems like a strange thing um wait sorry is are they refusing to tell
00:22:10
you or you don't think they really know i mean there's a good chance they may just have no idea
00:22:16
they claim that they do know yeah and they claim that they've got this complex methodology
00:22:22
that only they can understand um [Laughter]
00:22:28
but the guy who landed two rockets simultaneously you stir this cauldron and then you
00:22:34
throw the knuckle boom and um
00:22:42
it comes to you in a dream i don't know um but but there should be some uh you know
00:22:49
objective way to assert the uh thing because this is a this is a material public state threshold issue yeah
00:22:56
it it you know it's it's a you know it's a material adverse uh misstatement uh you know if if they in
00:23:02
fact uh have been um vociferously claiming less than five percent of faker
00:23:08
spam accounts but in fact it is four or five times that number or perhaps 10 times that number
00:23:13
this is a big deal um it's not this it seems like if you said okay um i'm gonna
00:23:19
i agree to buy your house you say the house has less than five percent termites that's that's an acceptable
00:23:25
number but if it turns out it is 90 percent termites that's uh not okay you know it's not the same
00:23:32
house um made most
00:23:39
your house will disappear because it's mostly made in two months um so it you know that that would
00:23:44
obviously just not be appropriate so in in making the twitter offer i was obviously reliant upon the the truth and
00:23:49
accuracy of their public filings and if those those filings are not accurate it's simply
00:23:55
not that's that it's it's not you you can't pay the same price for something
00:24:01
that is much worse than they claimed and you know they say elon life's a negotiation so at a different price it
00:24:08
might be a totally viable deal correct i mean that
00:24:17
i mean it's not out of the question um okay but i really would you know this is you know the more the more questions i
00:24:23
ask the more i the more my concerns uh grow um so
00:24:30
you know at the end of the day acquiring it has to be fixable um and and fixable you know
00:24:35
with reason reasonable time frame and without revenues collapsing along the way and all that sort of stuff um
00:24:41
and so you know i really need to see how
00:24:46
these things have been calculated and it it can't be some deep mystery that is like more complex than the human soul or
00:24:53
something like that um it's got to be you know i think we can apply the scientific
00:24:59
method to this and try to figure out what's really going on and um
00:25:05
twitter's revenue is is primarily dependent i think 70 or some that order on brand advertising as opposed to
00:25:11
specific purchase advertising this is a big deal because brand advertising is not there's not a there's not a purchase
00:25:18
that results from that so it's basically you know how much mind share or like basically if you're a big company how
00:25:24
how often do they hear your name um it's as opposed to something that where you can directly measure the
00:25:29
outcome um so that that means that they're somewhat going on faith um and if that faith is undermined or or
00:25:36
reduced because of the reality of the situation coming to the fore then that the
00:25:42
tesla's revenue twitter starts with the t um the quarter's revenue
00:25:48
uh will be uh significantly impaired and that's a major problem
00:25:53
elon did you have a chance to ask these questions during your negotiation uh
00:25:58
the i like i said i was reliant upon their public filings so to the degree that that they're probably public and
00:26:05
this is normal for a public company if you you know if if you make a formal filing um
00:26:11
that that that is what investors are lying up relying on whether they are making an acquisition offer or simply
00:26:18
buying some shares so this this the accuracy of these filings is important whether you're
00:26:23
buying one share or the whole company and so if these filings are inaccurate or if
00:26:30
they're sort of potentially blatant it's a big
00:26:35
deal you know do you have a sense of why this has been such a persistent problem for twitter do they not have the
00:26:41
technical capabilities to solve the the bot problem or is it more of like just a
00:26:47
they've underprioritized the issue or been unwilling to because potentially their implications for
00:26:52
uh ad revenue i i i i don't know it's sort of speculative at this point so the you
00:26:58
know the the uh the worst interpretation would be that they don't want to look too closely at the thing because they
00:27:04
might not like the answer that would be the worst interpretation um the bet i'm not sure what the best
00:27:10
interpretation is but the least bad interpretation would be maybe they thought it was this way but they're the way they were doing it was
00:27:16
wrong and they didn't realize they were mistaken and simply weren't paying enough attention um it does seem as though it should be a lot easier to get
00:27:22
rid of the bots and and spam and trolls then uh like this is not some we're not
00:27:27
trying to split the atom here you know uh we're not trying to get to the moon okay
00:27:32
we're just trying to uh limit the amount of obviously scammy accounts if
00:27:39
it's if it's if it's like your bitcoin giveaway um you know
00:27:44
probably it's f it's a spammer you know like it does
00:27:50
maybe you know wait you're not giving away a hundred bitcoin i just sent you danny
00:27:57
if if if you send me two bitcoin i'll send you one back right that's my what if i send you 20.
00:28:05
actually um i thought one of the interesting things that came up in your product roadmap um or i guess this was
00:28:12
released and people covered it was the um possibility of twitter becoming kind
00:28:18
of a super app with payments included um maybe perhaps even doge or something
00:28:23
this seems to me uh based on your work with with david a paypal like a pretty brilliant idea what's what's the vision
00:28:29
there in terms of if you were able to buy it you know perhaps at the right price um what would it look like if you know i
00:28:36
could add jason to at elon musk you know 10 bucks or something if you know we were splitting a check or something sure
00:28:44
well for those that have used wechat i think that's wechat's actually a good model um
00:28:50
if you're in china it's basically you kind of live on wechat it does everything um it's sort of like twitter
00:28:56
plus paypal plus a whole bunch of other things and we'll roll into one with actually a great interface and it's
00:29:01
really an excellent app and we don't have anything like that um outside of china so
00:29:08
uh i think such such an app um would be really uh useful um and
00:29:16
it just like the utility of it uh of of sort of a a spam free thing where you could you
00:29:22
can make comments you can post videos you can uh you know i think it's important for content creators to have a
00:29:28
revenue share um now now this this does not need to be done on twitter it could be done from something that's created
00:29:34
from scratch so it could be something new um so really but but i think this thing needs
00:29:39
to exist whether it is uh converting twitter to uh be the sort of like
00:29:46
kind of all-encompassing app that that like said everything from digital town square where important ideas are debated
00:29:53
uh you know maximally trusted and inclusive and at a point where you sort of have a high trust situation than than
00:29:59
payments uh uh whether it's uh crypto or fiat uh can make a lot of sense
00:30:06
just what you just want something that's incredibly useful and that people love using um so
00:30:12
that but it it's it's either convert twitter to that or start something new those are the two
00:30:17
but it does need to happen somehow well it's interesting you bring that up because the price of twitter
00:30:24
is pretty high and you've built a couple of companies and some engineers like to come work for you
00:30:29
and you've now gone through the intellectual exercise of studying all this um if you're looking at the two choices
00:30:35
now fixing twitter given all these problems and maybe just starting your own version which one are you leaning
00:30:41
towards because it i have watched you build a couple of companies and the products have turned out pretty good
00:30:46
so is it easier for someone like you to just start from scratch i mean i mean it's certainly the
00:30:53
my my default inclination is to start things from scratch uh i mean i'm not really i don't buy things like there's
00:30:59
still this sort of you know uh um
00:31:05
yeah like like spacex was started from scratch you know in the case of of tesla uh
00:31:12
you know it was like five people it was still this guy everhart who's the worst guy
00:31:17
i've ever worked with who tries to claim like soul credit essentially for equating tesla if he's so damn great why
00:31:22
didn't he just go you know create another car company when he was fired um but anyway
00:31:27
um so well i mean that's a pretty good story i mean yeah
00:31:32
i remember jesus i mean no but i i remember having this conversation with you we were having a conversation about
00:31:39
the roadster i think i can tell the story i said how's it going pal and you said well i got one problem
00:31:44
um it turns out the roadster parts and putting it together cost 190 000. yeah
00:31:50
and i said i gave you 150 for number 16. so if you make 2000 of these you're gonna lose 80 million dollars and you're
00:31:56
like yeah or double that i mean they basically the parts of the car cost more
00:32:02
than they were selling it for when you were starting to get involved that's it it was difficult no no i i got involved
00:32:08
well before before that yes when twitter when tesla was was nothing
00:32:13
but a piece of paper let me be crystal clear [ __ ] clear
00:32:18
no they didn't bring me in either [Music]
00:32:24
i was gonna start i was gonna start an ed company with jv struggle and based on the the ac propulsion t0
00:32:32
and when i when i asked ac propulsion if it was okay to do that they said well there's also some others
00:32:38
who want to create an ev company but have not created one yet yes would you like to join forces with
00:32:44
them and i said okay well we'll do that that was a huge mistake jb and i should have just started the car company
00:32:50
ourselves instead uh we uh teamed up with everhard topping and right um big
00:32:56
mistake uh the the the actual moral error here was me trying to have my cake and eat it too which is like uh i just
00:33:03
want to work on the technology and the product and have someone else be the ceo and and sort of run the business
00:33:08
operations because i just like working on technology and product and design and um and and also i was like doing spacex uh
00:33:15
you know at the time in our rockets were blowing up so it seemed like uh okay this is like i always wanted to an
00:33:21
electric car company this is how i can have my cake and eat a two that was a huge mistake and fundamentally a moral error um
00:33:28
and uh so so uh in the end i had to freaking be ceo and
00:33:33
i didn't want to be basically um so but it's either that or a company's gonna die so uh so we started with with
00:33:40
really just nothing and uh the uh you know the t0 prototype from ac
00:33:46
propulsion not not if that's that's the precursor to tesla um
00:33:53
clear once again uh when uh we created tesla i when i when i joined there were
00:34:00
no no employees there was no intellectual property there was no prototype there was no and nothing yeah
00:34:05
we crystal [ __ ] clear
00:34:13
and it almost bankrupted you i mean you that sent you to the cliff of india
00:34:21
i mean that was yes we were on the ragged edge of bankruptcy so many times it was ridiculous um
00:34:26
so um and what 2008 was one of the worst years where basically the
00:34:32
you know gm and ford just a gm jammer ford almost went bankrupt
00:34:38
and um you know trying to raise money for a startup electric car company in 2008 while gm's going bankrupt was uh
00:34:45
difficult to say the least um you know people were angry that i even asked them uh
00:34:53
they're like [ __ ] you and hang up
00:34:58
so the only way that that that tesla actually made it through 2008 was uh a subset of the existing investors
00:35:06
um which includes like people like antonio gracias and uh you know um steve jobson and and
00:35:13
a few other key people our aaron price uh who who i've uh hold a debt of gratitude
00:35:18
to the state um and and i i put in all the money i had left and they said
00:35:24
everything literally everything um uh i didn't have a house uh so uh this
00:35:30
is my actually so i've had the house so i was like staying actually in jeff skull's bedroom spare bedroom
00:35:38
um and uh and but they were the the uh
00:35:43
the subset of the investors would say okay i put in they're putting as much as i put in so i put in everything um and
00:35:48
and then we closed that round 6 p.m uh christmas eve 2008 it was last hour of the last day that was possible
00:35:55
because after that people were like kept breaking for the holidays and we were to bounce payroll two days after christmas
00:36:00
it was uh pretty that's doorstop i mean it was an incredible moment in time and and people
00:36:05
also forget at the time that the first two rockets spacex sent up uh didn't
00:36:11
exactly make it to orbit like one of those yeah the first three and i remember having dinner with you at
00:36:16
that time and i asked you hey how's it going i heard glocker says you got four weeks of payroll left and you said
00:36:22
that's not true and i said thank god and you said we have two [Music]
00:36:30
i said no i mean both spacex and tesla in 2008 if we'd simply paid our suppliers on time we
00:36:36
would have gone bankrupt immediately hey tell us tell us actually uh
00:36:42
it was it was a pretty crazy moment because i also remember asking you that we were having dinner at boa and i said
00:36:49
well certainly it's got to be some good news and you took out your blackberry to date the conversation i don't remember it
00:36:56
and you said don't tell anybody jacob is it right no problem and you showed me the clay version of the model s
00:37:02
yeah the most beautiful car i'd ever seen and i said oh my god it's stunning how much is it gonna cost you said i think i can make
00:37:09
it for fifty thousand i remember it was yesterday i said if you make that car for fifty thousand you'll change the [ __ ] world and you did it you know it
00:37:16
was a little more than fifty thousand but uh
00:37:22
how's your let's ask about spacex okay well that's what's basically but i want to ask one more personal question has life gotten
00:37:30
easier for you as these companies have hit scale or has the complexity made life even more challenging because those
00:37:37
early days it was just fighting to survive nobody knew who you were you were anonymous
00:37:43
and it was really just about the work and now let's face it you're the world's most famous guy
00:37:49
and everybody's watching everything you do but these companies are also very big so what's life like for you today are
00:37:54
you enjoying what you're doing every day um well i mean it's it's somewhat of a roller coaster
00:38:00
so there are like good days and bad days um and there's there also crisis issues
00:38:06
um and you know like sort of you know knock on wood like we're not like uh
00:38:12
facing you know death in the face like like it's it's definitely like quite stressful when like you know death is
00:38:18
like trying to eat your face off and like the foam is like you know just getting it
00:38:23
and like right there you know
00:38:28
you know that's it's pretty stressful in that situation um
00:38:33
so like right you know both spacex and tesla have um you know significant cash reserves so
00:38:40
like you know it's like we're sharing death in the face we could sort of see it over in the horizon you know so i don't want to get complacent or entitled because it
00:38:47
um but but if it's not like just sort of foaming at the mouth and actually trying to eat your face off on a daily basis
00:38:54
that's that's certainly we've moved on from that point um and hopefully never
00:38:59
never return um but but there are a lot of issues that need to be it's just
00:39:04
like the if you're a ceo of a company the chore level is high and if you don't do your chores then the company goes to
00:39:11
hell and i hate doing doing chores frankly so uh who does uh
00:39:17
so that's the real like there's a whole bunch of sort of uh you know personnel issues and legal
00:39:23
issues and and and things that i i i don't find enjoyable to work on but if
00:39:28
i don't work on them the company suffers so it's more like just the sheer volume of work is insane
00:39:34
that's the uh and then and then you know go do some go add to it with you know twitter or
00:39:40
something like that yeah i mean honestly i'm an extra processor yeah yeah i mean
00:39:46
i i have a habit of biting off more than i can chew and then just sitting there with like chipmunk cheeks
00:39:53
alice tell us a little bit about where we are at spacex like how
00:39:58
you fund the ability to go to mars but then also commercially still build um
00:40:04
a conventional space business domestically i think this russia thing was probably really good for spacex if
00:40:10
you want to just tell us a little bit about that sure um well
00:40:16
i mean the goal of spacex is to develop the technology that enables life to become multi-planetary um and
00:40:23
uh and make humanity a space sparring civilization which i think is a very exciting
00:40:29
inspiring thing and it's like some one of those things where you can that i think just makes kids like be excited about
00:40:35
the future and we need things that are inspiring and exciting and make the future seem like
00:40:41
it's going to be better than the past life can't just be about solving one miserable problem after another it's got to be like like what's what's inspiring
00:40:48
and exciting and i think that a future where we are space-bank civilization is is one that we can all get excited about
00:40:54
um and and we can go out there and find out what what's what's out there in the universe and what's the meaning of life
00:41:01
and you know where are the aliens and hopefully they're friendly and that kind of um
00:41:06
so uh you know it's interesting i do get asked about the aliens question a lot and i've
00:41:12
i've not seen any evidence of aliens um and i'll i'll be the first to you know
00:41:18
tweet about it or whatever if i found it if i see something i mean you'll tell us if you find him i will tell you i will
00:41:24
definitely tell you if there's aliens um and um
00:41:29
you know uh i think it'd be quite helpful for you know like like if if we found aliens like
00:41:36
probably spacex would get a ton more revenue because people like oh man aliens we're gonna upgrade on space technology pronto because what if you're
00:41:42
unfriendly you know um it's like you know uh the idea of that is the idea
00:41:49
that you build um basically the ability to do orbital
00:41:55
cargo take all those profits launch starlink take all those profits
00:42:00
and move it all into building something that can get to mars is that the kind of rough
00:42:06
plan pretty much it's if it was like a three step a three slide power point it would be
00:42:12
pretty much as you described which is um develop rockets that are that are
00:42:17
capable of of taking uh satellites to orbit and uh crew to the space station
00:42:23
um you know basically servicing government commercial space launch needs um and
00:42:28
then uh uh build a global communication system in space
00:42:34
uh that obviously it does a lot of good for earth but by providing uh internet connect internet connectivity to the
00:42:40
least served because a satellite system is really great for remote locations um
00:42:46
and you know countryside or or remote islands or or places where someone's
00:42:51
trying to cut off their internet as a prelude to a war we take that
00:42:58
system like in star wars yeah yeah so it's like you know so it can be pretty pretty helpful like i think like a song
00:43:06
like basically i think is a a sort of forceful grid on its own right um by providing uh connectivity to the the
00:43:14
least served where they've got either no connection or a a very expensive or poor connection uh you know um
00:43:20
the like we're like we're connecting a lot of schools remote schools in brazil right now i'm actually kind of going to
00:43:27
be headed there uh to sort of kick things off but they've got a lot of schools that have no connectivity at all and in a
00:43:33
modern age uh how do you learn with no connectivity i mean you get i guess old
00:43:38
textbooks and stuff but it's really you're at a huge disadvantage if you have no digital connectivity um
00:43:45
so i think there's just a lot of good that starling can do in it just by by itself but but then the
00:43:52
the revenue generated from starlink is what can enable the uh of a permanently
00:43:58
uh crude base on the moon which would be the next you know next step from apollo which is like let's just not go there
00:44:04
for a few hours and and then head back let's have a opponent at the occupied science station
00:44:10
on the moon um and we could also build um some pretty epic uh telescopes uh on
00:44:16
the moon uh that uh would enable us to learn more about the nature of the universe and figure out what's going on
00:44:21
and maybe detect those aliens um do you do you um do you think that there's enough profit in those businesses to
00:44:28
fund all this or do you need wall street and other investors to come share the load with you
00:44:34
is kind of going to mars a partnership with the government does it need to partner with governments to get there
00:44:41
um well i think technically it does not need to partner with governments um but
00:44:46
of course uh government support would be helpful um so
00:44:52
i mean it's going to be very expensive to build a self-sustaining city on mars like in order for us to become
00:44:58
multi-planetary in a way that's meaningful um the the key threshold is
00:45:04
at which point does the city become self-sustaining such that if the ships
00:45:09
from earth stopped coming for any reason and it could be any reason could be world war iii or it could be just you
00:45:15
know civilization subsided and um and and just gradually got decrepit or something but but if the
00:45:22
ship's stuff coming the three supply ships from earth stop coming to mars for any reason
00:45:27
does the city still survive and that's like really a large base of resources that are that that are needed
00:45:34
uh on mars you can't be missing any one critical ingredient uh the so and you can think of this like
00:45:41
there are these various great filters um you know that that perhaps stop civilizations
00:45:46
and one of the great filters is will we become a multi-planet species or not will humanity be one of those
00:45:53
species that passes the great filter of going beyond one planet and being a multi-planet species and this is
00:45:59
certainly something we'll have to do at some point because this the sun is expanding and will eventually boil the
00:46:04
oceans and destroy your life on earth so if you care about life on earth you should really care about life becoming
00:46:10
multi-planetary and ultimately multi-stellar because otherwise you're basically saying you're signing the sort
00:46:16
of death warrant for all life as we know it it's inevitable um and then there's
00:46:22
also the the various things that kill the you know the dinosaurs and and i mean you look at the fossil record
00:46:28
they've been five major extinctions uh that are sort of on the order of eighty nine eighty to ninety percent of all creatures on earth dying um for a wide
00:46:35
range of reasons um but uh and then humans can also you know with us the world war three danger um
00:46:43
that were that that other creatures didn't have where we could do ourselves in um
00:46:48
by sort of misusing advanced technology and and sort of just you know having some
00:46:53
radioactive hellhole that's all that's left after world war three so um you know you want you could even
00:47:00
characterize it potentially as which will come first world war three or uh life becoming multi-planetary on
00:47:07
mars um yeah i'm sorry i was gonna shift but um
00:47:12
you know when you think about the importance of going to mars versus solving critical energy and climate change
00:47:19
problems here on earth obviously the effort with tesla is related to sustainable energy and i think going
00:47:24
back to like probably the 1950s there were engineering designs around plasma fusion or fusion-based systems that have
00:47:30
evolved to these plasma systems to these tokamak systems and every year every decade it's like
00:47:35
hey next decade we're going to have it what's your point of view on where plasma fusion systems are are
00:47:42
we going to have fusion energy this century this decade
00:47:47
and does it create limitless energy where the electricity production goes up by ten thousand fold and the price of
00:47:53
electricity drops by ten thousand fold and then what does that world on earth look like if that happens so i guess
00:47:59
question is like is that technology real when does it happen and what happens to the world here when and if that happens
00:48:06
i'll answer that question but then i'll let me sort of point out what the what the actual issue is uh
00:48:11
if the question is like uh is it possible to solve uh fusion energy uh
00:48:17
100 yes definitely definitely definitely definitely is for sure um so the the and
00:48:23
and and really just using a takamak style which is like it basically a doughnut ring with uh
00:48:28
uh with electromagnets that control the the plasma uh the the way to solve that
00:48:34
is simply scale up the tokamak uh fusion is uh very much a scale
00:48:40
based thing you want to minimize your surface volume ratio so as you scale up a tokamak you reduce your surface volume
00:48:47
ratio which means like the the the volume you have relative to this the surface uh you you now have much more uh
00:48:55
like you can basically have a hot zone in the center that's relatively far away from the walls and and more of a hot
00:49:01
zone um so the the so it's not in my mind a question as to
00:49:07
whether which fusion can work but there is a question as to whether it is economically viable
00:49:13
um and and whether it is competitive with uh with with alternatives i think that the economic viability of fusion is
00:49:20
a much bigger question and i i think the answer probably is that a fusion
00:49:26
earth fusion is not competitive economically i think that is that is uh
00:49:32
i would say it's probably not competitive economically by an order of magnitude where does it break is it a materials
00:49:37
breakdown or where does it break down economically well so
00:49:43
so you can't just um use uh normal hydrogen you know you you need to
00:49:49
use like deuterium and tritium like unusual forms of hydrogen helium-3
00:49:55
uh you know that there are um there are some uh some uh other types of fusion that
00:50:02
could be used uh but um these are just not they're not like there's not a lot of
00:50:08
this raw material it's quite difficult to get the raw material so first you have to get the raw material uh that's that's
00:50:14
expensive raw material um and then um it's not just about generating the the energy you've got to
00:50:21
um turn that energy into usable electricity you can't just have a hot
00:50:26
thing okay so the hot thing has to translate to usable electricity
00:50:32
so i think you got you've got a cost of a fuel issue which is very significant uh you've got you've got a whole bunch
00:50:38
of knockdowns from when you generate the heat to when you actually convert that into
00:50:44
electricity you've got some very difficult maintenance issues with with the
00:50:49
effusion reactor [Music] so uh
00:50:55
and that should be then compared to alternatives uh the the sustainable energy alternatives that i think uh are
00:51:01
overwhelmingly more competitive are [Music] solar energy wind
00:51:06
geothermal hydro uh some tidal and energy but it's really primarily uh
00:51:12
solar uh and and wind um now and you can really say like what why
00:51:19
bother creating a fusion on earth when we have a gigantic fusion reactor in the sky that just works with zero
00:51:26
maintenance and it shows up every day right it's pretty consistent yeah but
00:51:32
elon can we scale to 1000 x or 100 x our electricity production here using solar
00:51:37
and other renewable sources yes so the the amount of uh surface area you
00:51:42
need to power the united states is remarkably tiny um
00:51:48
so you need like basically roughly a hundred miles by a hundred miles of territory and it obviously doesn't need
00:51:53
to be in one place uh in the united states to power the united states it's like a little corner of texas or utah
00:52:00
the entire country um and and then if you if you you could you could basically
00:52:06
power uh you you probably 10x the just with solar alone um without displacing uh anyone's home
00:52:14
uh power an economy ten times the size of the united states in the united states on land
00:52:19
what when energy prices if you say if you extend that to water because earth is 70 percent water yeah i
00:52:26
mean you could you could say okay now we could probably have a civilization that is a hundred times
00:52:32
as energy intensive as we currently have it and so what does that look like with the last part of my question which is a
00:52:37
world where energy costs are saying it's a hundred times cheaper than they are today and we have a hundred times more energy production capacity
00:52:43
what what changes about civilization what do we do differently and what do we see change most kind of
00:52:49
dramatically well currently we're not because of of just generally
00:52:55
low birth rates almost worldwide civilization is not headed to
00:53:01
have a population that is an order of magnitude greater than where where we're kind of we're currently headed towards a population
00:53:07
decline uh and this is almost everywhere in the world um
00:53:13
so you know it basically seems as as though as soon as you have like urbanization um
00:53:20
and and and education beyond a certain level and income being on a certain level birth rates plummet
00:53:25
um and so as countries get get wealthier their birth rates plummet it's it's somewhat counterintuitive because people
00:53:31
will say like well it's too expensive to have a baby nope the the wealthier they are are the fewer kids you have
00:53:37
um the more educated you are the fewer kids you have so um it's it's a it's it's it's the
00:53:43
inverse um so so i'm not sure who to use all that energy um unless there's a significant
00:53:50
change in the growth rate um or we have a very robot oriented economy so that's
00:53:56
also possible so if we've got a lot of um you know four wheeled robots informed cars and uh
00:54:03
androids humanoid robots then you could certainly see that there'd be perhaps a need for an order
00:54:10
of magnitude more energy but it's not coming from the humans
00:54:16
unless something major changes on the on the human uh birth rate uh level uh this by the way
00:54:22
is i think the biggest single threat to civilization uh right now is the why why do you think societally people just make
00:54:28
those decisions when they become more affluent is it that they just become more selfish or there's more things for
00:54:33
them to do and they have more money to spend on themselves and they say you know what i don't want to have
00:54:38
a large family i want to you know go to coachella
00:54:44
yeah well there is this like weird like mind viruses thing where some people are
00:54:50
think like having fewer kids is is like better for the environment yeah that's crazy total nonsense
00:54:56
the environment is going to be fine they're going to be fine even if we if we doubled the size of the humans um
00:55:01
this is and i know a lot about environmental stuff so um you know uh
00:55:07
you that we can't have civilization just dwindle into nothing um
00:55:13
and you know japan's leading indicator here like the japan's population declined by 600 000 people last year
00:55:19
that lowest birth rate in history uh it's you know it's pretty bad um
00:55:25
so we i don't know we and i think
00:55:30
so so this one element of this is it's a lot of people just think that having kids is somehow bad for the environment
00:55:36
i want to be clear it's not it's essential for me for maintaining civilization that would at least maintain our numbers we don't
00:55:42
necessarily need to grow dramatically but at least let's not uh you know gradually dwindle away and
00:55:48
until uh civilization ends with us all in adult diapers and and
00:55:53
in a whimper like we don't want a civilization to end in an adult diapers with a whimper that would
00:55:59
kind of suck yeah lee well i mean and you and i have had this
00:56:04
conversation i mean in japan i had two people tell me when i was there like i think it's immoral to bring humans into
00:56:11
the world i mean people have gotten very sad about the future it's kind of crazy
00:56:17
it's great life's awesome yes no this there's literally i've heard
00:56:22
many times how like how can i bring a child into this terrible world i'm like have you read history because let me
00:56:27
tell you it was way worse back then okay yeah now it's a good time
00:56:33
it's a good time hey you know listen i i know you're super busy but i want to ask you about
00:56:38
the move to texas because i've been thinking about it uh austin california i don't know some senator told you to go
00:56:44
[ __ ] yourself and like you know like we don't know he's been a couple senators said that actually
00:56:50
yeah it seems to be turning into a bit of a trend um but how has
00:56:55
building the tesla gigafactory which i got to see in austin a couple weeks ago and it was one of the
00:57:02
most inspiring things i've ever seen i mean i don't know how many months it took to build there but
00:57:09
how long did it take to build that dreadnought and then what would have taken to build that in
00:57:15
california california under gavin newsom so we built the
00:57:20
the gigatexas which is the biggest factor in north america i think possibly the biggest factor in the world
00:57:26
um and it's three times the size of the pentagon to give you a sense of scale okay this is freaking big it's like it's
00:57:33
weird it's like so big it's weird like you just like i was trying to find you in it and
00:57:38
i was trying to drive around and it took me about 45 minutes to find you yeah like no you have to like call you can't
00:57:45
like find someone in the world you have to call them on their cell phone and say where are you you know um so i mean the building is like uh
00:57:52
just under a mile long and we're actually gonna extend it it will be like literally a mile long um and about a
00:57:58
quarter mile wide uh and it's uh 80 feet tall so it's just uh ridiculously big
00:58:05
um and when you think about like for manufacturing situation like what what what are the two the two things that
00:58:11
really define manufacturing competitiveness are economies of scale and technology
00:58:17
and so if you got an ace on economy like if you sort of maximize your ace level
00:58:22
on technology and you maximize your ace level on scale this is obviously going to be the most competitive situation and
00:58:27
that's why they're so freaking giant um and the the gigatexas will go all the way from
00:58:35
raw materials like like basically rail cars of cell raw materials coming in and then forming the the battery cell then
00:58:42
the battery pack uh building the the motor uh casting we also
00:58:47
have introduced a major innovation which is to cast the entire front third and rear third of the car
00:58:52
and as a single piece um i got this idea from toys actually because i was like how do they make toys those are cheap
00:58:58
they just cast them i was like well can you build a casting machine that big and they're like well no one
00:59:03
ever has i'm like is it are we breaking physics like no well let's just ask them and there were six major casting machine
00:59:09
suppliers in the world and five of them said no and the six said maybe i'm like i'll take that as a yes um
00:59:15
well i mean this you wanted to do this for the model 3 but it was just too soon huh and and now it's almost there yeah
00:59:22
actually this this partly comes from the model 3 which is actually a fantastic car in many ways
00:59:28
but we were rightly criticized for an inefficient design uh with for the front and rear body um
00:59:35
like sandy monroe who i think is really has excellent from an engineering standpoint and and really a very fair
00:59:41
critic he pistol wept us for um the design of the the battery
00:59:48
and piece by piece told you why you suck yeah and then he did the why and told you why you were awesome
00:59:54
he took it apart and tells us exactly why he's why we sucked and he was correct um and then and i was like well
01:00:01
that's pretty embarrassing so uh no there he was complimentary of other parts of the car but not the body design
01:00:06
and uh and so it's like okay we're gonna go from like you know uh the it's just an incredibly difficult
01:00:13
party to make it's made out of like 120 different pieces with dissimilar metals that are joined and you've got galvanic
01:00:19
corrosion challenges it's very difficult to make um to a single piece casting that's one piece so like 120 pieces went
01:00:26
down to like one so um it's it's it's a it's a huge
01:00:31
and the the like the model y body shop especially the new one where we cast both the front and rear is 60 smaller
01:00:37
than the model 3 body shop so it's you know gigantic it's quite this there's a lot
01:00:42
of innovations of tesla besides the stuff that is is obvious yeah um so anyway so yeah the the
01:00:48
but if and and really you know to to be fair to gavin newsom like uh
01:00:55
you know if you if you had a gun to gavin's head okay
01:01:01
um and said we need to build start building this factory in california right now he couldn't do it because
01:01:07
there are so many uh regulatory agencies um and so many uh litigators in
01:01:13
california that want to stop you from doing anything that even if you're the governor of the of the state you cannot
01:01:19
get it done um so something's got to be done to to to to
01:01:24
you know because california used to be the land of opportunity and it's a beautiful state and i love i
01:01:30
loved living there and i still spend a lot of time in california even though every time i go there i get
01:01:36
every literally every day i go there i get the jesus taxes big tax bill by day yeah like the sheer cost per day of me
01:01:42
going and working in california days boggles the mind and but i still do it you know um but but it the california's
01:01:48
gone from a land of opportunity to to the land of of of sort of taxes
01:01:54
uh over regulation and litigation and this is not a good situation and
01:02:00
really there's got to be like a serious cleaning out of the pipes in california how many months was it to get
01:02:06
the giga austin done took a year and a half two years yeah 18 18 months to build something three times
01:02:12
the size of the pentagon incredible and you just basically the answer to how many months it would take in california
01:02:18
is infinity we would still be working on the permits yeah
01:02:23
elon this this begs a good question which is like i'm ready graduating and you just keep
01:02:29
signing paperwork but we have one more form for you what's a better model yes what's a better model
01:02:36
for government so you know like all governments tend to increase in complexity dictatorship capacity
01:02:43
is the dictatorship the right model and um you know like like how do we solve this
01:02:48
let's say you go to mars or let's say you have to fix california is california permanently broken is there a way to fix it or like how do
01:02:54
you set up a better model so that you don't end up having this this kind of special interest complexity situation
01:03:00
that eventually kills the uh population i mean i think ultimately with california the people of california
01:03:06
just have to get fed up and and demand change um that's the thing that really has to happen um
01:03:12
and and there's there's gotta be an above zero percent chance of the of the republicans winning in california if if
01:03:18
if if it's just the democrats every time you've got to be you know and this is this is like
01:03:25
occasionally uh it the thing is that right right now uh
01:03:30
and plus the level of level of gerrymandering uh which is basically just treating the people like
01:03:35
sheep uh and and it's terrible um that's gone on in california is
01:03:40
outrageous so california uh the dems have a super majority in um the house
01:03:46
and senate in california and the governor and everything and so how responsive is any political party going to be to the people if they are
01:03:53
guaranteed to win it's a one-party state and so i'm not saying that you know go
01:04:02
sort of elect the republicans every time but if it's never you're you're just making california a one-party state they
01:04:07
will no longer be responsible responses to people and will only be responsive to those that funded their political campaigns clip elon saying that 30
01:04:14
seconds on tv over and over go ahead sex yeah so elon shifting gears to the economy um you know we saw this uh
01:04:22
surprise report of negative 1.4 gdp growth in q1 uh interest rates been rising that
01:04:28
increased the cost of the consumer of getting loans things like that we've had a stock market correction
01:04:33
really a crash in a lot of growth stocks software stocks um what from where you sit and the data
01:04:40
that you see uh where do you think the economy is is headed right now do you think we're in a
01:04:45
recession or is it just a risk how do you how do you assess our current economic situation well predicting
01:04:50
economic record economics is always difficult um and and want to assign probabilities to these things um but
01:04:56
ironically i did last year people asked me what i think about the economy i said well i think we might enter a recession
01:05:01
in approximately uh uh spring of 2020 of 2022.
01:05:08
called it nailed it um yeah um so
01:05:14
uh now the thing is that recessions are not necessarily a bad thing uh they they
01:05:20
you know um what i i've now been through a few of them and what has happened is if you have um
01:05:27
a boom that goes on for too long you get misallocation of capital uh it starts raining money on fools basically it's
01:05:34
like any any dumb thing gets money and i'm sure you've seen a few of those um so
01:05:39
at first at some point it gets just out of control and you just have a misallocation of of human capital uh
01:05:44
where people are doing things that are silly and not useful to their fellow human beings um and and then those
01:05:50
companies there needs to be sort of an economic enema if you will um to have everyone sort of shift
01:05:56
uncomfortably in their seats [Music]
01:06:02
um sorry it's just like visualizing it the economic enemy
01:06:08
i mean listen it's got alliteration um so
01:06:14
this too shall pass eventually the economic enemy does its
01:06:19
job it clears out the pipes if you will yes and um and and sort of the the the
01:06:27
[ __ ] companies um uh go bankrupt and the ones that are doing useful products uh are prosperous
01:06:34
um and um but there's certainly a lesson here that if one is making useful product and and doing has a company that
01:06:40
makes sense uh make sure you're not running things too close to the edge from a capital standpoint they've got some capital reserves to last through uh
01:06:48
irrational times because in the in the past when there's been a recession um it has gone it's amazing it's flipped like
01:06:54
a light switch i mean david do you remember this when from the from the paypal you know ex-paypal days when we
01:07:00
uh raised 100 million dollars in march of 2000 uh and we literally we had
01:07:06
the demand was so high we had uh people like vcs like just literally without even a
01:07:12
term sheet wiring money into our account um we'll send the term sheet later
01:07:18
literally we're like we like sleuth out our our bank account number and wire money in and we're like where'd this
01:07:24
come from and it's like um they so it was like there was literally fire
01:07:30
hosing money in march of 2000 and and then in april 2000 the market went into free fall and it went from money raising
01:07:38
money was trivial to even good companies could not raise money uh in a month
01:07:43
um so it's just important to bear in mind like that you know paypal almost went bankrupt in in 2000 uh we came
01:07:49
close um but but thankfully we would raise that that hundred million dollars in in march
01:07:54
2000 uh without which would be uh could be a game over basically um
01:08:00
uh and we kind of saw it coming so it's like we we we got that the the x confinity merger done in like three
01:08:06
weeks and raised 100 million dollars because we were like oh how
01:08:11
we see this coming to an end pretty soon and then a month later it was like you know a nightmare basically um
01:08:18
and and uh anyway so it's just important make sure if you're a healthy company you've got some capital to get through things
01:08:24
um and and then what what's your costs and uh if you if if it is a recession which
01:08:30
it more likely than not it is a recession not saying it is but it probably is
01:08:36
um then just uh make what's your cash flow and get the cop positive cash flow soon as you can
01:08:42
um so um yeah uh but i think we probably
01:08:48
are that are in a recession and that that recession will get get worse
01:08:54
um but you know these things pass and then there will be boom times again um so
01:09:00
it'll probably be some some tough going for i don't know a year uh maybe maybe
01:09:06
you know 12 to 18 months is usually um the amount of time that it takes for for the a
01:09:13
correction to to happen um what do you guys think yeah i
01:09:19
david uh how do you feel about it yeah i mean it feels like it started um you know what started as a slowdown earlier
01:09:25
this year um now seems like i mean technically i guess we need two quarters of negative growth to be in a recession
01:09:31
but it feels like we're in one feels like it started um you know the growth stock the software businesses that we
01:09:36
invest in are sort of the canaries in the coal mine and there's a lot of a lot of dead canaries
01:09:43
uh having a hard time breathing yeah
01:09:54
[Laughter]
01:10:01
it got stunned for a brief moment and and it just it'll be fine um
01:10:07
it it reminds me of the the parrot that you know the pet shop sketch or the parrot it was monty python um
01:10:15
it's pining was parrot is pining for the fjords hey um elon a lot has been talked about
01:10:22
as we wrap here and you've been incredibly gracious giving us so much time thank you for that um a lot of talk
01:10:28
about american exceptionalism over the last couple years waning
01:10:33
and maybe this country had seen its best days and uh we see the work you're doing and
01:10:38
other people in this great country are doing and the debates we're having about the future and yeah china's doing pretty fantastic
01:10:46
rushes on the ropes but it does seem like uh america is
01:10:51
still producing some of the greatest companies uh the world has ever seen some of the greatest
01:10:57
innovations what are your thoughts on america and our future and what we need to keep this country and this beacon of
01:11:04
hope that you know four of the five of us were not born here you know two of you came from south africa and no three of you three
01:11:11
of you came from south africa one of you from canada i don't know what they're putting in from sri lanka and from sri lanka and through canada canada via
01:11:17
canada he came through canada too yeah i know it seems like that's the that's the way
01:11:22
canada is a gateway it is a gateway and how do we it's a well i'm hinting at the answer
01:11:28
here but you know it does seem like our immigration policy is absolutely insane
01:11:34
and uh maybe we need to keep collecting some of the great individuals that i get
01:11:39
to share the stage with here and yourself we need to keep bringing great people to this country why can't we get
01:11:45
that in our heads that yeah it's talent recruitment no absolutely i
01:11:51
think uh it's incredibly important that the united states be like the destination for the world's best talent
01:11:57
i mean you can think of this like like like a pro sports team if you want to win the league um and and uh you know
01:12:03
you want the best players on your team um there now there are obviously a lot of
01:12:09
very talented people born in the united states um but if you can add a few aces from uh from uh outside the country to
01:12:16
the team you're gonna win the league um and and and here's the thing those aces actually want to work for your team they
01:12:23
don't want to compete against you they want to they want why don't we want to be on team america and and so it's like
01:12:30
we have to like fight them off to not be on team america that's the crazy thing um and so it's like if you got some aces
01:12:36
that that are the difference between winning and losing we should be like really recruiting them like you'd
01:12:42
recruit like a star basketball player or football player that's what we should be doing um
01:12:49
active recruiting um just like if you're a company that once wants to succeed you actively recruit the best talent
01:12:56
and then and and that that's the way to win and and if if that stops happening america will stop winning
01:13:01
and we have two administrations in a row biden and trump who don't want to let
01:13:08
the greatest minds the most talented people into this country is absolutely insane i mean i think they deal with this every
01:13:14
day reality is like actually any anyone who who's gonna who wants to to to work hard
01:13:20
and be and do useful things um and in this you know uh we we want in the
01:13:25
united states um and it's not just people who are sort of intellectually strong but it's just
01:13:31
anyone with a with a strong work ethic you know if if they're coming from mexico or if they're coming from you
01:13:38
know europe or china wherever it's just if they're like going to come here and crank hard and
01:13:43
and contribute more than they take hell yeah i mean that's just it's a no-brainer
01:13:49
have you been have you been disappointed in the similarities between biden and trump on
01:13:55
this like maybe you could have expected it from trump because that was a rhetoric he needed to use to get elected
01:14:00
but it's not as if biden has flipped the script and said okay we're going to go 180 degrees in the other direction he's kind of kept it the same
01:14:07
which has been really surprising actually man it's hard to tell what bite is doing if we told frank um
01:14:16
yeah like i feel like it's weaker than bernie's the the the real president is whoever
01:14:22
controls the teleprompter you know it's like it's like the path to power is the path to the
01:14:29
teleprompter you know like what what because that then he just reads the teleprompter so you know i do feel like like if if
01:14:35
somebody would accidentally lead on lean on the teleprompter it's going to be like anchorman it's going to be like qqq
01:14:41
asdf123 you know type of thing um i mean
01:14:47
in fairness to biden he he hasn't been napping as much as he needs to but
01:14:52
it's just it's hard hard things that are getting done you know i mean this administration just it
01:14:58
doesn't seem to get a lot done like and you know um whatever like the trump
01:15:04
administration leaving trump aside there were a lot of people in the administration who were effective at getting things done so uh
01:15:12
but this this administration seems just just to not have like the drive to just
01:15:17
get you done uh that that um that that's my it's it's that's my
01:15:22
impression um so um
01:15:28
you know we definitely need to fix immigration policy like we had covert which was an issue and and and so that was like one reason like not you know i
01:15:34
guess clamp down it on but now now we've moved on and so let's let's just make sure we're getting
01:15:41
tough talent uh in the united states um and and really i'd say broadly it's anyone who who
01:15:48
wants to work for [ __ ] um and and uh and contribute more than they take to the economy like that's just necessarily
01:15:54
going to make for a stronger better society in america elon did you see uh jeff's
01:16:01
uh bezos's tweet back and forth with biden um where biden i think was talking
01:16:06
about inflation inflation but then he correlated that to taxing corporations and bezos said this is misinformation
01:16:12
and disinformation et cetera et cetera what do you what do you think about that whole exchange then back and forth i mean the obvious reason for inflation
01:16:19
is that the government printed a zillion amount more money than it had uh obviously um
01:16:24
so it's like the government can't just uh you know have [Music]
01:16:29
um issue checks far in excess of revenue without there being inflation um you
01:16:34
know velocity of money held constant so unless something would change with velocity of money but but it it just look the the if the
01:16:41
federal government writes checks they don't they never bounce so that is effectively creation of more of more
01:16:46
dollars and if if there are more dollars created than the increase in the goods and services output of the economy then
01:16:52
you have inflation again velocity money held constant um but so uh
01:16:59
this is just this is very basic this is not like uh you know uh super complicated um
01:17:06
and if if the government could just issue uh massive amounts of money and have it and
01:17:12
deficits didn't matter then why don't we just make the deficit a hundred times bigger okay the answer is you can't because it
01:17:19
will basically turn the dollar into something that is worthless so um
01:17:24
and various countries have have tried this experiment multiple times it's not like oh i wonder what happens if this if
01:17:31
if this is done yeah have you seen venezuela like the the poor people of venezuela are you know have been
01:17:38
just run roughshod by their government um and so obviously you can't simply uh create
01:17:44
money the the true economy is very important like the true economy is the output of goods and services it's not
01:17:50
money it's it's literally what is the output of goods and services money is simply a
01:17:56
way to to for us to or anything that you call money uh is is a way for us to
01:18:02
conveniently exchange goods and services without having to engage in barter and also to shift obligations in time that
01:18:09
those are the two reasons that you have money this thing called money it's it's really it's a database the money is an
01:18:16
information system for uh for labor allocation and for exchange of goods and services and for translating in time
01:18:23
and the quality of that information is a function of it's like you basically you can apply information theory to money
01:18:29
and and i think it it helps explain why one money system is or why one
01:18:35
action is better than another and so if like the the money you you just just like a
01:18:41
an internet connection you'd want something that's high bandwidth uh low latency and jitter and uh is not
01:18:47
dropping packets does not have a lot of errors in the system um and the same is true true of money um you you want then
01:18:55
and really like you said what did paypal really really do that helped improve the the the bandwidth that the speed at
01:19:02
which money could move um instead of of mailing checks back and forth which amazingly that was what
01:19:07
people did uh in 2000 um uh you you could now do real-time
01:19:14
exchange of of money um and and now you could ship your goods immediately instead of mailing a check
01:19:20
and waiting for the bank to clear the check so uh like and and the the ultimate thing that with
01:19:26
paypal or or if it sort of was in the x.com sort of went more less sort of niche payments more sort of broad financial
01:19:32
would be to simply just that uh just mediate all the heterogeneous uh cobalt databases out there running on
01:19:38
mainframes during batch processing and have a single real-time system that uh
01:19:45
that was secure um and not batch processing um and so
01:19:51
it would just be from an information standpoint more efficient and and eventually it would all the the
01:19:57
batch processing cobal mainframes operated by the banks would cease to exist you've um spent more time uh and built more in
01:20:05
china than almost anybody i mean apple would be the only company i could think of that's probably got a bigger footprint but i'm
01:20:11
not certain of that what have you learned about china that you didn't know before you opened
01:20:16
the factories there and started delivering cars there and what should we know about china you
01:20:22
know as americans how should we think about china and our relationship with it because we haven't spent time there
01:20:28
sure well i'd say like china first of all is not monolithic it's not like uh everything everything is not some plot
01:20:33
by the chinese government um the uh the the there are many uh factions
01:20:39
within china that compete uh vigorously within china um and uh so
01:20:47
um and and and perhaps most important is that there's just a
01:20:52
just a tremendous number of hard-working smart people in china who want to get ahead and get things done um and they're
01:20:59
not complacent and they're not entitled um and they're gonna they're they want to get things done and they they want to
01:21:05
make a better life for themselves um and what we're gonna see uh which was china
01:21:10
for uh for the first time that anyone can remember who is alive is an economy that is twice the size of the us
01:21:16
possibly three times the size of the us is going to be very weird living in that world
01:21:21
so uh we we better stop the infighting in the u.s and start
01:21:26
punching ourselves in the face because like there's a whole there's way too much uh you know of america punching
01:21:32
itself in the damn face it's just just dumb um and and think about like hey we got to be competitive here and and uh
01:21:40
there's a new kid on the block that's going to be two to three times our size we better step up our game
01:21:47
um and uh you know and stop infighting um you think it's easier to stop in
01:21:53
fighting once we're beaten or do you think that there's a way folks here can actually just you know get their political and
01:21:59
commercial act together but or does it not happen until we've realized we've lost or do we need a war
01:22:06
i mean we i sure hope we don't need a war um uh but there will be certainly um
01:22:14
you know an economic competition that i think will will blow people away um
01:22:21
when they realize just how competitive they have to be to be competitive with companies in china it's very difficult
01:22:27
you know tesla is competitive hotels is competitive because we have an awesome team in china that uh you know
01:22:34
so um like do your tesla china employees work some meaningful percentage more or
01:22:41
harder than your tesla non-china employees do you find like it's two different companies basically
01:22:46
well i mean i i think tesla is somewhat it it tells us sort of pretty far out there in terms of
01:22:52
work ethic uh anywhere in the world so uh the tales of work ethic in the us i
01:22:59
think is substantially greater than any other car company or or any large
01:23:04
manufacturing company that i'm aware of so you know tesla
01:23:09
tesla does have a a strong worth work ethic in in the u.s
01:23:16
but but to be totally frank it it the work that work ethic is exceeded um
01:23:22
uh on balance by uh it tells a china team that that is i
01:23:27
think objectively true so does not say there aren't lots of hard-working people that tells the u.s
01:23:33
they certainly are but if you say on average the the the work ethic in china is higher it's just
01:23:39
tell us tell us what you're calling it like it is you know so what about if you're an american ceo
01:23:44
how do you deal with do you think just the need for managing all these political
01:23:50
factions inside of a company you probably saw you know all the sturm and wrong related to disney and what happened to them and
01:23:56
what's continuing to happen to them on both sides between their employees as well as the governments etc
01:24:02
um do you have any advice or what do you tell like young ceos that you hang out with about how to deal with that how to
01:24:09
make those decisions where you land in the spectrum of dealing with all of this stuff
01:24:14
the non-work issues that are related to now you know going to work every day
01:24:19
i'm not sure i entirely understand what you mean like uh you know although
01:24:26
whether it's the the need for political correctness or the need for having political points of view and having to bring that and balance that in the
01:24:32
workplace how do you deal with that how do you give advice to other folks about having to deal with it look i think it you know the the point of a company is
01:24:39
to produce useful products and services for your fellow human beings it is not
01:24:44
uh you know some political gathering place or a thing where if that's the point of a company like it's i'd say like it's you
01:24:51
know politics and other stuff should
01:24:58
let's not lose sight of why companies should exist um [Music] so i i i i gotta i gotta
01:25:05
i'm i'm actually late for yeah i apologize i'm gonna work on the rocket guys uh yeah
01:25:11
um we're gonna go ahead and let you uh get to mars and uh i'll see you soon
01:25:22
[Music]
01:25:31
and they've just gone crazy
01:25:38
[Music]
01:26:06
we need to get mercies [Music]
