Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Let me tell you we have a new star. A
Speaker 2: star is born.
Speaker 3: Elon humped up on Mars Jus and Kennemy. He is
Speaker 3: the Thomas Edison plus plus plus of our age. Probably
Speaker 3: his whole life is from a position of insecurity. I
Speaker 3: feel for the guy.
Speaker 4: I would say ninety eight percent really appreciate what he does.
Speaker 1: But those two percent that are nasty, they are out
Speaker 1: in four post. We were meant for great things in
Speaker 1: the United States of America, and Elon reminds us of that.
Speaker 2: I'm very disappointed in Elan.
Speaker 3: I've helped Elon a lot.
Speaker 4: At Welcome to Elan and Bloomberg's weekly podcast about Elon Musk.
Speaker 4: It's Tuesday, September ninth. I'm your host, David Popatoppolos. Okay,
Speaker 4: So Elon, it appears, just may have himself a new
Speaker 4: Tesla package. I'm I mean a very very big pay package.
Speaker 4: If all goes well, and you know, every home in
Speaker 4: America has an optimist robot wiping baby bottoms and a
Speaker 4: driverless car to parked in the driveway, and Tesla's stock
Speaker 4: is worth many times more than it is today, well,
Speaker 4: then the package could be worth one trillion dollars. Max,
Speaker 4: that's that's trillion with the T. Yeah, I'm getting this right.
Speaker 5: I mean, if it's wiping the baby bottoms though, that's
Speaker 5: a trillion dollar opportunity right there.
Speaker 4: Okay, you know that guy, that's co host Max Chafkin. Now,
Speaker 4: all the package needs is shareholder approval. The vote comes
Speaker 4: at the company's annual shareholder meeting on November sixth. We'll
Speaker 4: look ahead to that vote and break down the inns
Speaker 4: and the outs and the whys of the package the
Speaker 4: Tesla board is proposing. And also at that meeting, less
Speaker 4: dramatic perhaps, but also very important, shareholders will vote to
Speaker 4: determine if Tesla should start investing in Elon's AI company XAI.
Speaker 4: Will be joined a little later by Bloomberg Tech reporter
Speaker 4: Kurt Wagner at the sci Us that potential Tesla XA ideal.
Speaker 4: But first for Elon's payday. Sitting here with me is
Speaker 4: that guy, Max. Hey, Max, Hey, David, and over in
Speaker 4: Oakland Bloomberg's top muscologist, Dana Hall. Dana Hello, Hey, Hey, okay,
Speaker 4: so but wait a minute, by the way, Max, congratulations,
Speaker 4: you have big book news today.
Speaker 5: Yep, that's right, David and listeners. The paperback of my
Speaker 5: book The Contrarian, which is a biography of Peter Teal,
Speaker 5: is out today as we're recording this Tuesday, September ninth.
Speaker 5: I actually originally wrote it in twenty twenty one, but
Speaker 5: I updated it for the paperback. I wrote a new
Speaker 5: essay trying to kind of make sense of Elon and
Speaker 5: how he related to some of the stuff I wrote
Speaker 5: about back then. And yeah, I wrote a whole whole
Speaker 5: new essay about it. Basically, the argument in it, I'll
Speaker 5: keep the Church Sweet, is that Peter Teal's kind of
Speaker 5: activism and advocacy and waste and his money became kind
Speaker 5: of a model for Elon during the last election cycle.
Speaker 5: So hopefully it's something for people listen to this podcast.
Speaker 2: I've read it.
Speaker 5: I'd really appreciate it if you checked it out and
Speaker 5: review it.
Speaker 2: And so, oh, I already read it.
Speaker 4: Do I need to reread it?
Speaker 2: Yeah? You do from cover to cover?
Speaker 4: Jeez, Okay, then I shall excellent. Congratulations again, Max, very cool.
Speaker 4: All right, So Dan, before we talk about this new
Speaker 4: or potentially new Musk pay package, let's just step back
Speaker 4: a little for a minute and talk about the old
Speaker 4: Musk pay package, the one that ran into trouble in
Speaker 4: Delaware court.
Speaker 2: What exactly is the status of that? Is it totally dead?
Speaker 2: Mostly dead?
Speaker 5: What?
Speaker 3: No, not at all? So the Delaware Chance recurt struck
Speaker 3: down the pay package. Tesla appealed the pay package to
Speaker 3: the Delaware Supreme Court. Oral arguments for that are in October.
Speaker 3: In the interim, Tesla has already awarded Musk like a
Speaker 3: third of that twenty eighteen pay package, as like a hedge,
Speaker 3: depending on which way where it goes. But then you know,
Speaker 3: in Elon's mind, he still hasn't been paid, and he
Speaker 3: would like very much like to get paid, particularly if
Speaker 3: they want him to stick around. So this is a
Speaker 3: new it's like the go forward pay package. Like, forget
Speaker 3: about Delaware, forget about twenty eighteen. That's all up in
Speaker 3: the courts. How do we incentivize Elon to stick around
Speaker 3: for this new wave of growth which he sees as
Speaker 3: all being about optimism and robotics at AI.
Speaker 5: But to Dana's point, Tesla very much still plans to
Speaker 5: give him that money, that old pay package.
Speaker 2: What was that old one worth?
Speaker 3: I mean, it was like fifty billion dollars at the time.
Speaker 4: Jump change.
Speaker 3: Max.
Speaker 5: Yeah, yeah, but it's fluctuated a bit because it's the
Speaker 5: it reflects the stock press under So so fifty ish billion,
Speaker 5: give or take, still significantly smaller, I think if my
Speaker 5: math is right, then one trillion.
Speaker 2: Yes, So, Dana, here's the thing.
Speaker 4: When he had that package, and as you always reminded us,
Speaker 4: and as Max is doing again, so now there was
Speaker 4: no like truly set number on it because the value
Speaker 4: of the package, that old package fluctuated with the value
Speaker 4: of the stock and some other things. But that package
Speaker 4: was deemed, if I'm remembering correctly, totally unprecedented and slightly
Speaker 4: inconceivable to us mere masses. So how do we go
Speaker 4: from a number that already seemed large to a number
Speaker 4: that seems inconceivable. Why did the board feel obligated to say, hey, Elon,
Speaker 4: here's up to potentially one trillion.
Speaker 3: Dollars because Elon threatened to quit. So here's the thing
Speaker 3: that you need to understand about Elon and Max and
Speaker 3: I have talked about this a lot. Like money alone
Speaker 3: does not motivate Elon.
Speaker 5: He is already the.
Speaker 3: Richest person in the world. What motivates him is really
Speaker 3: huge Swinging from the fence's goals that everyone thinks is
Speaker 3: crazy and control, and what he wants is a bigger
Speaker 3: stake in Tesla. He wants twenty five percent. So the
Speaker 3: new pay package is a series of twelve trenches, and
Speaker 3: it's like a video game, like as you hit these milestone,
Speaker 3: you unlock a trnch, and the tronch is both market
Speaker 3: cap which goes up with these you know, the first
Speaker 3: tronch you have to hit two trillion dollars, the second
Speaker 3: tronch is two point five trillion, all the way up
Speaker 3: to the over eight trillion dollar mark. But you also
Speaker 3: have to hit operational milestones that have to do with
Speaker 3: revenue and like products like robotaxis, FSD, take rate, all
Speaker 3: this other kind of stuff. And with each tranch that
Speaker 3: Elon unlocks, presumably I mean shareholders win too, right, Like
Speaker 3: if the company goes for me worth a trillion dollars
Speaker 3: to over eight trillion, everybody wins. That is the premise
Speaker 3: of the pay package. And with each trnch, Elon gets
Speaker 3: more stock, which gives him more control. So conceivably, by
Speaker 3: the end of this he'll be a trillionaire and I'll
Speaker 3: have a twenty five percent stake in the company.
Speaker 5: I would amend what Dana said just slightly, which is
Speaker 5: to say, I agree with her that Elon does not
Speaker 5: care about money really, but he does care about really,
Speaker 5: really large amounts. And I think Dana's right, like a
Speaker 5: big part of this, like the money is part of it.
Speaker 5: And of course he has big plans, right he wants
Speaker 5: to colonize Mars. He can definitely find a use White
Speaker 5: Baby trillion dollars. But also like, this is a way
Speaker 5: I think to take the focus away from Tesla's current issues.
Speaker 5: And I went back to look at the context of
Speaker 5: that twenty eighteen award, because you're right, David, like at
Speaker 5: the time there were headlines like this is the biggest
Speaker 5: this is like more money than anyone could could conceivably
Speaker 5: be and the headlines were very similar. But on the
Speaker 5: other hand, like, if he were to do this, it
Speaker 5: would be like an amazing, unprecedented amount of growth. Now,
Speaker 5: what was happening in early twenty eighteen when that award
Speaker 5: was made, Well, Tesla was basically in crisis. They were
Speaker 5: frantically struggling to produce Model three Sedans. They were in
Speaker 5: what Elon you know, would took to calling quote unquote
Speaker 5: production hell, this all kind of seems quaint, but at
Speaker 5: the time it didn't seem totally clear that he was
Speaker 5: going to figure out a way to like actually mass
Speaker 5: produce this car and do so profitably. And as Dana remembers, well,
Speaker 5: they were short sellers who were convinced the company was
Speaker 5: going out of business, and this was kind of a
Speaker 5: way back then to say, Okay, let's ignore the problems
Speaker 5: for a second and think about what the future could
Speaker 5: look like. And I think that's what's happening again. This
Speaker 5: is a way, in addition to incentivize must to keep
Speaker 5: them from quitting, to from the point of view of
Speaker 5: a lot of Tesla investors, to pay them what is worth.
Speaker 5: It's a way to change the channel and to create
Speaker 5: some sort of defined goals. Elon loves talking about these
Speaker 5: kind of abstract, far off goals, stuff like optimize wiping
Speaker 5: baby butts without a clear timeline for doing so. But
Speaker 5: now look, we have a timeline. Sort of yeah.
Speaker 4: I mean, there is seemingly a somewhat fantastical quality to
Speaker 4: it all, and the changing the narrative thought is an
Speaker 4: interesting one, although I guess it's not super intuitive to me,
Speaker 4: And yet I look at the stock price, and the
Speaker 4: stock price Loan and Behold is grinding ever higher? Is
Speaker 4: that I don't I know, you don't follow every twist
Speaker 4: and turn of the stock price. But is some of
Speaker 4: that rebound in the stock predicated on the fact that
Speaker 4: it looks like the board has Elon signed on for
Speaker 4: the long haul?
Speaker 3: I think so, I mean, that's always you know, they're
Speaker 3: sort of in this like mutually assured chokehold right where
Speaker 3: like the board needs Elon, Elon threatens to quit, the
Speaker 3: board tries to appease him. He is the sort of
Speaker 3: singular person who's got the vision of the company. He's
Speaker 3: been the CEO since two thousand and eight. But another
Speaker 3: way to think about the pay packages is if the
Speaker 3: twenty eighteen package was described as like a moonshot that
Speaker 3: everyone thought was crazy, like he did actually achieve all
Speaker 3: the milestones and then some So now they're sort of
Speaker 3: re upping the same conceit, although now it's like a
Speaker 3: Mars shot and we're talking trillions not billions. And Musk
Speaker 3: has always said that he thinks that there's a path
Speaker 3: for Tesla to be the most valuable company in the world,
Speaker 3: and if that's what it takes to motivate him. I
Speaker 3: think the board has made the deduction like, well, why not,
Speaker 3: let's do whatever we can to motivate it and Wall
Speaker 3: win in the process. And I think that this will
Speaker 3: easily pass at the shareholder meeting on November sixth, And
Speaker 3: clearly there's gonna be like a whole campaign to get
Speaker 3: people engaged with shareholders, particularly the retail fan base. And yeah,
Speaker 3: it's like unprecedented incorporated America. But but Elon is an
Speaker 3: unprecedented figure.
Speaker 4: That's I was going to ask you that, so you
Speaker 4: see it totally sailing through, Max, you as well. This
Speaker 4: is like a ninety nine to one vote.
Speaker 5: Yeah, this is like Vladimir Putin's Latimer reelection. Yes, it's
Speaker 5: going to pass. This is a huge amount of money.
Speaker 5: And if you're if you're mad about inequity in the world,
Speaker 5: there are lots of reasons to sort of think this
Speaker 5: is a bad idea. I mean, it is kind of
Speaker 5: funny that like Elon Musk has spent the last I
Speaker 5: don't know a year or so, like just unbelie alienating
Speaker 5: his customers, like just totally taking essentially like a boring
Speaker 5: company flamethrower to his existing business. And the board has
Speaker 5: turning around thanking him and going to write him like
Speaker 5: a gigantic check. But as Danna says, what they're doing
Speaker 5: is saying, hey, if you can back up these these
Speaker 5: very brand statements that you've been making, Yeah, sure, we'll
Speaker 5: pay you. There's one thing I don't did Dana mention
Speaker 5: that that there's a succession planning part of this as well?
Speaker 5: I don't know that, like the latter tranches.
Speaker 4: With one of his kids, require him to.
Speaker 5: Come up with a succession plan and for the board
Speaker 5: to approve it. I think that also does kind of
Speaker 5: answer some of the concerns that you were seeing even
Speaker 5: from Tesla bulls around the time when Elon was kind
Speaker 5: of at his most erratic earlier.
Speaker 2: This my money's on X.
Speaker 4: If that's what they're he's grooming him at a young age,
Speaker 4: just get him, get him right there within twenty five
Speaker 4: years actually running the show.
Speaker 2: All right?
Speaker 4: So Dan, it sails through a November sixth in the
Speaker 4: shareholder meeting. Is there potentially any other court obstacles to
Speaker 4: overcome on this one too? Just like the prior one
Speaker 4: or the fact that Tesla is now domicile in Texas
Speaker 4: means that are no longer domicile than Delaware means nah,
Speaker 4: it's the core problems are a thing of the past.
Speaker 3: Yeah, I think that now that they are you know,
Speaker 3: legally domiciled in Texas, it will be much harder to
Speaker 3: bring a lawsuit, in part because there's also like the
Speaker 3: shareholder that brought the lawsuit in Delaware was like it
Speaker 3: was like a pocket plainiff, right, Like it's you know,
Speaker 3: basically the way these things work is you have plainiffs
Speaker 3: attorneys who like find a plaintiff to bring suit, and
Speaker 3: the plaintiff might own like ten shares. It's gonna be
Speaker 3: much harder to do that in Texas, and you have
Speaker 3: to have a larger shareholder. So I just think that
Speaker 3: they moved to Texas for a reason and they've got
Speaker 3: a very favorable court system there. The proxy also has
Speaker 3: some interesting language about how Muscus to quote unquote like
Speaker 3: wind down his political work within a reasonable timeframe, but
Speaker 3: it doesn't exactly specify what that means, Like does that
Speaker 3: mean he can no longer like fund you know, candidates
Speaker 3: and like elections. Does it mean that he has to
Speaker 3: stop like, you know, ripping on politics on X Like
Speaker 3: It's very ill defined.
Speaker 5: Yeah, I mean he's been doing a lot of politicking
Speaker 5: over the last last couple of days even so I know,
Speaker 5: so I don't know.
Speaker 4: But is that just can eat politic abroad or is
Speaker 4: it just domestic politics or all politics? I mean, can you,
Speaker 4: I don't know, go on and on about UK politics
Speaker 4: as long as you don't mention US politics, Hey.
Speaker 5: Dana, just question the political thing? Is that this proposal
Speaker 5: for political neutrality or that's a different No, it's separate, Okay, Okay.
Speaker 3: There's a sharel of our resolution about political neutrality that
Speaker 3: the Tesla board is urging everyone to vote know on.
Speaker 3: But within the proxy itself there's language about how they
Speaker 3: would like Musk to wind down his political activities in
Speaker 3: a reasonable fashion.
Speaker 4: Dana, before we move on to Tesla and Xai, anything
Speaker 4: else we need to know about this package.
Speaker 3: I just would really encourage all listeners of the show
Speaker 3: and investors to actually read the proxy. It's over three
Speaker 3: hundred pages long. Three board members are up for reelection,
Speaker 3: there are sixteen resolutions. It's a big package. If you're
Speaker 3: an investor, you really need to read the proxy.
Speaker 4: You know, Max is funny. The other day, I think
Speaker 4: when we had talked about a similar musk package. But
Speaker 4: if Elon's worth one trillion dollars, come on, you can't
Speaker 4: tell me that I'm not worth a billion. That I
Speaker 4: don't I'm not one one thousandth right as good as Elon.
Speaker 2: Give me a give me a give me a billion.
Speaker 2: Misplayed this negotiation.
Speaker 5: You gotta spend uh, you gotta start a political party,
Speaker 5: spend months fighting with the president. There's just a lot
Speaker 5: of lot of you haven't done that. Elon has done that.
Speaker 4: That fine, pam, Okay. So we're now joined by Bloomberg
Speaker 4: Ace Tech reporter Kurt Wagner. Kurt, Hello, and Kurt, by
Speaker 4: the way, no hard feelings. I think the last time
Speaker 4: I introduced you, it got you know, I kind of
Speaker 4: got in your face.
Speaker 2: You're good with that. We're good, We're cool.
Speaker 1: I'm sorry, who's talking to me about your name against sir?
Speaker 2: Of course we're good.
Speaker 1: We're always good on this pod. Yeah, that's all good.
Speaker 4: Welcome back, Hurt. So listen, we just talked about the
Speaker 4: pay package, which will be voted on at the shareholder
Speaker 4: meeting and no members six and then shareholders are also
Speaker 4: going to vote on whether Tesla should go ahead and
Speaker 4: invest in Xai tell Us a little bit about what
Speaker 4: this investment would look like.
Speaker 1: So Xai is Elon Musk's ai startup. It's been around
Speaker 1: for a little over two years now, and it's been
Speaker 1: raising money like crazy because the company is out buying
Speaker 1: all these expensive GPUs and data centers and trying to
Speaker 1: keep pace with the open aies of the world, the
Speaker 1: Googles of the world on the ai race, and so
Speaker 1: Elon has been fundraising heavily. He has talked publicly on
Speaker 1: several occasions on his x account about the idea of
Speaker 1: Tesla becoming an investor in Xai. But you know, instead
Speaker 1: of just simply making that decision himself, he says, we
Speaker 1: are going to put this to a shareholder vote, and
Speaker 1: so that is what will happen in November, is that
Speaker 1: the shareholders will decide should they essentially encourage the board
Speaker 1: to invest in Xai. Now, there's a few things I
Speaker 1: would point out, at least my interpretation of the proxy.
Speaker 1: The first is that they're not stipulating a dollar amount.
Speaker 1: They would leave that up to the board. Whatever the
Speaker 1: board deems appropriate would be sort of the decision here.
Speaker 1: But second, I my understanding, if you go to page
Speaker 1: one seventy six of the proxy. I'm sure everybody has
Speaker 1: been scouring this thing. It seems that this is a recommendation.
Speaker 1: It is not a binding vote. So even if shareholders
Speaker 1: say yes, we should invest inn XA, or even know
Speaker 1: we should not, those are just recommendations from shareholders. My
Speaker 1: understanding is that the board can make this decision one
Speaker 1: way or the other on its own, regardless of the
Speaker 1: outcome of.
Speaker 4: The vote, So non binding. In other words, to eat right. Indeed,
Speaker 4: even if shareholders this doesn't seem terribly likely, but shareholders
Speaker 4: say no, we're not going for this, the board just says, hey, no,
Speaker 4: we're going to do it anyways.
Speaker 1: That's my understanding. You know, it says that it's a
Speaker 1: non binding vote and that the board will continue to
Speaker 1: invest in AI based on its fiduciary responsibility. So in theory,
Speaker 1: even if shareholders say, please, don't do this, but the
Speaker 1: board believes it's in the best interest of shareholders. Okay,
Speaker 1: My again reading of it is that they can kind
Speaker 1: of make the decision they want, right.
Speaker 4: So Max, I ask you, sir, is this a bailout
Speaker 4: for Xai and Albatross going forward for Tesla or a
Speaker 4: great opportunity because what's hotter in the world, my friend
Speaker 4: than Ai.
Speaker 5: I mean it could be either, right, and I think
Speaker 5: if you're looking at Tesla like a normal company, this
Speaker 5: would be insane. I mean, you have a CEO who
Speaker 5: is ostensibly working on AI, the hottest industry there is,
Speaker 5: who has a side project started this other ostensibly maybe
Speaker 5: competing AI thing, kind of started.
Speaker 2: Poaching competing with Tesla. He's poaching employees. Xai is poaching
Speaker 2: from Tesla.
Speaker 5: Well, their employees have gone from Tesla at XAI. I
Speaker 5: don't think Elon Musk would would do something as as
Speaker 5: ruthless as try to try to poach employees from one.
Speaker 2: Company to the other.
Speaker 5: But I'm just saying, like from a normal perspective, like
Speaker 5: this is crazy. It raises so many different issues. From
Speaker 5: an Elon in perspective, I hate to say it, but
Speaker 5: it's totally normal. This is just like this is like
Speaker 5: Elon being Elon. He in so many different ways, doesn't
Speaker 5: operate as if these companies are separate. I'm sure that
Speaker 5: we're good reasons in his mind to create Xai as
Speaker 5: a separate and he allows it to raise money, you know,
Speaker 5: on private markets take advantage of this boom and venture
Speaker 5: capital like you can probably compensate these AI engineers in
Speaker 5: ways that are are helpful if you're especially if you're
Speaker 5: trying to recruit from some of the other privately held
Speaker 5: AI companies. So so, I don't know, I mean, it
Speaker 5: seems like this could turn into an albatross at the time.
Speaker 5: I think in retrospect, Tesla's purchase of Solar City, which
Speaker 5: Elon Musk also co founded.
Speaker 4: Yeah, I was gonna go there. So now that you've
Speaker 4: jumped the shark, so tell us remind us a little
Speaker 4: bit about the Tesla Solar City saga from years ago.
Speaker 5: Well, right, So, so Elon Musk started this solar company,
Speaker 5: Solar City, that went public and then ran into a
Speaker 5: lot of issues. Basically, it's its main business, which was
Speaker 5: installing solar panels, became less and less profitable, and Tesla
Speaker 5: eventually bought it in what, at the time to some
Speaker 5: critics looked like a bailout. I think in retrospect it
Speaker 5: does look that way, because Tesla has not done as
Speaker 5: much with solar than as I think some some sort
Speaker 5: of solar fans, you know, would have hoped. I think,
Speaker 5: you know, we could look back at this that way.
Speaker 5: On the other hand, you know, if when the singularity
Speaker 5: comes and when we're all praying to our robot gods
Speaker 5: and they're not already Yeah, not me, but I know
Speaker 5: that I understand that some are. But you know, maybe
Speaker 5: this will look like a smart move if Tesla's in
Speaker 5: the AI business, Elon Musk is somewhat distracted, has this
Speaker 5: other AI company. I do get the argument that even
Speaker 5: if you're just a Tesla shareholder being totally kind of
Speaker 5: rational about this, that you would just say it'd be
Speaker 5: better if these were one thing.
Speaker 2: Dnaholl what say you?
Speaker 3: Well, this is where related party transactions get super interesting
Speaker 3: because you have to remember that Xai is a customer
Speaker 3: of Tesla. Tesla sells their megapacks, which are the batteries
Speaker 3: that power utilities, you know, the big energy storage product
Speaker 3: that Tesla is banking on to Xai. This data center
Speaker 3: in Memphis that Xai is building is like now filled
Speaker 3: with megapacks. And so there's a lot of ways in
Speaker 3: which the companies are already overlapping with each other. Groc
Speaker 3: is now being integrated into Tesla's cars. So I guess
Speaker 3: I'm curious for Kurt, like, do you think there's do
Speaker 3: you think that Tesla would buy Xai or would like
Speaker 3: which vehicle is more important to elon going forward?
Speaker 4: Before you answer that question, Kurt, I will say, right,
Speaker 4: so you have Xai buys x right, indeed, now does
Speaker 4: Tesla buy Xai or to I mean, like one fish
Speaker 4: keeps eating the other, what's the next fish to get
Speaker 4: consumed here?
Speaker 1: I think it really depends on the amount of money invested.
Speaker 1: We saw SpaceX, for example, already invest in Xai, and
Speaker 1: I believe it was a two billion dollar investment. In
Speaker 1: the world of tech right now, and certainly in the
Speaker 1: world of AI, that's relatively small, right. This is not
Speaker 1: a massive we are chaining ourselves to this company forever
Speaker 1: and if they go down, we go down with them
Speaker 1: kind of situation. And so if that's what we see
Speaker 1: from Tesla, is you know, hey, here's two billion dollars,
Speaker 1: here's five billion dollars. Other than the fact that it's
Speaker 1: a massive conflict of interest, I think we probably all
Speaker 1: agree this same person running two companies. I don't think
Speaker 1: it's that dramatic of an idea to say, hey, there's
Speaker 1: this up and coming AI startup, let's pick our horse here.
Speaker 1: If they decide to go the opposite, and I think
Speaker 1: Xai is raising money somewhere around two hundred billion dollars
Speaker 1: or something like that. So if Tesla were to try
Speaker 1: to swallow this whale hole, that is where I think
Speaker 1: things become incredibly not only you know, probably inappropriate if
Speaker 1: you're a Tesla shareholder, but become much more potentially damaging
Speaker 1: for Tesla too, because now all of a sudden, you
Speaker 1: are in that situation where if Xai goes down, you're
Speaker 1: probably going to have a meaningful decline with it. And
Speaker 1: so until we know the investment amount, it's a little
Speaker 1: bit hard for me to say whether this is like
Speaker 1: the worst idea or the best idea ever. We have
Speaker 1: heard Elon say he doesn't believe Tesla should buy Xai.
Speaker 1: Now we all know that Elon's saying one thing doesn't
Speaker 1: necessarily make it so, But as far as what he
Speaker 1: has said publicly, he sees this as an investment, not
Speaker 1: an acquisition, And I think until we know the dollar amount,
Speaker 1: we kind of have to reserve a little bit.
Speaker 3: And he did a poll a while back where he
Speaker 3: floated the idea of was it wasn't it five billion?
Speaker 3: But then the I think it was five billion, and figure.
Speaker 2: But then what were what were the pole results? It's
Speaker 2: like flat putin.
Speaker 1: Well, you'd be shocked, David to learn that the pole
Speaker 1: that Elon put out on X was in favor of
Speaker 1: such a thing. So I'm sure that's surprising.
Speaker 5: Even at two billion or five billion or whatever. Sure, Like,
Speaker 5: what's the argument for a Tesla shareholder that this is
Speaker 5: a good use of their cash because like they could
Speaker 5: also invest in open Ai or Anthropic or one.
Speaker 2: Of the other.
Speaker 5: I don't understand, except like, what's gonna make our CEO happy?
Speaker 5: And he's gonna he's gonna baby be happy, like if
Speaker 5: a happy Elon is a happy Tesla, Like.
Speaker 4: I mean, like, what's going to go out and sink
Speaker 4: money at the Sam Altman's company. Come on, he'll be
Speaker 4: He'll go around Poudy phase for months.
Speaker 1: Two things, one part of the investments, like, yes, could
Speaker 1: they invest two billion dollars in open Ai they I'm
Speaker 1: sure sureholders would. But the open ay is not going
Speaker 1: to take Elon in Tesla's money, right, So okay, So
Speaker 1: some of these avenues are close to them. But the
Speaker 1: thing you just said actually in Elon Inc. In the
Speaker 1: world of Elon, is a real thing, like do you
Speaker 1: keep Elon happy, do you keep him motivated? Do you
Speaker 1: keep him feeling like, yeah, spending money on and time
Speaker 1: on his Ai startup? That does not benefit a Tesla shareholder.
Speaker 1: And so if you're sitting there saying, hey, I think
Speaker 1: Xai and everything Elon touches is going to go from
Speaker 1: two hundred billion to a trillion, then you're a shareholder
Speaker 1: saying this is my chance to five x my my
Speaker 1: investment in Xai. So again, these are all hypothetical, but
Speaker 1: you have to and I know you know this, Max,
Speaker 1: but if you are an Elon fan and Elon stan
Speaker 1: and investor, this is the way you think of it
Speaker 1: is that you are building and buying into the world
Speaker 1: of Elon Musk. And that's what makes sense, I think
Speaker 1: to a lot of people.
Speaker 4: All Right, Dane, so you told us the Musk pay
Speaker 4: package totally sales through November six, So too, then does
Speaker 4: does this one? Whether it turns out to be exactly
Speaker 4: binding or not, this one gets thumbs up from shareholders.
Speaker 3: As well, I think. So, I mean Elon has signed
Speaker 3: that he approves it, and we have to remember that
Speaker 3: Tesla has a very engaged shareholder base. Retail investors actually
Speaker 3: do vote their shares. You know, the board will be
Speaker 3: doing a lot of discussions with the big institutional investors,
Speaker 3: and I'm sure they'll be campaigns around these various items
Speaker 3: that will be before everyone.
Speaker 5: I mean, if you do think about the challenges that
Speaker 5: some of these AI companies face, which is that, like
Speaker 5: it's not clear that the returns from using large language
Speaker 5: models are awesome. You also wonder, like how easy is
Speaker 5: it going to be for them to say, like double
Speaker 5: sales from where they are now. Like, obviously a lot
Speaker 5: of big companies are purchasing licenses for large language models.
Speaker 5: This is potentially a growth field, Like if you buy
Speaker 5: into the idea that Elon's going to put a million
Speaker 5: starts on a million optimizer year or whatever, like this
Speaker 5: is definitely perhaps a more promising growth channel than like
Speaker 5: Rock's current like number one revenue stream, which is I
Speaker 5: think memes.
Speaker 2: Basically, yeah, that's a big that's a big business.
Speaker 1: Soon to be video games, and I think like an
Speaker 1: AI movie.
Speaker 4: So for posterity, here here's my call. Right Indeed, Xai
Speaker 4: bought X, Tesla will at some point in the not
Speaker 4: so distant future buy XAI SpaceX, then buys Tesla and
Speaker 4: then the last one. The US government buys the whole thing,
Speaker 4: buy SpaceX.
Speaker 1: For fifty dollars the Russian nestindl of Ink.
Speaker 4: All right, let's sen Kurt stick with us for a
Speaker 4: second here, because we're actually this is a little gift
Speaker 4: that we were handed. In a story from Politico yesterdays,
Speaker 4: I feel like we have another. Cage match is still
Speaker 4: a thing, Max. We haven't done a cage match in
Speaker 4: a long long time. But you remember the Scott Bess
Speaker 4: and Elon musk Uh streaming match where apparently there was
Speaker 4: even maybe a little there was a little freakus.
Speaker 2: There was a little altercation, a little rough housing.
Speaker 5: There are some reports of a shove, I believe maybe
Speaker 5: like a physical alter It depends on who you're who
Speaker 5: you're listening to. I think Steve Bannon mentioned a physical something,
Speaker 5: a physical present.
Speaker 2: Elon is a big guy. Yeah, he's a pretty big.
Speaker 4: Guy too, And apparently at one point bessn't the Treasury secretary.
Speaker 4: This is back when Elon was in Washington twenty four
Speaker 4: to seven, back in the winter and early spring. Best
Speaker 4: In at one point it said to musk as they
Speaker 4: were going nose to nose about some some point or another.
Speaker 2: You you you now.
Speaker 4: At the time, we all thought and assumed it was
Speaker 4: just Musk that like, you know, obviously Musk.
Speaker 2: Had just brought it out of it, brought it out
Speaker 2: of him Ian.
Speaker 4: I think the Atlantic wrote that, you know, Musk brought
Speaker 4: it out of this mild mannered billionaire. Turns out, we
Speaker 4: find out this week Scott Bessen is no mild mannered billionaire.
Speaker 4: He and Bill Poulty, right of of now rising fame,
Speaker 4: head of the Federal Housing Finance Agency and a and
Speaker 4: a prominent Trump loyalist, went toe to toe themselves just
Speaker 4: the other day, with Bessen getting in Poultice's face and
Speaker 4: saying to him, why the are you talking to the
Speaker 4: president about me? He likes the word I'm noticing here,
Speaker 4: I'm gonna punch you in your face, So.
Speaker 5: The same phrase basically.
Speaker 4: So kind of yes, the same word at least. So
Speaker 4: what I'm thinking is it's either the best in Musk.
Speaker 4: One has to happen, because Besson still seems like he's
Speaker 4: got some of these anger, some of the animosity I
Speaker 4: feel like is still for Musk, or so we get that,
Speaker 4: make that happen, or we go the three of them
Speaker 4: are ringing.
Speaker 5: So, Okay, I'm really glad you brought this up, David.
Speaker 5: This really brings up a lot of important questions. I
Speaker 5: think you're right that you could you could say, well, actually,
Speaker 5: what we've learned is that Scott Beson is just like
Speaker 5: a guy likes to pix it up, you know, who
Speaker 5: can get physical, and that reputation of being mild mannered
Speaker 5: was like not true all along, and we just you know,
Speaker 5: we were lulled into that sense. But he has a
Speaker 5: Southern accent, he's from like us. He seems like a
Speaker 5: you know whatever. But anyway, I think what it could
Speaker 5: be is that bessent't like essentially was transformed by this
Speaker 5: experience with Musk.
Speaker 2: Now, recall that I'm.
Speaker 5: Joking mostly, but I do think you think about the
Speaker 5: conflict between the two men, it was not clear to
Speaker 5: me or I think to anyone else, that Bessnt prevails
Speaker 5: in that conflict. Remember, Elon is Trump's number one donor.
Speaker 5: He's like the the certified best friend. He's in family photos, like, like,
Speaker 5: who is Scott Besson? Exactly right, He's a prominent hedge
Speaker 5: fund guy, but certainly not as high profile as Elon Musk.
Speaker 5: It would have been possible for Bessint to go toe
Speaker 5: to toe with Elon Musk and for this to end
Speaker 5: with bessentt in some kind of weird Oval office exit
Speaker 5: with his own black eye, just like Elon had hot,
Speaker 5: But instead it ended with Elon of Cour exiting the
Speaker 5: Trump administration, essentially like Taylor.
Speaker 2: Well, you're telling me best, I'm saying Bolden.
Speaker 5: In Bolden, he has figured out like this is this
Speaker 5: could be a way to take on.
Speaker 4: Mosk and Bolden he turned Scott Besson into a different man.
Speaker 4: Kurt Wagner, what say you?
Speaker 1: Oh my gosh, I mean, I feel like the least
Speaker 1: qualified person to comment on this thing. But what I
Speaker 1: will say is that we have seen instance defense several
Speaker 1: instances here of Elon also sort of picking some fights
Speaker 1: with people. So I think we just have two two
Speaker 1: rowdy boys over there who are trying to who are
Speaker 1: trying to show their uh this.
Speaker 5: Is I mean, this gets this gets pretty far removed
Speaker 5: from Elon, But I think this is an intelligent way
Speaker 5: to deal with a rival in the Trump administration. And
Speaker 5: that is what Scott Bessont learned in the Elon thing.
Speaker 5: Because the way these feuds play out is in the media.
Speaker 5: The way you get media attention is yeah, by like
Speaker 5: a big room of people to reporters and and sam
Speaker 5: f word, which I would never do.
Speaker 4: I feel like Dana, this conversation is beneath Dana.
Speaker 2: She's just she's written.
Speaker 1: Over here, like breaking news or answers, embarrassing ourselves exactly.
Speaker 4: Someone's got to work around here. All right, good stuff, Kurt,
Speaker 4: thank you for joining. Thank you, Dana, Max brilliant as always.
Speaker 5: Of course, always great to be with you, David and
Speaker 5: Dana and Kurt.
Speaker 4: This episode was produced by Stacy Wong and edited by Annamasirakas,
Speaker 4: Blake Maples handles engineering, and Dave Purcell fact checks. Delon
Speaker 4: Ink theme is written and performed by Taki Yasusau and
Speaker 4: Alex Sugiurra. Our supervising producer is Magnus Hendrickson. Sage Bauman
Speaker 4: is the head of Bloomberg Podcasts. A big thanks to
Speaker 4: our supporters Joel Weber and Brad Stone.
Speaker 2: I'm David Papadopolis.
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