Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Well, Elon Musk is now the richest person on the planet.
Speaker 1: More than half the satellites in space are owned and
Speaker 1: controlled by one man.
Speaker 3: Well, he's a legitimate super genius.
Speaker 1: I mean legitimate.
Speaker 4: He says he's always voted for Democrats, but this year
Speaker 4: it will be different.
Speaker 2: He'll vote Republican.
Speaker 1: There is a reason the US government is so reliant
Speaker 1: on him. Alon Musk is a scam artist and he's
Speaker 1: done nothing.
Speaker 2: Anything he does, he's fascinating people. Welcome to Elon, Inc,
Speaker 2: Bloomberg's weekly podcast about Elon Musk.
Speaker 3: It's Tuesday, August sixth.
Speaker 2: I'm your host, Max Chafkin, filling in for David Papadopolis.
Speaker 2: Is dominating the news today with the vice presidential pick
Speaker 2: being announced. But in the world of markets and money,
Speaker 2: which is to say, our world, all the conversation has
Speaker 2: been around the big sell off that happened in Asian
Speaker 2: markets on Monday, and that has continued to reverberate. Here
Speaker 2: in the US, stocks took a big hit yesterday, but.
Speaker 3: They're rebounding today.
Speaker 2: But really, like all of this kind of chaos and
Speaker 2: the lingering fears of a recession are leading to some
Speaker 2: really hard questions about what it means for markets in
Speaker 2: general and in particular the technology industry.
Speaker 3: There have been questions sort of.
Speaker 2: Building up over the last year that the hype around
Speaker 2: AI artificial intelligence might be overblown, that we might be
Speaker 2: in the middle of a bubble, and this week people
Speaker 2: are starting to really seriously ask is that bubble starting
Speaker 2: to burst? This would have huge implications for Elon Musk
Speaker 2: and for the world, but in particularly for Elon because
Speaker 2: he's staked his, you know, the future of Tesla on AI,
Speaker 2: the future of several of his company, including x.
Speaker 3: And his AI company Xai.
Speaker 2: We're going to be talking today to Bloomberg's Big Tech
Speaker 2: editor Sarah Fryer and social platform reporter Kurt Wagner about
Speaker 2: all this market action.
Speaker 3: Kurt, Sarah, thank you for being on Elon.
Speaker 5: K, thanks for having me.
Speaker 6: Yeah, thank you, Max.
Speaker 2: And then later we're going to share another one of
Speaker 2: our conversations as part of our great summer series of
Speaker 2: deep chats. Today's is one that I had with the
Speaker 2: two Texas based journalists, Rachel Monroe and Chris Hooks. Okay,
Speaker 2: so let's get to it. Sarah, what did the tech
Speaker 2: world wake up to on Monday morning? What did Elon
Speaker 2: Musk wake up to on Monday morning?
Speaker 5: I mean every market indicator was down, Nickay down, you
Speaker 5: got Crypto go down, the Vix up, volatility, and investors
Speaker 5: piles into bonds like it was just like a whole
Speaker 5: out panic. Those are some economic indicators driving this, some
Speaker 5: US economic strength indicators. But there's also this fear brewing
Speaker 5: for big tech companies that they have maybe promised and
Speaker 5: invested more than they've delivered or even are showing signs
Speaker 5: of being able to deliver in AI. The whole growth
Speaker 5: plan in AI is going to cost billions upon billions
Speaker 5: of dollars, and it's not clear that that is translating
Speaker 5: into better revenue, certainly not better profits, and that is
Speaker 5: causing a lot of concern. I'm here in Silicon Valley.
Speaker 5: I feel like I've had a little bit more of
Speaker 5: the kool a than Wall Street, so I've seen a
Speaker 5: lot more in terms of what AI is changing about
Speaker 5: how people work than maybe the market has. That said,
Speaker 5: i mean, you know, the way that stocks have clined
Speaker 5: on the promise of AI has been just astounding, and
Speaker 5: the amount of money pouring into it is maybe unsustainable.
Speaker 3: Yeah.
Speaker 2: I mean, I feel like the conversation that we've had
Speaker 2: had on this podcast for the last year about kind
Speaker 2: of Elon Musk's promises around AI and Tesla, or promises
Speaker 2: around AI and Rock. I mean that's been happening at
Speaker 2: like kind of every tech company, right, Kurt.
Speaker 3: Yeah.
Speaker 6: And I was going to say, I think something that
Speaker 6: Mark Zuckerberg at metas said a few weeks ago to
Speaker 6: our very own Emily Chang.
Speaker 2: I was.
Speaker 6: I was in the room down at Meta's headquarters when
Speaker 6: she interviewed him, and he basically said, there's a very
Speaker 6: real possibility we're all spending billions of dollars too much
Speaker 6: money right now to chase this thing, because the fear
Speaker 6: of missing out is so high, right, So, in other words,
Speaker 6: we're willing to overspend. We know even that we're overspending
Speaker 6: on AI right now. We're over indexing that way because
Speaker 6: you can't afford to not do it. And so I think,
Speaker 6: you know, we may see some short term repercussions of
Speaker 6: that overspend, which is going to be you know, a
Speaker 6: dip or a little bubble or whatever it may be.
Speaker 6: But I think that gives you a glimpse into the
Speaker 6: mindset of the leaders of these companies, because I imagine
Speaker 6: if Mark Zuckerberg feel way, that's sort of probably how
Speaker 6: a lot of these guys feel, is that they have
Speaker 6: to have to have to spend.
Speaker 5: It was just so wild too. When Kurt showed me
Speaker 5: that quote, I was just like imagine just being like, yeah,
Speaker 5: we may be overspending by billions of dollars, but that's
Speaker 5: just how we roll when we need to do something
Speaker 5: like this.
Speaker 3: Yeah, it's for AI. So it's all good. I mean
Speaker 3: not a good sign.
Speaker 2: And I mean, you know, just to sort of put
Speaker 2: something more specific on what you were saying, Sarah, I mean,
Speaker 2: there's been a lot of talk about and obviously a
Speaker 2: lot of successful products and and sort of demonstrations around AI.
Speaker 2: Just like not a lot of revenue coming in to
Speaker 2: these companies, at least not yet. And let's just bring
Speaker 2: it around to Elon. I mean, what does this mean
Speaker 2: for him? I mean, if the AI bubble is bursting,
Speaker 2: I mean he's been going around saying you're gonna be
Speaker 2: You're wrong to think about Tesla as a car company.
Speaker 2: You should think about as an AI company. Are we
Speaker 2: gonna get on the earnings call? Like you know, a
Speaker 2: few months from now, and he's gonna say, actually, if
Speaker 2: you think about Tesla as an AI company, you got
Speaker 2: it all wrong.
Speaker 3: You got to think about it as a car company.
Speaker 3: Cars are the thing.
Speaker 5: There's no way that he could achieve, you know, the
Speaker 5: valuation that he's achieved by just calling it a car company.
Speaker 5: It needs to be something more. It needs to be
Speaker 5: a promise for the future. And at one point, Tesla
Speaker 5: is going to revolutionize the environment, right like it just
Speaker 5: there always has to be some bigger dream that people
Speaker 5: are chasing. And I think that's what's happening across big tech.
Speaker 5: All these companies are maturing, their legacy businesses aren't producing
Speaker 5: the level of growth that they used to, and so
Speaker 5: the leaders of these companies need to come up with
Speaker 5: another promise for what the future is going to hold
Speaker 5: and cast themselves in their companies almost like startups all
Speaker 5: over again. And in AI there is some way of
Speaker 5: believing that the big tech companies will continue to lead,
Speaker 5: if only because it is so expensive to develop an
Speaker 5: AI that it is one of those markets where you
Speaker 5: might not get the rug taken under you by an
Speaker 5: upcoming company that is just building something in the garage,
Speaker 5: right you really need do need capital to do this?
Speaker 5: And the big top companies have capital.
Speaker 2: Yeah, speaking of capital, I mean shortly after the Tesla
Speaker 2: learnings called, Elon Musk floated the idea in a poll
Speaker 2: I believe, right right, Kurt of a Tesla making an
Speaker 2: investment in x dot Xai, which had me kind of wondering, like,
Speaker 2: what do we even know about is I mean beyond Grock,
Speaker 2: what is x Ai? Like? Where does XAI sit right now?
Speaker 2: And should we think about this as an investment or
Speaker 2: is it more of a you know, a bailout, a
Speaker 2: way for Elon must to absorb some of those very
Speaker 2: high costs that Sarah's talking about.
Speaker 6: Well, Xai, I'll start with the first part of that question,
Speaker 6: is still a bit of a mystery, quite frankly. I mean,
Speaker 6: we don't know a ton about it. We included it
Speaker 6: on a list of our you know, ten Ai companies
Speaker 6: to watch here at Bloomberg. I was struggling, honestly to
Speaker 6: figure out exactly where the headquarters of Xai are, Like
Speaker 6: very basic stuff, right, I mean, well, we know they
Speaker 6: have an office in Palo Alto. I think they list Austin,
Speaker 6: Texas as their official headquarters on some documents, but then
Speaker 6: they were you know, created in Nevada. So it's like
Speaker 6: even just the basics around where this company exists are
Speaker 6: not always clear, which sort of gives you a flavor
Speaker 6: of sort of how they operate. But I think in
Speaker 6: terms of like what does this look like? You know,
Speaker 6: to go back to what Sarah was talking about, just
Speaker 6: about the broader stock market and how it impacts Elon
Speaker 6: in particular, this is someone whose vast majority of his
Speaker 6: wealth is tied up in Tesla, which is therefore dependent on,
Speaker 6: you know, the success of that stock and the broader
Speaker 6: stock market. When things go down, he doesn't have the
Speaker 6: liquidity that he needs or wants to do all these
Speaker 6: other projects that he has right boring company Xai even
Speaker 6: x And we saw this play out when he tried
Speaker 6: to buy Twitter a few years ago, right the stock
Speaker 6: market went down at the worst possible time for him,
Speaker 6: and what happened. He spent all summer trying to fight
Speaker 6: to get out of that deal. So I think he
Speaker 6: is more susceptible to a stock market decline than most
Speaker 6: simply because of all these other endeavors he has going
Speaker 6: on and the fact that he needs his Tesla wealth
Speaker 6: to sort of either fund those directly or use those
Speaker 6: Tesla shares as collateral to get money for these their
Speaker 6: businesses that he's running.
Speaker 2: The thing that I find like most striking about this
Speaker 2: is just that, you know, open Ai, which is widely
Speaker 2: regarded as like the most successful of these companies, there
Speaker 2: are reports coming out that it is running short on cash,
Speaker 2: that it is going to have money, that it may
Speaker 2: even have trouble raising money. So you do wonder what
Speaker 2: does it mean. You know, what does it mean for
Speaker 2: Elon Musk? And on that note, the big news are
Speaker 2: one of the big pieces of news in Elon Land
Speaker 2: is that is a feud watch story. The open Ai
Speaker 2: x feud is back on right Sarah.
Speaker 5: There is another lawsuit that Elon Musk flung their way.
Speaker 5: It's just the continuation of this class we've talked about
Speaker 5: for months between Elon Musk and Sam Altman. He was
Speaker 5: one of the original founders of open Ai, funded a
Speaker 5: lot of the initial capital that was back when open
Speaker 5: Ai was supposed to be more of a nonprofit. Obviously
Speaker 5: they've gone the for profit direction. Musk is upset about that,
Speaker 5: but look, on the other hand, that's what he's doing
Speaker 5: with his own business. He's trying to build a for
Speaker 5: profit AI operation. So is this real legal problem or
Speaker 5: is this more trying to stall to buy time to win.
Speaker 2: Some fantastic writing in this complaint, The perfidity and deceit
Speaker 2: are of Shakespearean proportions.
Speaker 3: That was an improvement I think from the previous complay.
Speaker 2: Right, Kurt.
Speaker 6: I was reading about it this morning as well, trying
Speaker 6: to understand exactly what's different this time around, Right, because
Speaker 6: as Sarah and you pointed out, maxis is now the
Speaker 6: second lawsuit that's come about, and it's not entirely clear.
Speaker 6: I mean, it sounds like maybe they've honed in on,
Speaker 6: like the very specific stuff that they're claiming open Ai did,
Speaker 6: and so we'll see what ultimately happens. But I feel
Speaker 6: like now that he has a competing AI business of
Speaker 6: his own in X dot Ai, it's very you know,
Speaker 6: coincidental timing that he is suddenly taking this very aggressive
Speaker 6: stance and approach to open Ai, which, as Sarah pointed out,
Speaker 6: he's had a relationship with for a very long time.
Speaker 2: Let's leave the world of AI and markets and pivot
Speaker 2: to X A lot happening, oh for the weekend on Sunday,
Speaker 2: Elon Musk sort of started inserting himself into a conversation
Speaker 2: that's been kind of happening on the right, not just
Speaker 2: on x but on other social networks. Following me violent
Speaker 2: knifing attack in Southport, England, there was a lot of
Speaker 2: misinformation in the wake of that attack and implying that
Speaker 2: the attacker was either an immigrant or a Muslim or both.
Speaker 3: None of those things were true.
Speaker 2: There was violent rioting across the country and Elon Musk
Speaker 2: kind of threw himself into the middle of that, responding
Speaker 2: to a video that showed some of some of the rioting,
Speaker 2: saying civil war is inevitable, Sarah, what is going on?
Speaker 5: The riots in the UK are almost completely based on
Speaker 5: this flood of misinformation, much of it originated on telegram.
Speaker 5: But then this is the kind of content that is
Speaker 5: rewarded on X and by Elon himself. It's this anti
Speaker 5: immigrant mint. Even though authorities in the UK I have
Speaker 5: identified the person who stabbed those children as a UK citizen,
Speaker 5: all of the sentiment is you know, anti immigrant, anti foreigner,
Speaker 5: and resulting in these terrible riots all across the country.
Speaker 5: And really we haven't seen the platforms say or do much,
Speaker 5: not just X we haven't seen you know, Meta come
Speaker 5: out with a statement. Correct me if I'm wrong, Kurt.
Speaker 5: But the difference for Elon is he is actually personally
Speaker 5: fueling these ideas. He is responding to some of the
Speaker 5: conspiracy theorists, he's fueling some of the some of the
Speaker 5: racist language on the site.
Speaker 2: You have UK authorities saying, hey, listen, this is like
Speaker 2: people responding to misinformation and people really need to like
Speaker 2: settle down because it's leading to real violence. And instead
Speaker 2: of responding by trying to tone it down somehow, he
Speaker 2: tweets he legitimizes the violence, says this is this is
Speaker 2: the beginning.
Speaker 3: Of a civil war.
Speaker 2: I mean, extremely kind of edgy, you know, bordering on
Speaker 2: at least as authorities in the UK see it irresponsible.
Speaker 5: No, absolutely, And I think that this is like interesting
Speaker 5: in the context of another video that we saw today
Speaker 5: from Lynda Yakarino, where she is saying that X's is
Speaker 5: a victim here because none of the advertisers, they're all
Speaker 5: they're all conspiring against the platform and deciding not to
Speaker 5: put their money there and infringing on free speech. This
Speaker 5: is the kind of thing that advertisers don't want their
Speaker 5: promotions by and they know that this is toxic content.
Speaker 5: They know that this is leading to real world violence,
Speaker 5: and they don't want to be associated with it.
Speaker 2: I want us to do a new segment called Feud Walls,
Speaker 2: which is our feud watch for the Democratic vice presidential
Speaker 2: nominee Tim Walls. Kurt, what are the chances of a
Speaker 2: feud with Walls breaking out in the next seven days.
Speaker 6: In the next seven days, I'm gonna give it a
Speaker 6: ninety percent chance. I'm gonna go one hundred percent chance
Speaker 6: before the election. It's just a matter of time before
Speaker 6: Elon bans the word weird on X and says that
Speaker 6: anyone who calls someone else weird is now committee in
Speaker 6: some type of uh, you know, social accusation. That's just
Speaker 6: beyond the pale for this company. So I'm going to
Speaker 6: give it a ninety percent chance in the next seven days.
Speaker 5: I think we're gonna see it happen in the next
Speaker 5: seven hours.
Speaker 3: Like, you gotta give Wall's credit here.
Speaker 2: I mean, he's of the Elon Musk school of memory, right,
Speaker 2: he made weird happen. He's got these funny videos doing
Speaker 2: car repair like he really seems despite you know coming
Speaker 2: off as this nice Minnesota guy, he may have a
Speaker 2: little bit of poster in him. I think Kurt Sarah will.
Speaker 2: We'll be talking about this more, I'm sure over the
Speaker 2: next few months. Thanks for thanks for being.
Speaker 5: Here, Thanks for having us.
Speaker 6: Yep, thanks Max.
Speaker 3: Now we're going to go to Texas.
Speaker 2: Last week we talked about Elon's breakup with his old
Speaker 2: state California. Now we're going to dig into his romance
Speaker 2: with his new state, Texas. We talked about this earlier
Speaker 2: at the south By Southwest conference for our special episode,
Speaker 2: but we still had questions for some of our favorite
Speaker 2: Texas reporters. So I got on a zoom last month
Speaker 2: with Rachel Monroe, who covers the Southwest for The New Yorker,
Speaker 2: and Chris Hooks, who is a contributing editor for Texas
Speaker 2: Monthly and sometimes.
Speaker 3: A contributor to Bloomberg Business Week.
Speaker 2: The south By Southwest conversation was all about Elon's kind
Speaker 2: of identity as a Texan.
Speaker 3: Is he where the cowboy hat? What's his deal with
Speaker 3: the border.
Speaker 2: For this conversation, I wanted to ask Chris and Rachel
Speaker 2: how Elon Musk is changing Texas and how those changes,
Speaker 2: say you know what those changes say about the effect
Speaker 2: he's having on the wider world. His operation, just to
Speaker 2: refresh your memory, is enormous. You've got two factories in
Speaker 2: Austin or in the Austin area, one that makes cyber trucks,
Speaker 2: another one that'll make Starlink satellites. And then there's this
Speaker 2: crazy launch site in South Texas near the US Mexico
Speaker 2: border where the homes literally shake every time one of
Speaker 2: Musk's starship rockets takes off. For context, again, we record
Speaker 2: this last month, but with Elon pushing ever deeper into politics,
Speaker 2: and of course with SpaceX, you know, vuying for more
Speaker 2: government contracts couldn't be more relevant.
Speaker 3: Hope you enjoy the conversation. Rachel, welcome, Hi Max, great
Speaker 3: to be here. Chris welcome to Elon inc.
Speaker 1: Hey, guys's good to be here.
Speaker 2: Okay, So just to start, I want to talk about
Speaker 2: the geography in South Texas. Last year on the Joe
Speaker 2: Rogan podcast, Joe Rogan asked Elon Musk, Hey, how did
Speaker 2: you decide to locate your rocket site in Bocachica, which
Speaker 2: is just outside of Brownsville, And he basically said, oh, well,
Speaker 2: I spun the globe and it looked like a good
Speaker 2: place to do it. I mean, he completely dislocated from
Speaker 2: any sense of the place. But this is a place,
Speaker 2: and Rachel, can you just give us a sense of
Speaker 2: what it's like there at the SpaceX site, what Boka
Speaker 2: Chika is like.
Speaker 1: Sure.
Speaker 4: So, Bocachica, like you said, is outside the city of Brownsville.
Speaker 4: It's the very tip of Texas. It's where the Rio
Speaker 4: Grande flows into the Gulf of Mexico, and it's it's
Speaker 4: mostly surrounded by protected land, various wildlife refuges owned by
Speaker 4: the state, or the lot of shore birds and scrubland,
Speaker 4: and kind of used to be basically a neighborhood of
Speaker 4: intrepid people like this is the kind of place like
Speaker 4: the county doesn't build roads out there. You can't get
Speaker 4: city infrastructure. You have to get your water trucked in.
Speaker 4: So it was a place where you could buy like
Speaker 4: a cheap house, like a house for like fifty thousand
Speaker 4: dollars or something. It's basically, or it was for a
Speaker 4: long time, the last undeveloped part of the Texas Coast,
Speaker 4: or probably even the entire Gulf Coast, which is just
Speaker 4: dotted with refineries and industrial sites.
Speaker 3: Your story.
Speaker 2: I think called it the poor people's beach course, the
Speaker 2: poor people's beach for people in Brownsville, Chris.
Speaker 1: There's a conglomeration of cities in this southernmost part of Texas.
Speaker 1: Brownsville is one of them. Bokachka is about a half
Speaker 1: an hour maybe forty five minutes from Brownsville. Brownswelle is
Speaker 1: a poorer place. It's one of the poorer places in Texas.
Speaker 1: The major a lot of the major employers there are shipbreakers.
Speaker 1: There is an industrial field ship breakers. Ship breakers, so
Speaker 1: welders and other metal workers will take apart old ships.
Speaker 1: And before SpaceX came to Brownsville for a long time
Speaker 1: and the idea of an economic development project, there might
Speaker 1: be an old aircraft carrier gets towed around South America
Speaker 1: from Washington State and in Brownsville they break it up.
Speaker 1: It had been a place that had felt neglected for
Speaker 1: a long time. One thing they did have was access
Speaker 1: to natural beauty around Bokachica. It's not necessarily a place
Speaker 1: that you know, it doesn't look like a big sur
Speaker 1: but as far as Texas goes, this is a place
Speaker 1: that is remarkable because it's been undeveloped for so long.
Speaker 1: A lot of folks in Brownsville grew up going to
Speaker 1: Bokachica Beach have fond memories of it, and it's a
Speaker 1: place that I love. I went to the Gulf Coast
Speaker 1: a lot growing up, but the geographical features of the
Speaker 1: area kind of make it remarkable. There's a big protected
Speaker 1: bay called Laguna Madre nearby where dolphins and other animals gather.
Speaker 1: The beach at Bocachica is used by the Ridley sea turtle,
Speaker 1: an endangered sea turtle. It's also a very important place
Speaker 1: for migratory birds short birds, including a lot of birds
Speaker 1: that migrate for thousands of miles and have kind of
Speaker 1: generation after generation for one hundreds thousands or more years,
Speaker 1: relied on this place to lay eggs.
Speaker 2: So you're both talking about this unusual place, a lot
Speaker 2: of natural beauty, these animals, and Rachel your story which
Speaker 2: kind of in Esquire believe was a couple of years
Speaker 2: ago that kind of told the story of how Elon
Speaker 2: got there. It opened with this quote, which is from
Speaker 2: Elon Musk, and it was we got a lot of
Speaker 2: land with nobody around it, so if it blows up,
Speaker 2: it's cool, and so like, how did Elon get there
Speaker 2: give us the kind of short version of how this
Speaker 2: kind of awesomely empty as he saw at space essentially
Speaker 2: came to be his Yeah.
Speaker 4: So, And I should say first that in describing Bookachka
Speaker 4: as the poor people's beach, that's a statement made with
Speaker 4: a lot of pride. That's not a derogatory statement. When
Speaker 4: people say that, people are like, no, this is our beach.
Speaker 4: You don't have to pay to come here. We come here,
Speaker 4: we fish, we grill, we love it, And that's a
Speaker 4: statement of ownership. And so again, of course it's not
Speaker 4: an empty place. That's definitely not true that there's no
Speaker 4: one there. But Elon comes to Texas after having started
Speaker 4: out some SpaceX launch sites in other places where he
Speaker 4: just you know, you're mostly launching out of government run
Speaker 4: sites which have their own levels of regulation, and here
Speaker 4: you have a place of undeveloped land, and the land
Speaker 4: was quite cheap, partially because there were no services out there.
Speaker 4: And it's also I should say it has in the
Speaker 4: past been like a hurricane ravaged place.
Speaker 7: When I first visited, it had this vary.
Speaker 4: Boogie feeling of you could see some of the ruins
Speaker 4: of the things that had been built there, nobody had
Speaker 4: built a huge resort that then just got totally washed away,
Speaker 4: And so I think people looked at this space with
Speaker 4: you know, one road that washed out a lot, hurricane potential,
Speaker 4: no city or county services for the most part, surrounded
Speaker 4: by this protected land, and thought this is not worth
Speaker 4: messing with.
Speaker 2: So what But he goes to local leaders and says,
Speaker 2: I want to build a spaceport and they say, sure,
Speaker 2: come on in or.
Speaker 4: I mean yeah, for the most part, this is an area,
Speaker 4: like Chris was saying, like there's a lot of desire
Speaker 4: for economic development in this area because it has been
Speaker 4: so underdeveloped for so long. I thought a PowerPoint presentation
Speaker 4: that the Cameron County officials gave to kind of say
Speaker 4: like we should approve you know, these tax bicks that
Speaker 4: were giving to Elin, and it had him dressed up
Speaker 4: as Iron Man. They're like, fully buying a superhero is
Speaker 4: coming here to save us story.
Speaker 2: Most these people, most people work for him, are living
Speaker 2: in Brownsville, I assume, and driving out what is how
Speaker 2: forty five minutes or something to get to get to
Speaker 2: the beach, and what do they see when they get there?
Speaker 3: What's the operation look like?
Speaker 1: Yeah, I mean it's quite different than from a place
Speaker 1: like Cape Canaveral, which is in this enormous facility and
Speaker 1: a huge institution and a source of national pride. So
Speaker 1: the launch pad is directly adjacent to a road, and
Speaker 1: if you go down there on a given day, there
Speaker 1: will be a line of Tesla's right next to where
Speaker 1: the rocket is being assembled, and there will be people
Speaker 1: walking around and admiring it. The local residents at Bocachica,
Speaker 1: distinct from the people in Brownsville, feel that there was
Speaker 1: a bait and switch that happened where they were initially
Speaker 1: told that there would be a small launch pad, they thought, oh,
Speaker 1: that's very interesting. Initially they were launching much smaller rockets
Speaker 1: than they're launching right now, and there was the idea
Speaker 1: that this small community could maybe coexist with this facility.
Speaker 1: What's happened over the years is that this BaseX facility
Speaker 1: has expanded, launching much bigger rockets than they used to,
Speaker 1: but how big. The small town that used to be
Speaker 1: there is gone, or it's used for it's been renovated,
Speaker 1: it's used for housing for workers. The prior residents have
Speaker 1: been kicked out. Some of them feel that the county
Speaker 1: kind of used un ethical or improper means to kick
Speaker 1: them out. The entire area has become a large SpaceX
Speaker 1: compound and it's slowly growing. They're attempting to get new
Speaker 1: land from the wildlife reserve. There is a small road
Speaker 1: that connects Brownsville to Bocachica. It's filled with workers most days,
Speaker 1: and the influence of this area has expanded into Brownsville.
Speaker 1: People in Brownsville feel that the town is giving itself
Speaker 1: over to this company.
Speaker 3: Yeah, I mean, I you're.
Speaker 2: Sort of mentions this in which I found surprising, although
Speaker 2: maybe I shouldn't have that. SpaceX is the biggest employer
Speaker 2: in Brownsville.
Speaker 3: And of course Elon lives there.
Speaker 2: Elon has moved or taken over one of these small
Speaker 2: homes in what was Bokachica, right, Rachel.
Speaker 4: Yeah, I mean it's so funny. It was very funny
Speaker 4: to go down there. I sort of had the fortune
Speaker 4: to spend some time there at this moment of flux.
Speaker 4: Like Chris is saying, it's basically all been taken over
Speaker 4: by SpaceX now, but when I visited, it was still
Speaker 4: in this kind of in between zone where you had
Speaker 4: these people with these houses that were just decorated with
Speaker 4: shells that they had found, like retirees, and then every
Speaker 4: other house would be painted that kind of like slate
Speaker 4: Airbnb gray, you know, with like a zeroescaped front yard
Speaker 4: and a Tesla parked in front of it. You could
Speaker 4: just see that energy taking over. And Yeah, one of
Speaker 4: those houses was Elons, And so you had this very
Speaker 4: strange situation where there were people who at the time
Speaker 4: were fighting SpaceX trying to take their houses through eminent domain,
Speaker 4: which of course is supposed to be used for projects
Speaker 4: that benefit the public good, not necessarily a private company.
Speaker 4: So they're battling this company while they're like living next
Speaker 4: to Elon and seeing him out walking his dog. It's
Speaker 4: a very surreal situation.
Speaker 2: The image of Elon walking his dog, There's something about
Speaker 2: that is hard to picture, but I guess he does
Speaker 2: have a dog and dogs need to be walked. So
Speaker 2: the Chris Your piece and the Times like it opens
Speaker 2: with this really visceral image, right of a person essentially
Speaker 2: being shaken awake by a rocket going off.
Speaker 3: This is in Brownswelle.
Speaker 2: This is like a long distance from the actual rocket itself.
Speaker 3: Like, how big are these explosions?
Speaker 1: Yeah, I think I talked to a man named Noel
Speaker 1: Rangele who was woken woken up by the launch of
Speaker 1: one of the starship Super Heavy. I mean, part of
Speaker 1: the transition that Brownsville has been making is that they
Speaker 1: started out launching these Falcon rockets, which were much smaller,
Speaker 1: and they are now presented with these enormous explosions happening
Speaker 1: regularly near the town. Sometimes the rockets blow up, they
Speaker 1: blow up at different stages. Sometimes they distribute debris over
Speaker 1: the local beach or a wider area. Sometimes they distribute
Speaker 1: what the last one of the last failures the starships
Speaker 1: Super Heavy distributed what seemed to be either sand or
Speaker 1: some kind of concrete dust over a very wide area,
Speaker 1: and a lot of people that went to see the
Speaker 1: launch in South Padre, which is a pretty big distance away,
Speaker 1: went back to their cars to find this fine mist
Speaker 1: covering everything. Even though SpaceX is Brownsville's largest employer, a
Speaker 1: lot of people in town are just living their lives
Speaker 1: and not super tuned into what the company is doing,
Speaker 1: and so they may not know when a launch is coming,
Speaker 1: and it's a kind of regular surprise that happens in Brownsville.
Speaker 1: Hopefully the launch is a success, sometimes it's a failure
Speaker 1: in the community has to grapple with the consequences of it.
Speaker 2: The thing that runs through both of your writing about
Speaker 2: this is just the way that local people feel at
Speaker 2: once attracted and repelled by the spectacle that's around them,
Speaker 2: and proud of it and resentful at the same time. Chris,
Speaker 2: your story. I send this around to our producers before,
Speaker 2: but this moment your story.
Speaker 3: You talk about a.
Speaker 2: Woman who is grappling with Elon Musk and says her
Speaker 2: core complaint was that her native city didn't feel like
Speaker 2: it belonged to her anymore, and it felt as though
Speaker 2: public officials were changing the city to become a center
Speaker 2: from Space for space tourism. It was a kind of
Speaker 2: psychological burden. It's exhausting, she said. We're constantly being bombarded
Speaker 2: by Elon Musk and SpaceX news down here. There was
Speaker 2: the ever present threat that Elon might show up to
Speaker 2: Charro Days or sombrerofest, she said, referring to some of
Speaker 2: the local festivals. Most of all, she wished to stop
Speaker 2: having to think about him so much. Let me say,
Speaker 2: first of all, I can relate to this as a
Speaker 2: regular panelists on ELONNI.
Speaker 3: But also It's such a funny image. The fear of.
Speaker 2: Elon Musk coming to Sombrero Days or Charrofest or whatever.
Speaker 3: Is that real? That's how people feel in Brownsville.
Speaker 1: Yeah, I mean there's the sense that this powerful figure
Speaker 1: who is completely unaccountable. Nobody in Brownsville can really affect
Speaker 1: what he does. But what Elon does affects Brownsville quite
Speaker 1: a lot, and I'm sure you feel that quite strongly.
Speaker 1: I feel that as somebody who has to spend a
Speaker 1: lot of time on Twitter. I think Americans in a
Speaker 1: lot of places and of a lot of stripes feel
Speaker 1: that about Elon sometimes just he's everywhere in a way
Speaker 1: that can feel oppressive if you're not totally bought into
Speaker 1: the idea of Elon Musk. But Brownsville is a small
Speaker 1: and poor but very proud community and that had a
Speaker 1: strong sense of community before Elon got there. And I
Speaker 1: pieces about Brownsville and the reaction to Elon Musk often
Speaker 1: dwell on kind of the dissidents, And I do think
Speaker 1: you have to say that the majority of Brownsville are
Speaker 1: I'm generally supportive of the space ex's presence, or they
Speaker 1: kind of don't have a feeling about it.
Speaker 2: I Mean, the most memorable thing to me about Rachel
Speaker 2: your piece from several years ago, was that, like one
Speaker 2: of the big opponents is also going to every rocket launch.
Speaker 2: I mean, she is simultaneously extremely angry about getting thrown
Speaker 2: out of her home and also a huge like rocket
Speaker 2: fan girl.
Speaker 4: Basically, I found her so fascinating and tragic and relatable
Speaker 4: in that way where her life was about to get
Speaker 4: steamrolled by this this force, like Chris is talking about
Speaker 4: the force of just like what a billionaire wants. He
Speaker 4: was going to take her house. She didn't want to
Speaker 4: lose her house. She wanted to stay in her house.
Speaker 4: But at the same time, like being in proximity to
Speaker 4: that power was so compelling to her, and she would
Speaker 4: just she would post up on this hill and just
Speaker 4: watch the rocket. And now it's like a little bit different.
Speaker 4: Now there's they've built some enclosures so you can't just
Speaker 4: sit there and like stare at the guys hammering on.
Speaker 7: The hull of the rocket all day. But she would
Speaker 7: just sit there. She invested in all these cameras.
Speaker 4: She like got a bunch of Twitter followers and was
Speaker 4: just stalking this rocket.
Speaker 7: She loved the rocket.
Speaker 4: She was mad that she was getting kicked out of
Speaker 4: her house, and I was just like, this is We're
Speaker 4: all in this position of being enthralled to these people.
Speaker 7: Who are you going to step on us? Like we're ants,
Speaker 7: but we're like, wow, they're so big.
Speaker 1: Yeah. I talked to a woman named Jessica Tetrou who
Speaker 1: was a former city council member ran for mayor in
Speaker 1: Brownsville a few years ago, and she's totally bought into
Speaker 1: what Elon represents, the promise that he's offered this community,
Speaker 1: and I thought it was moving in a way. I mean,
Speaker 1: she talked about growing up in Brownsville at a time
Speaker 1: when it was in serious decline. Brownsville is a place
Speaker 1: that's generally forgotten by state government in Texas and by
Speaker 1: a lot of people in Texas. And suddenly Elon offered
Speaker 1: her and her kids the opportunity to be part of
Speaker 1: a project that they believed was saving the human race,
Speaker 1: saving civilization, bringing it to the stars. He made this
Speaker 1: small community the launchpad to this great civilizational project.
Speaker 3: It's almost religious.
Speaker 1: It is almost religious. I write about politics mostly, and
Speaker 1: so much of the people I meet have this searching
Speaker 1: for meaning, for something that makes them feel like their
Speaker 1: lives are part of a bigger narrative. And I think
Speaker 1: what Elon is brilliant at is roping people into his
Speaker 1: own narrative, offering them a chance to be part of it.
Speaker 3: So, in a.
Speaker 2: Weird way, these people in Brownsville, Boca Chica, they have
Speaker 2: access to Elon, an access to Elon that most of
Speaker 2: us do not. And I'm sort of wondering from both
Speaker 2: of you, like, what do they understand about him that
Speaker 2: we don't, and maybe maybe what do they have to
Speaker 2: teach us about billionaires and powerful people in general.
Speaker 4: I think that from the people that I spoke to,
Speaker 4: they were surprised at his willingness to sort of come
Speaker 4: right out and talk to them and spend time with
Speaker 4: them and win them over. And then at the same
Speaker 4: time that kind of ultimately came to nothing or that
Speaker 4: didn't actually end up helping them in the long run.
Speaker 7: He got what he wanted.
Speaker 4: There were some people who kind of aligned themselves with him,
Speaker 4: there were people who fought tooth and nail, and either
Speaker 4: way it didn't really matter. Everybody kind of ended up
Speaker 4: in the same place.
Speaker 1: I think to the extent that Elon Musk's incentives lined
Speaker 1: up with the city of Brownsville. He's been helpful to Brownsville,
Speaker 1: but he's also he's doing his own thing. He's not
Speaker 1: accountable to anyone, and he's not He doesn't show a
Speaker 1: lot of willingness to bend his own plans when they
Speaker 1: conflict with other peoples. I think there has been gratitude
Speaker 1: among people in Brownsville that he's given some money to
Speaker 1: local schools and local charities. In truth, he hasn't given
Speaker 1: all that much, and especially given his prodigious net worth.
Speaker 1: And I think I wonder to what extent the people
Speaker 1: who live in the area feel real to Elon, And
Speaker 1: I wonder, I guess, by extension, how whether any of
Speaker 1: the people around Elon feel real to Elon.
Speaker 2: That is a dark thought, but I think it is
Speaker 2: definitely one that I take away from some of this reporting.
Speaker 2: So my final question here for both of you. Elon
Speaker 2: has built facilities in Los Angeles. I think it's Hawthorne, California, Fremont,
Speaker 2: which is in the East Bay, Reno, Nevada, Austin. We
Speaker 2: talked about Buffalo, Berlin, Ish, Boca Chica, Shanghai. If you
Speaker 2: had to be Elon's neighbor next to one of his
Speaker 2: factories one of these places that I've just mentioned, which
Speaker 2: would you pick? Chris, You have just made a move,
Speaker 2: so I know you're you're thinking along these lines already.
Speaker 2: But I'm curious which Elon city would you most want
Speaker 2: to live in if it had to be.
Speaker 1: I mean, Hawthorne seems nice. I have to say, I
Speaker 1: don't think I would choose any of them. The changes
Speaker 1: that have taken place in Austin in the last few years,
Speaker 1: not exclusively because Elon moved there, but in part I
Speaker 1: think have were not entirely welcomed by me. But I'll
Speaker 1: opt for California. I mean, yeah, out one in one out.
Speaker 2: Which point out that it is very close to the beach,
Speaker 2: but it is also very close to lax So okay,
Speaker 2: it's not the most picturesque part of la although very
Speaker 2: convenient to the beach.
Speaker 3: Well that's great, Rachel.
Speaker 4: If you could promise me a house on Boca Chica,
Speaker 4: I could have the one remaining like seashell decorated house
Speaker 4: that SpaceX couldn't get via eminent domain. I would love
Speaker 4: to be the one wacky old lady remaining there, like
Speaker 4: surrounded by SpaceX engineers.
Speaker 2: You've got your rocket t shirt, walking your dog with
Speaker 2: Elon exactly.
Speaker 4: I'll be the holdout and waving at all all my
Speaker 4: engineer neighbors.
Speaker 3: Thank you both for being here. Thank you, Chris, great
Speaker 3: to be here. Thanks Rachel, thank you.
Speaker 2: This episode was produced by Stacy Wong, Naomi Shaven and
Speaker 2: Rayhan Harmancier senior editors.
Speaker 3: The idea for this very show also came from.
Speaker 2: Rayhon Blake Maple's Handles Engineering, and we get special editing
Speaker 2: assistants from Jeff Grocott, Antonio Muffarech and Aarafatchelas Sho. Our
Speaker 2: supervising producer is Magnus Hendrickson. The Elon Ink theme is
Speaker 2: written and performed by Taka Yasuzawa and Alex Sagiera. Brendan
Speaker 2: Francis Newnham is our executive producer, and Sage Bauman is
Speaker 2: the head.
Speaker 3: Of Bloomberg Podcasts. A big thanks to our supporter Joel Weber.
Speaker 3: I'm Max Chafkin.
Speaker 2: If you have a minute, rate and review our show,
Speaker 2: it'll help others find it and we will see you
Speaker 2: next week.