Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Well, Elon Musk is now the richest person on the planet.
Speaker 3: More than half the satellites in space are owned and
Speaker 3: controlled by one man.
Speaker 2: Starting his own artificial intelligence company. Well, he's a legitimate
Speaker 2: super genius, I mean legitimate.
Speaker 3: He says.
Speaker 2: He's always voted for Democrats, but this year it will
Speaker 2: be different.
Speaker 1: He'll vote Republican.
Speaker 4: There is a reason the US government is so reliant
Speaker 4: on him.
Speaker 1: Elon Musk is a scam artist and he's done nothing.
Speaker 4: Anything he does is fascinating the people.
Speaker 5: Welcome to Elon Ink, Bloomberg's weekly podcast about Elon Musk.
Speaker 5: It's Tuesday, November nineteenth. I'm your host, David Popadopolis. So
Speaker 5: it's somehow been just fourteen days since the election. But oh,
Speaker 5: how busy they've been for Elon Musk, who still seems
Speaker 5: to be basically living at mar A Lago, racking up
Speaker 5: invites from foreign leaders, watching his wealth sore, and weighing
Speaker 5: in loudly on Trump's cabinet appointees. All the while his
Speaker 5: social media company x steadily loses users to rival Blue Sky.
Speaker 5: And We're going to get right into all of this
Speaker 5: with our very own Musk cabinet, Ace reporter Dana Hall Hey.
Speaker 5: They're Dana Hey, Kurt Wagner, who covers social media for
Speaker 5: US here at Bloomberg, Hay, Kurt Hi, David Hey, and
Speaker 5: then Max Chafkin, who around here feels a little like
Speaker 5: Musk at the Mara A Lago ocean front pool.
Speaker 6: Elon Musk elan twa job. What a job he does.
Speaker 6: He's a great and he happens to be a really
Speaker 6: good guy. You know, he likes this place. I can't
Speaker 6: get him out of here.
Speaker 3: He just likes this place. And you know what, I
Speaker 3: like having him here too.
Speaker 6: He's good, He's done a fantastic job. Really an incredible
Speaker 6: mind and these unbelievable entrepreneurs sort of everything.
Speaker 3: I'm asking him, what do you do best? And we
Speaker 3: were not able.
Speaker 6: To figure it out. But it's a lot of things.
Speaker 3: Amax, David.
Speaker 2: I trust that my confirmation hearing will be food and uneventful.
Speaker 5: Yes, it shall all right. We're going to dive right
Speaker 5: into it. The Trump trade is working out spectacularly so
Speaker 5: far for Elon Musk. As you look at the numbers
Speaker 5: so far, his wealth is now up to three hundred
Speaker 5: and twenty six billion dollars according to the Bloomberg Terminal,
Speaker 5: which is about one hundred billion dollars more than his
Speaker 5: closest rival, who would be Jeff Bezos. Tesla stocks her
Speaker 5: up about a third since the election several hundred billion,
Speaker 5: and Xai and SpaceX are cutting deals at record high valuations. So,
Speaker 5: you know, Kurt Wagner, in the run up to the vote,
Speaker 5: on this show and in other places, there was a
Speaker 5: lot of handwringing and wondering about whether Musk was neglecting
Speaker 5: his companies and neglecting his shareholders during the campaign by
Speaker 5: spending so much time campaigning for Trump, and he was
Speaker 5: essentially undermining these companies. I guess those numbers, as it
Speaker 5: strikes me, at least those valuations put a rest to
Speaker 5: all of that. The money speaks for itself, does it not,
Speaker 5: mister Wagner to an extent.
Speaker 4: I think it does, right. I mean, this is a
Speaker 4: man who has built a reputation on making massive bets,
Speaker 4: and this is a massive bet that he made that
Speaker 4: is paying off handsomely. Right, he picked Donald Trump. He
Speaker 4: put the full weight of his wealth, the full weight
Speaker 4: of his time, his reputation behind him. Trump is now
Speaker 4: president Again, Elon is you know, the most powerful non
Speaker 4: elected person probably in the world, and he's reaping the
Speaker 4: benefits to come with that, right, and that includes the
Speaker 4: buoyancy of his his you know, companies, and the idea
Speaker 4: that because he's close to the president, because he has
Speaker 4: the president sort of in his ear, he's going to
Speaker 4: be able to, you know, get the type of regulation
Speaker 4: he wants. He's going to get the types of deals
Speaker 4: that he wants, he's going to get the relationships that
Speaker 4: he wants, and all of those things are beneficial to
Speaker 4: Elon Inc. And the world of Elon Muskin. We're seeing that,
Speaker 4: as you point out in the valuations.
Speaker 5: Yeah, and we're gonna we're going to get into the
Speaker 5: breakdown item by item of what is pushing up that valuation.
Speaker 3: Max.
Speaker 2: I mean, he's absolutely neglecting his companies. There's like no
Speaker 2: question that he has spent the last month or so
Speaker 2: doing nothing but hang around Donald Trump and go to
Speaker 2: campaign events and focus on this election.
Speaker 3: Now.
Speaker 2: I think the bet that the investors are making, as
Speaker 2: Kurt saying, is that he's gotten a lot for his companies.
Speaker 3: And and you.
Speaker 2: Know, you could make an argument right that maybe having
Speaker 2: a guy who kind of is impulsive. Who's a let's
Speaker 2: just put this generously, an unconventional manager has you know,
Speaker 2: pensions for outbursts of anger, erratic decision making. Maybe it's
Speaker 2: better for him to be, you know, kind of operating
Speaker 2: at a high level doing the kind of political diplomacy
Speaker 2: that could help a company of Tesla size or a
Speaker 2: company of space exercise. And like that's the bet that
Speaker 2: they're making. But I also think like we should not
Speaker 2: just assume that the market has any idea whether this
Speaker 2: is good or bad for Tesla. Yet this is a
Speaker 2: bet that investors are making, you know, amid a moment
Speaker 2: of a lot of exuberance. And you know, we'll see
Speaker 2: Tesla stock, as we talk about all the time, it
Speaker 2: swings a lot on this podcast.
Speaker 5: So Dannik Kurt I wonder on that point, are there
Speaker 5: any signs inside Musk's companies that all the time he
Speaker 5: is spending in Pennsylvania now in mar A Lago, that
Speaker 5: top executives at that at those companies are now empowered
Speaker 5: to do more make the decisions on their own. Is
Speaker 5: there any implicit or explicit message, yes, go ahead and
Speaker 5: do that, or is it too soon for that?
Speaker 1: I mean, listen, Musk has always run so many companies
Speaker 1: that his executives have always been kind of empowered to
Speaker 1: do stuff without him. Like at SpaceX, Gwen Shotwell clearly
Speaker 1: runs the day to day. At Tesla, there aren't really
Speaker 1: that many named executive officers, and like in the past,
Speaker 1: you know, people would always complain that there were bottlenecks
Speaker 1: because they were waiting for Elon to sign off on stuff.
Speaker 1: But like Tesla's a profitable company. It kind of runs.
Speaker 1: It's like they make cars, they sell cars, Like, you know,
Speaker 1: he's more focused on robotics in AI, like the basic
Speaker 1: you know work of like running a factory, like he's
Speaker 1: no longer sleeping on the floor or whatever. So I
Speaker 1: just think that we as a news or operation need
Speaker 1: to kind of stop looking for like these points of
Speaker 1: like everyone wants the narrative that like just falling apart
Speaker 1: because Elon is doing politics and frankly, it's not like
Speaker 1: like now you have the whole like Trump administration on X,
Speaker 1: like X is doing fine. Like I don't know, I
Speaker 1: just I just sort of feel like there's a desire
Speaker 1: to find these points of tension and friction that might
Speaker 1: be premature because.
Speaker 5: Well, well, a a were journalists, and journalists by definition,
Speaker 5: that's what we do. We look for points of friction
Speaker 5: and tension. But I guess that answer implicit answer is
Speaker 5: that the CEO role doesn't matter, Then why the hell
Speaker 5: do I need a CEO?
Speaker 4: I think it matters different at different companies, right, So, like, yeah,
Speaker 4: when you're the CEO of six different businesses that are
Speaker 4: all you know, at various stages, but for the most part,
Speaker 4: relatively established, Yeah, maybe you don't necessarily need a traditional
Speaker 4: hands on CEO, right, But that's going to be very
Speaker 4: different when you have a startup or something like that.
Speaker 4: I guess I would say I would maybe echo with
Speaker 4: Dana saying, and just add I think it's too early, right, Like,
Speaker 4: this is already someone who was who was spread incredibly
Speaker 4: thin well before Trump showed up into the picture. For him,
Speaker 4: it's never He's never been someone who's like, you know, hey,
Speaker 4: I'm going to be at the office from nine to five,
Speaker 4: you know, pop eye for office hours or whatever. Like
Speaker 4: that's just not how he operates anyways. And so adding
Speaker 4: this other you know, I don't even want to call
Speaker 4: it a hobby obviously, because is much better than that.
Speaker 4: But adding this other commitment to his plate is obviously
Speaker 4: it's a big deal, but at the same time, his
Speaker 4: companies are used to only getting fractions of his time,
Speaker 4: and so I think it's too soon to say whether
Speaker 4: this is going to have a long term impact.
Speaker 1: You know, there's a lot of irrational exuberance right now.
Speaker 1: I would like to point out that SpaceX is going
Speaker 1: to launch a starship Brocket this evening, and President Trump
Speaker 1: is going to go to that launch, as is the
Speaker 1: new FCC nominated chair, Brendan Carr. So you might even
Speaker 1: see like the entire Trump cabinet or like everyone from
Speaker 1: mar A Lago like at this launch. So I think
Speaker 1: that for Elon that is really good, and he's neglecting
Speaker 1: his companies, perhaps on the day to day, but just
Speaker 1: the sort of fact that this whole Republican entourage is
Speaker 1: now hanging out with Elon, flying around with Elon, going
Speaker 1: to the UFC fight with Elon, like he is best
Speaker 1: in the glow of that adulation, which he never got
Speaker 1: from the Biden administration, as we have talked about many times.
Speaker 1: And so for a guy who really likes the dopamine
Speaker 1: hit of adulation and feeling like he's in power, and
Speaker 1: feeling appreciated. To have the President elect come to his
Speaker 1: launch is like a huge thing for him.
Speaker 5: Let me just say this that all those things Max
Speaker 5: you said are correct. We shall see ultimately where Tesla
Speaker 5: and these other companies from an operating basis go from
Speaker 5: here in the coming months and years, and whether him
Speaker 5: Elon Musk spending so little time of late with them
Speaker 5: ultimately hurts them or not. But if I'm a shareholder
Speaker 5: in the company he's just added in Tesla, for instance,
Speaker 5: he's just added several hundred billions of dollars to the
Speaker 5: value of the company, I am thrilled. And if I
Speaker 5: have those long term concerns, you know what I do.
Speaker 5: I just sell the stock at an incredible profit right now.
Speaker 3: Absolutely.
Speaker 2: And one thing I'll say that I think where what
Speaker 2: the market is telling us is that there were a
Speaker 2: lot of reports even before the election, but then then
Speaker 2: definitely after kind of skeptical about hey, how long can
Speaker 2: this Trump Musk romance last? You know, these you know,
Speaker 2: they are so high on each other's presence, and I
Speaker 2: think what we're seeing to Dana's point, is it's lasting
Speaker 2: so far. Right Musk is in the inner circle. He
Speaker 2: has not been pushed out. If anything, he has gotten
Speaker 2: closer to Trump over the last fourteen days than he
Speaker 2: was after the election.
Speaker 3: And that is true. It is holding for now.
Speaker 5: And we're going to get into that a little bit
Speaker 5: later on, because there are some signs here and there,
Speaker 5: some fraying. But I first do want to go through
Speaker 5: item by item if one is to make sense of
Speaker 5: this enormous spike in the valuations of his companies in
Speaker 5: terms of what a Trump administration can can bring about
Speaker 5: for Elon Inc. Let's do that now. So, Dana, the
Speaker 5: first thing that comes to mind and I need to
Speaker 5: ask you about, is the possibility, as has been floated
Speaker 5: in recent days, that the Trump adminished station brings about
Speaker 5: some sweeping new rules to autonomous vehicles, helping pave the
Speaker 5: way for Elon to roll out what are.
Speaker 3: We calling it, robo cyber cab. Tell us a bit
Speaker 3: about that.
Speaker 1: So, as you all recall back in you know, April,
Speaker 1: Elon Musk basically fired twenty percent of Tesla's staff and
Speaker 1: completely pivoted the company. They're no longer chasing volume of
Speaker 1: electric cars. The future is all about autonomy and AI
Speaker 1: and the robotaxi and on an earnings call, Musk said
Speaker 1: very clearly, like if President Trump is elected, like I'm
Speaker 1: really hoping for a kind of a streamlined federal process
Speaker 1: when it comes to autonomous vehicles instead of this patchwork
Speaker 1: regulatory quilts where like one city has one rule and
Speaker 1: another state has another rule. And that is very clearly
Speaker 1: one of his asks. And you know, I think that
Speaker 1: just basically a streamlined, very fast track kind of regulatory
Speaker 1: regime is really what Elon wants, and now he's probably
Speaker 1: gonna get it.
Speaker 3: There was a report to that effect that correct me
Speaker 3: if I'm wrong.
Speaker 1: Yeah, our colleague David Welsh broke the story over the
Speaker 1: weekend that the Trump transition team was like floating possibly
Speaker 1: Emil Michael, who used to work at Uber as like
Speaker 1: a potential Dot secretary. Now we know that he is
Speaker 1: not the cabinet elect, but I mean, we don't know
Speaker 1: yet who's going to end up running NITZ for example.
Speaker 3: Just a couple of things.
Speaker 2: Yeah, Trump did not pick the guy that Elon seemed
Speaker 2: to want, Emil Michael, who would have been who's basically
Speaker 2: you know, an ex uber executive, former Silicon Valley guy.
Speaker 2: Seems like of all the people who could possibly just
Speaker 2: kind of ram this through, he'd be the most likely
Speaker 2: to do it. I have to say, the guy that
Speaker 2: Trump did pick doesn't have any track record of or
Speaker 2: as far as I could find in a quick search
Speaker 2: since the pick was announced, of talking about autonous vehicles.
Speaker 2: And I would be skeptical that the Trump administration is
Speaker 2: going to spend, you know, a ton of political capital
Speaker 2: on this and and the other thing.
Speaker 3: Would it take a ton of political capital.
Speaker 2: So the Bloomberg story we published is really good. It
Speaker 2: explains that they would there are some rules that they
Speaker 2: could change, but they would need an Act of Congress
Speaker 2: to to really you know, to really like make the
Speaker 2: cyber cab happen on any kind of big scale. And
Speaker 2: I think that the problem here, which was the problem
Speaker 2: before Trump was elected, is that you can have the
Speaker 2: best regulatory framework, the biggest, most beautiful, most glorious could
Speaker 2: be like the toilet seat of mar A Lago equivalent
Speaker 2: of regulatory frameworks, and you need a cyber cab, like
Speaker 2: you need a working car to like make use of
Speaker 2: these regulations. And again it's not totally clear that that
Speaker 2: has happened. So again this all feels like very hypothetical.
Speaker 2: We've got like, maybe there's going to be some kind
Speaker 2: of thing that's that's going to happen to make Elon
Speaker 2: Musk happy on the regulatory side. But then Tesla would
Speaker 2: have to turn around and take advantage of it somehow.
Speaker 1: Right, it could actually backfire because you could no longer
Speaker 1: blame regulatory approval for the delay. Like if they got
Speaker 1: this fast track regulatory aprival, they'd have to like they'd
Speaker 1: have to actually like start an operation.
Speaker 3: Dan.
Speaker 5: Next up the sun setting of EV tax rebates for
Speaker 5: car buyers.
Speaker 1: Yeah, so the seventy five hundred dollars federal tax credit
Speaker 1: for buying an electric vehicle has been a huge part
Speaker 1: of the Inflation Reduction Act and really kind of encouraged
Speaker 1: a lot of consumers who maybe weren't thinking about an
Speaker 1: EV to buy a car. And the Trump administration has
Speaker 1: floated about sunsetting that. Elon says that he's okay with that,
Speaker 1: and I think that he's right in that Tesla, by
Speaker 1: virtue of their volume and can do a lot with
Speaker 1: pricing and they don't need the credits as much as
Speaker 1: their rivals do because Tesla is already profitable. Now, would
Speaker 1: losing the credit hurt their gross margin? Absolutely? But it's
Speaker 1: really going to hurt rivals, and so you know, Elon
Speaker 1: might be willing to kind of go ahead with this
Speaker 1: because it would just allow Tesla's moat to get so
Speaker 1: much better. I mean, you have like GM and Forward.
Speaker 1: They poured so much money into trying to forecast the
Speaker 1: EV market going forward, and they keep having to rewrite
Speaker 1: their playbook and like scale back their ambitions, and it's
Speaker 1: so frustrating for them because like with every administration things,
Speaker 1: Wax and Wayne, whereas like Tesla is the dominant player
Speaker 1: in the US, They're going to basically be able to
Speaker 1: sort of you know, continue that moat and they still
Speaker 1: get a lot of funding from the IRA for manufacturing,
Speaker 1: for installing superchargers. I mean, I could see, you know,
Speaker 1: Tesla just basically like the credit goes away, Tesla just
Speaker 1: slashes prices, which we've seen Elon do in the past,
Speaker 1: and like, I don't think that the credit is that
Speaker 1: big of a deal, to be honest, I think that
Speaker 1: Elon would be happy to see it go away.
Speaker 4: I guess I would point out that this is not
Speaker 4: the only sort of industry or major tech company that
Speaker 4: is almost pushing for more regulation or in this case,
Speaker 4: you know, fewer benefits in order to benefit them. It's
Speaker 4: sort of it's counterintuitive, right, So I would point out
Speaker 4: that Meta, which owns Facebook, Instagram for years, has been saying, hey,
Speaker 4: regulate us, regulate the tech, regulate the social networking industry.
Speaker 4: And on the surface, you think, why would they ever
Speaker 4: want more regulation?
Speaker 3: Right, this would hurt them?
Speaker 4: Well, it's because, as we pointed out, same with Tesla,
Speaker 4: they're in such a dominant position that any regulation they
Speaker 4: can deal with. They have the resources, they have the talent,
Speaker 4: they have the time to deal with it easily. But
Speaker 4: it will close the door for a number of competitors.
Speaker 4: That will make it harder for competitors to catch.
Speaker 3: Up to them.
Speaker 4: Right, It's still a growing in somewhat new industry, the evs,
Speaker 4: but like it's much more mature than when Elon started
Speaker 4: this out right, So like there is a dominant player
Speaker 4: which didn't exist when he was first going. And so
Speaker 4: I think that's why this counter into a intuitive idea
Speaker 4: actually makes a lot of sense for him.
Speaker 3: Max.
Speaker 5: Another thing that is helping Musk's empire is the idea
Speaker 5: it's been floated or I guess Trump has said he
Speaker 5: would like Brendan Carr to chair the FCC.
Speaker 3: Why is this positive for elinning.
Speaker 2: Brend And Carr is a long time Elon Musk fan,
Speaker 2: and in particular he's expressed appreciation for Elon Musk in
Speaker 2: all sorts of respects. But the FCC is an important
Speaker 2: regulator for Starlink, which is a subsidiary of SpaceX. And
Speaker 2: you know, one of Elon Musk's big frustrations with the
Speaker 2: Biden administration is that there is a lot of money
Speaker 2: for rural broadband internet and that money has not gone
Speaker 2: to him. There are a couple of programs and car
Speaker 2: has been very outspoken about the need.
Speaker 3: To change that.
Speaker 2: And I actually think this is the way, like much
Speaker 2: more than autonomous vehicles or some of these other things
Speaker 2: that rely on a lot of hypothetical car.
Speaker 3: This is a way.
Speaker 2: Yeah, this is like a way that Elon Musk can
Speaker 2: put money directly towards his top line, you know, revenue
Speaker 2: from the government to Starlink. And part of the reason
Speaker 2: it's more plausible is because Elon Musk has like a
Speaker 2: real plausible case for it.
Speaker 5: Yeah, That's what I was going to ask you. Is
Speaker 5: there a good inmate case that starlink deserves that money?
Speaker 5: Just as much as these other companies do.
Speaker 2: It's complicated. I've done I've done a little bit of
Speaker 2: reporting on this, and there are there's some analysts out
Speaker 2: there who have been looking at this and talking about
Speaker 2: it as a possibility. Elon Musk's argument is essentially, the
Speaker 2: satellites are going to get better, and no one really
Speaker 2: knows how true that is or to what extent they're
Speaker 2: going to get better. Are they going to get better enough?
Speaker 2: And like that's kind of where the rubber meets the road.
Speaker 2: But there is a case for satellites, like you could
Speaker 2: roll these like give people starlinks. Is a lot cheaper
Speaker 2: than laying out fiber. The question is like when you
Speaker 2: try to do it on a mass scale, how does
Speaker 2: that work? And I think the from a from a
Speaker 2: sort of Elon point of view, he gets two things
Speaker 2: out of this. One is potentially more revenue, but the
Speaker 2: second is it slows down these traditional telecom operators that
Speaker 2: we're counting on government subsidies for their own you know,
Speaker 2: rollout of rural broadbands. So this is like a definite
Speaker 2: win for Elon. I think it's I think Brendan Carr
Speaker 2: is like the biggest win he's had so far, even
Speaker 2: bigger than getting named as the co chair of DOGE,
Speaker 2: and certainly better than these kind of you know, sort
Speaker 2: of vague reports that the Trump administration is is you know,
Speaker 2: sympathetic to autonomous vehicles, because because again we don't really know,
Speaker 2: it's just a little hard to figure out how that
Speaker 2: would benefit Elon, at least in the short term.
Speaker 1: The other thing I wanted to jump in on is
Speaker 1: that Carr has advocated a ban on TikTok, citing national
Speaker 1: security concerns because of China, and that could also benefit
Speaker 1: Elon because you know, as X adds more video capacity,
Speaker 1: they're really rivals with TikTok. So I think when we
Speaker 1: look at all of these cabinet appointments, it's really important
Speaker 1: to sort of think about how they benefit Musk not
Speaker 1: just in one company, but sort of across all companies.
Speaker 1: And Brendan Carr is going to go to the Space
Speaker 1: Excellence today.
Speaker 4: Also, it should be noted I guess that Elon has
Speaker 4: claimed he doesn't want a TikTok ban, right, He's sort
Speaker 4: of like, hey, this is against free speech, this would
Speaker 4: be a bad thing. But as Dana very smartly points out,
Speaker 4: like he's saying that in reality, I think TikTok not
Speaker 4: being in picture would ultimately benefit X. So he might
Speaker 4: say he doesn't want it, but when push comes to shove,
Speaker 4: I'm sure he'd happily you accept a lot more attention
Speaker 4: coming towards X.
Speaker 5: Yeah, more on X in a moment, Max, thank you
Speaker 5: very much for bringing up DOZE, the Department of Government Efficiency.
Speaker 5: We are absolutely, dear listeners, gonna be talking more about
Speaker 5: DOZE in coming weeks and months. But I want to
Speaker 5: Dana before we move on to X, ask you this.
Speaker 5: Max earlier had said that so far the Trump Musk
Speaker 5: relationship seems to be holding up just fine, and that
Speaker 5: indeed seems to be the case. But at the same time,
Speaker 5: there are signs of fracture or at least tension emerging,
Speaker 5: reports of insiders in the Trump team bristling at how
Speaker 5: Musk is acting quote as a co president to Trump.
Speaker 5: And I wonder if you feel like these are just
Speaker 5: initial bumps in the road and the cost of doing
Speaker 5: business with Trump, or a sign that things might come
Speaker 5: to a head sooner rather than later.
Speaker 1: I think it's kind of bs to be honest. I mean,
Speaker 1: the Trump team is famously leaky, right and right now,
Speaker 1: You've got all these people in mar A Lago like
Speaker 1: jockeying for position and jockeying for power, and like you know,
Speaker 1: there's this whole like fight about who's going to be
Speaker 1: the Treasury secretary in different camps or leaking things to
Speaker 1: different things, and yeah, like oh, there was like a
Speaker 1: dust up at a dinner with like boris what's his
Speaker 1: name or like whatever, like Trump is going to the
Speaker 1: SpaceX launch today, Like that is what matters. Like I
Speaker 1: used to cover politics, and I just don't take these
Speaker 1: kind of like thinly sourced reports in certain outlets that
Speaker 1: seriously like Elon and Trump, I've been thickest thieves for
Speaker 1: the past like six weeks, and until there's like a
Speaker 1: real rupture, I just don't really buy it. I'm sure
Speaker 1: that some like old school Trump loyalists are maybe bristling
Speaker 1: at the fact that Elon is around, but like you're
Speaker 1: seeing photographs of like Trump and Don Junior and the
Speaker 1: Speaker of the House and RFK and Elon like all
Speaker 1: on the plane Enan McDonald's together, there's no rupture. I've
Speaker 1: always just been very skeptical of a lot of political
Speaker 1: reput because that.
Speaker 3: Is fair, but Max.
Speaker 5: Trump has on a couple of occasions, including the clip
Speaker 5: we played at the beginning of the show, he has
Speaker 5: publicly started taking swipes at Eline.
Speaker 2: Yeah, I gotta agree with everything down said she.
Speaker 3: I'm sorry, David.
Speaker 2: I know, I know that's not what you want to hear.
Speaker 2: But but here's the thing. Help, there are other there
Speaker 2: are other constituencies within this transition who obviously have an
Speaker 2: interest in marginalizing Elon, and and so and and there
Speaker 2: there are other sources of power here. And and if
Speaker 2: you just look at like the top line, like who's
Speaker 2: at the McDonald's table, Like, I think that's a pretty
Speaker 2: good indication. And what I will say is yes, in
Speaker 2: the past and and we we get into this in
Speaker 2: the episode that's Forthcoming of Citizen Elon. There have been
Speaker 2: signs like this before where Trump is sort of preparing
Speaker 2: to like shift someone and he will start making these
Speaker 2: kind of cracks, right, and it's it's like a way
Speaker 2: to kind of open the door. And maybe that's possible.
Speaker 2: It could also be that it's a warning to Elon.
Speaker 2: It's like, listen, you need to work with me, you know,
Speaker 2: don't get too big for your breeches. It could also
Speaker 2: be a signal to some other part of Trump's coalition
Speaker 2: who he's trying to play Kate. We just like don't
Speaker 2: know what is going on. And I really think there
Speaker 2: are a lot of people who are like taking lessons
Speaker 2: from the past Trump administration, which makes sense. But I
Speaker 2: also think we need to look at Elon. And this
Speaker 2: is not as much about to me anyway, This is
Speaker 2: not as much about can Trump live in a world
Speaker 2: where there's Elon Musk in his inner circle? It's can
Speaker 2: Elon Musk be sufficiently subservient? And I think before this,
Speaker 2: like last few months of political adventure with Elon, I
Speaker 2: guess I would say no freaking way. But over the
Speaker 2: last three months, Elon has proven himself willing to let
Speaker 2: Trump lead. And until we see a difference, then you know,
Speaker 2: I'm gonna assume that's going to continue.
Speaker 3: Okay, very good, Kurt.
Speaker 5: Let us talk about the Exodu users leaving X. Things
Speaker 5: are going swimmingly, as we just stated, or at least
Speaker 5: for the market values of many of his companies in
Speaker 5: his empire, not so much right now. For X users
Speaker 5: are leaving. Tell us what's going on.
Speaker 3: It's this weird.
Speaker 4: Sort of like Jekyl and hyde situation at X right now,
Speaker 4: which is it is more politically and culturally important than
Speaker 4: it has been since Elon bought the company, right like,
Speaker 4: this is the most relevance X has had as a
Speaker 4: social network and as a sort of distributor of Donald
Speaker 4: Trump's agenda, news and information. At the same time, it
Speaker 4: is probably maybe the weakest it has been from a
Speaker 4: user standpoint, right because after the election, we saw all
Speaker 4: of these people basically throwing in the towel on X
Speaker 4: and saying I'm done with this place. And we've seen
Speaker 4: that reflected in the numbers of two rivals, Meta's Threads
Speaker 4: and Blue Sky, And with Blue Sky in particular, it's
Speaker 4: been really interesting because Blue Sky's been around for a
Speaker 4: couple of years. It had a lot of attention when
Speaker 4: it first launched, and then it sort of went quiet
Speaker 4: for a while. I think a lot of people were
Speaker 4: just like, that's not it, that's not the place. We'll
Speaker 4: just kind of let it sit over there. And it's
Speaker 4: added I think it was at ten million users in September.
Speaker 4: The week after the election, it added about one point
Speaker 4: five million, and in the week since then, so you know,
Speaker 4: week two after the election, I believe it's added about
Speaker 4: five million users, and so it's now close to nineteen million,
Speaker 4: up from ten million in September. As I mentioned, it's
Speaker 4: almost doubled in size in just a couple of months.
Speaker 4: And if you go to Blue Sky, I think the
Speaker 4: most telling thing is that your feed is going to
Speaker 4: be full of people basically saying, hey, I'm new here,
Speaker 4: just came over from X, you know, leaving that place behind.
Speaker 4: Tell me who to follow, tell me what to do,
Speaker 4: like how do I use this thing? Like ha ha ha, Right,
Speaker 4: But the idea being that all of these people are
Speaker 4: migrating to a new network because they no longer want
Speaker 4: to be associated with X. And so I think that
Speaker 4: that is anecdotal, of course, but I think that, paired
Speaker 4: with the rising user numbers, that these two competitors sort
Speaker 4: of tells a picture that you know, X is having
Speaker 4: a bit of a user user growth or user retention
Speaker 4: issue at the moment.
Speaker 1: A Blue Sky has a lot of like high usage
Speaker 1: people like Lizzo is now on Blue Sky, and epidemiologists
Speaker 1: and climate scientists like all of my energy peeps have
Speaker 1: moved to Blue Sky. And I think the other big
Speaker 1: thing driving this is that X changed its term of service.
Speaker 1: So as of November fifteenth, if you're using X, you're
Speaker 1: basically allowing them to use your content to feed into
Speaker 1: XAI and like language models. And so the change of
Speaker 1: the terms of service is actually what kind of inspired
Speaker 1: a lot of people to start not just like leaving X,
Speaker 1: but like downloading their tweets and then like deleting them.
Speaker 1: So that's like another interesting part of this is just
Speaker 1: like people realizing that they don't want elon having their content,
Speaker 1: And I mean, Max and I go back and forth
Speaker 1: about this a lot. I struggle with my presence on
Speaker 1: X because on the one hand, I feel like I
Speaker 1: need to be there because that's now where the incoming
Speaker 1: Trump administration is, like all the cabinet people like, that's
Speaker 1: where like a lot of people who are now going
Speaker 1: to be in power are posting. So I feel like
Speaker 1: I have to at least lurk. But I have also
Speaker 1: joined blue Sky. I hope you will find me there.
Speaker 3: Okay, I shall.
Speaker 1: We need an el in ink, We need an el
Speaker 1: on ink starter pack.
Speaker 3: There we go.
Speaker 5: Some X is Blue Sky's gain, X's loss or are
Speaker 5: there signs that indeed they are? For every one liberal
Speaker 5: user that walks out the door. They are being replaced
Speaker 5: by conservatives, conservative users. And even if that's not the case,
Speaker 5: does it exactly matter for X. You've drilled into my
Speaker 5: head in recent weeks that we need to rethink our
Speaker 5: understanding of X and its role and the Musk Empire.
Speaker 2: Yeah, I mean both things can be true. Like Chrit said,
Speaker 2: like he's right, X has never been more relevant, at
Speaker 2: least not in the last five years than it is today.
Speaker 2: And we don't know what the value of X is think,
Speaker 2: Like we talked about this on the last episode, like
Speaker 2: the models of Elon's net worth rely on fidelities mark down.
Speaker 2: If I were a shareholder of X, I would be
Speaker 2: marking that way the hell up because clearly, you know,
Speaker 2: association with Elon amid a Trump administration, whether or not
Speaker 2: it translates to actual you know, business, is valuable according
Speaker 2: to the market. After the election, we saw all of
Speaker 2: these CEOs, guys who had kind of been on the fence,
Speaker 2: you know, go and sort of kiss the ring to Trump,
Speaker 2: and they all did it on X, right. They all
Speaker 2: Satyad Della Sun Dhar Pachai, Jeff Bezos, like all the
Speaker 2: all the sort of tech guys who wanted to kiss
Speaker 2: up to Donald Trump, went on X. They called him
Speaker 2: President Trump even though he's president elect, and they and
Speaker 2: of course they did it on Elon Musk's platform, and
Speaker 2: so clearly it's it's like the Trump Hotel of social networks. Like,
Speaker 2: if you want to if you want to be in
Speaker 2: this orbit, you got to be there. And I think
Speaker 2: and even even saying that probably understates it, because like
Speaker 2: it is a really important piece of the right wing
Speaker 2: media ecosystem right now, maybe the most important piece. But
Speaker 2: what I'll say is, and like right wing media has
Speaker 2: always relied on this relationship with quote unquote mainstream media,
Speaker 2: and what X had going for it before the election
Speaker 2: was you still had a lot of mainstream journalists there,
Speaker 2: You had a lot of mainstream news organizations. Despite the
Speaker 2: fact that Elon Musk, the owner and now key advisor
Speaker 2: to the to the president elect, is going out there
Speaker 2: every day saying really bad things about media, saying that
Speaker 2: they're they're the opposition, they're terrible, and you know, cut
Speaker 2: doing making tweaks algorithmically into the business that are harming
Speaker 2: those companies' business. It's really only a matter of time
Speaker 2: before mainstream media outlets try to find a different outlet,
Speaker 2: and I think what we're seeing now is is some
Speaker 2: of that happening some of these You have a lot
Speaker 2: of journalists, a lot of media outlets suddenly like paying
Speaker 2: attention to Blue Sky. And if that happens in a
Speaker 2: big way and X doesn't respond, that I think will
Speaker 2: hurt X in the LNE long run. Because conservative media,
Speaker 2: as much as it is its own ecosystem, as much
Speaker 2: as it is, there is a big audience there. Part
Speaker 2: of what makes the most successful conservative media plays work
Speaker 2: is that they're able to kind of straddle both sides
Speaker 2: of it, but both the like hardcore activists as well
Speaker 2: as kind of the middle the kind of mainstream audience.
Speaker 3: Could I just add real quickly.
Speaker 4: I mean, there's this idea that like, oh, is X
Speaker 4: going to be relevant if it's just right leaning sort
Speaker 4: of Trump fans without you know, liberal folks to poke
Speaker 4: and prod or whatever. Right Like We've heard that for
Speaker 4: kind of years. I would point you to truth social, right, Like,
Speaker 4: what is truth social? It is right leaning Trump supporters
Speaker 4: without anybody to really poke and prod. And I would
Speaker 4: argue truth social other than basically being a glorified way
Speaker 4: for Trump to release press releases has almost no relevance
Speaker 4: in general kind of modern Internet culture, right like it
Speaker 4: is truly just like Trump Press release two point zero service.
Speaker 4: And so I do think for X to stay relevant,
Speaker 4: they need they they sort of need, you know, people
Speaker 4: from from both sides of this political spectrum to care
Speaker 4: about what's happening on this service, because otherwise it does
Speaker 4: become very kind of echo chamber isolated. And I'm just
Speaker 4: not sure that it's going to jump off the Internet
Speaker 4: onto television and radio and podcasts in the way that
Speaker 4: it has historically if it becomes very very one sided.
Speaker 1: Max.
Speaker 5: So, one thing I've learned over decades covering finance is
Speaker 5: that marks, when you're marking the value of a private asset,
Speaker 5: not a publicly traded asset, private marks are a dark art. Okay,
Speaker 5: they are a dark art. And so if you know
Speaker 5: what if you have, if you happen to have a
Speaker 5: little cut of that, you know, stock and X, and
Speaker 5: you want to mark it up, go ahead, man mark
Speaker 5: that thing up.
Speaker 2: I do think, like combo of Trump being president and
Speaker 2: the meme the stock market where it is, it's not
Speaker 2: out of the realm of possibility that X could return
Speaker 2: to the public markets one day and even return at
Speaker 2: evaluation that might be at least much higher than it's
Speaker 2: current super depressed in.
Speaker 3: The abstract, That does seem plausible.
Speaker 5: But Kurt, are there any signs of any kind that
Speaker 5: there's any buzz among the banker investing community that man,
Speaker 5: let me get my hands on some of them X shares.
Speaker 3: So I agree with Max.
Speaker 4: I think when Fidelity comes out with its next report,
Speaker 4: which will probably get to go up three weeks from
Speaker 4: now or whatever, we can talk about when it does,
Speaker 4: I wouldn't be I would be shocked if the value
Speaker 4: is an up right, if it isn't up noticeably, only because,
Speaker 4: as Max pointed out, being associated with Elon and therefore
Speaker 4: being associated with Trump tends to signal we think, you know,
Speaker 4: we're a buyer of this type of thing. At the
Speaker 4: same time, if I'm Elon and X, the last thing
Speaker 4: I think I want to do is go public right
Speaker 4: now and expose for the businesses. Yeah, but I think
Speaker 4: you know, this is not a strong business. I continue
Speaker 4: to firmly believe that this is not a good business,
Speaker 4: right like it is a good cultural weapon in some
Speaker 4: in some ways for Elon and Trump. But you know,
Speaker 4: there was a report, David.
Speaker 3: You may have seen.
Speaker 4: Last week that all of these big blue chip advertisers
Speaker 4: had returned. I wrote some of them down. It was
Speaker 4: like IBM, Disney, Comcast, Warner Brothers, and it was like, oh,
Speaker 4: they're no longer paused. They're spending on X again, Like
Speaker 4: this is huge. And then you look into the report,
Speaker 4: all of those companies combined spent three point three million
Speaker 4: dollars on advertising over nine months. It was down ninety
Speaker 4: eight percent from twenty twenty three. So my point being
Speaker 4: is that even though they're trying to create.
Speaker 3: Like wait a minute, well what about the cheach and
Speaker 3: chong gummies? What about then? Tell me about the cheaching
Speaker 3: chong gum, you are single handedly keeping those guys afloat. David.
Speaker 3: We've talked about this. You need to stop those place chechicheng.
Speaker 4: I feel like I'll get off my soapbox here, but
Speaker 4: I just feel like the idea that this is a
Speaker 4: strong business is yet to be Maybe I will be wrong,
Speaker 4: and we've all been proven wrong by Elon at one
Speaker 4: point or another, and this will be my big hill
Speaker 4: that I die on.
Speaker 3: But I don't believe right.
Speaker 4: Now that this is a very strong business and it's
Speaker 4: not something you would want to say, Hey, let's open
Speaker 4: up our books, let's go public, let's let investors get
Speaker 4: a look at how this is actually going, because I
Speaker 4: don't think it would go down with that.
Speaker 5: I think then indeed the company has much greater value
Speaker 5: for Elon and his empire as a private, small, private
Speaker 5: entity within it that does access it to media.
Speaker 3: Arm I am.
Speaker 5: Being told by our producer Magnus that we are skipping.
Speaker 3: The feud or skipping the feud we don't have time
Speaker 3: for it.
Speaker 4: Sounds like there is a feud you and the producers.
Speaker 5: We have to let every once in a while we
Speaker 5: have to listen to Magnus, Kurt, Dana, Max, thank you
Speaker 5: very much for joining.
Speaker 4: Great to be here, Thanks for having us.
Speaker 1: Always a pleasure.
Speaker 3: This episode was produced by Stacy Wong.
Speaker 5: Anna Masarrakas is our editor and Rayhan Harmancier, senior editor.
Speaker 5: The idea for this every show also came from Rayhon
Speaker 5: Blake Maple's Handles Engineering and Emma Sanchez fact checks. Our
Speaker 5: supervising producer is Magnus Henrickson.
Speaker 3: The Elon Inc.
Speaker 5: Theme is written and performed by Taka Yasuzawa and Alex Sugijira,
Speaker 5: Brendan Francis Newnham is our executive producer, and Sage Bauman
Speaker 5: is ahead of Bloomberg Podcasts. A big thanks as always
Speaker 5: to our supporters Joe Weber and Brad Stone.
Speaker 3: I'm David Papadopoulos.
Speaker 5: If you have a minute, rate and review our show,
Speaker 5: it'll help other listeners find us. See you next week.
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