1 00:00:02,480 --> 00:00:07,000 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:07,920 --> 00:00:09,520 Speaker 2: Let me tell you we have a new star. 3 00:00:10,520 --> 00:00:14,960 Speaker 1: A star is born Elan On Mars Juthan Kennemy. He 4 00:00:15,120 --> 00:00:18,520 Speaker 1: is the Thomas Edison plus plus plus of our age. 5 00:00:18,640 --> 00:00:21,040 Speaker 3: Probably his whole life is from a position of insecurity. 6 00:00:21,079 --> 00:00:21,800 Speaker 3: I feel for the guy. 7 00:00:22,040 --> 00:00:25,319 Speaker 2: I would say ninety eight percent really appreciate what he does. 8 00:00:25,400 --> 00:00:28,400 Speaker 2: But those two percent that are nasty, they are our 9 00:00:28,560 --> 00:00:31,480 Speaker 2: pay in four fols, we were meant for great things 10 00:00:31,480 --> 00:00:34,440 Speaker 2: in the United States of America, and Elon reminds us 11 00:00:34,440 --> 00:00:38,200 Speaker 2: of that. I'm very disappointed in Elan. I've helped Elon 12 00:00:38,320 --> 00:00:49,200 Speaker 2: a lot. Welcome to Elan and Bloomberg's weekly podcast about 13 00:00:49,240 --> 00:00:54,320 Speaker 2: Elon Muskets, Tuesday, August fifth. I'm your host, David Papadopolis. Okay, 14 00:00:55,040 --> 00:00:59,720 Speaker 2: so here's this week's show. In three large numbers to 15 00:01:00,040 --> 00:01:04,120 Speaker 2: undred and forty three million dollars, thirty billion dollars, and 16 00:01:04,240 --> 00:01:07,720 Speaker 2: two point two billion dollars. The first is the amount 17 00:01:07,760 --> 00:01:10,320 Speaker 2: of money of Florida jury ordered Tesla to pay the 18 00:01:10,400 --> 00:01:12,880 Speaker 2: victims of a crash that took place when a driver 19 00:01:13,080 --> 00:01:18,360 Speaker 2: had autopilot engaged. The second is the quote introm Close 20 00:01:18,440 --> 00:01:22,720 Speaker 2: quotes Stock Award that Tesla's bord handed Elon yesterday. And 21 00:01:22,800 --> 00:01:26,360 Speaker 2: the third is the plunge in the estimated value, perhaps 22 00:01:26,400 --> 00:01:30,720 Speaker 2: the least loved of the Musk businesses, the boring Company. 23 00:01:31,520 --> 00:01:34,040 Speaker 2: So we have an eclectic cast of characters to bring 24 00:01:34,080 --> 00:01:37,960 Speaker 2: you each segment, and we'll start with Elon Inks stalwarts 25 00:01:38,080 --> 00:01:41,200 Speaker 2: Dana Hall and Max Chafkin. Hello to you both. 26 00:01:41,520 --> 00:01:43,200 Speaker 3: Hey, David, Hey Dana, Hey guys. 27 00:01:43,840 --> 00:01:46,720 Speaker 2: And we have a special guest, professor Missy Cummings, who's 28 00:01:46,720 --> 00:01:50,559 Speaker 2: the director of Mason's Autonomy and Robotics Center at George 29 00:01:50,560 --> 00:01:55,800 Speaker 2: Mason University and who was a expert witness in this trial, 30 00:01:56,880 --> 00:02:01,280 Speaker 2: to talk about the Tesla autopilot rule link. Missy, Welcome 31 00:02:01,320 --> 00:02:01,760 Speaker 2: to the show. 32 00:02:02,040 --> 00:02:03,000 Speaker 1: Thank you for having me. 33 00:02:03,680 --> 00:02:07,760 Speaker 2: Okay, So, Dana, before we do tap into Missy's expertise, 34 00:02:07,800 --> 00:02:10,440 Speaker 2: here set the scene for us a little bit. What 35 00:02:10,680 --> 00:02:14,080 Speaker 2: happened on that day back in twenty nineteen, and what 36 00:02:14,280 --> 00:02:17,440 Speaker 2: exactly did the Florida jury say last week? 37 00:02:18,240 --> 00:02:21,000 Speaker 4: Yeah, so this You know, there are lots of autopilot crashes, 38 00:02:21,040 --> 00:02:24,240 Speaker 4: some have gotten enormous media attention, some have not. This 39 00:02:24,360 --> 00:02:27,080 Speaker 4: was a crash that occurred in twenty nineteen where the 40 00:02:27,160 --> 00:02:31,480 Speaker 4: driver of a Tesla. Basically, he was on hold with 41 00:02:31,520 --> 00:02:34,760 Speaker 4: an airline making a phone call, dropped his phone, reached 42 00:02:34,760 --> 00:02:38,680 Speaker 4: for his phone, and then managed to t bone a 43 00:02:38,760 --> 00:02:42,760 Speaker 4: parked car where a young couple was stargazing, killing the 44 00:02:42,800 --> 00:02:48,200 Speaker 4: woman and gravely injuring the man and the driver. You know, 45 00:02:48,320 --> 00:02:50,880 Speaker 4: already kind of settled with this family, but the family 46 00:02:50,919 --> 00:02:55,639 Speaker 4: sued Tesla. And surprisingly, we've had Tesla in a lot 47 00:02:55,639 --> 00:02:58,799 Speaker 4: of court cases, and often they settle before the eve 48 00:02:58,800 --> 00:03:01,680 Speaker 4: of trial. But this went to trial in Miami. Missy 49 00:03:01,800 --> 00:03:05,519 Speaker 4: was one of the witnesses, and the jury found Tesla 50 00:03:05,639 --> 00:03:08,600 Speaker 4: liable not just for damages but for punitive damages, which 51 00:03:08,639 --> 00:03:12,240 Speaker 4: I think is significant because even though the driver himself, 52 00:03:12,639 --> 00:03:15,040 Speaker 4: you know, testified that he had dropped his phone and 53 00:03:15,160 --> 00:03:18,720 Speaker 4: was distracted, the company itself was found liable. And it 54 00:03:18,800 --> 00:03:21,280 Speaker 4: was just an extraordinary case on so many measures. I mean, 55 00:03:21,320 --> 00:03:24,320 Speaker 4: I was not there in Miami, but you know, Missy, 56 00:03:24,440 --> 00:03:26,200 Speaker 4: like you were there, I mean, it was it was 57 00:03:26,240 --> 00:03:28,160 Speaker 4: what did you think when when the verdicts came out 58 00:03:28,160 --> 00:03:30,240 Speaker 4: and what did you specifically testify about? 59 00:03:30,800 --> 00:03:35,320 Speaker 1: Well, there were several expert witnesses, but my specific area 60 00:03:35,800 --> 00:03:41,240 Speaker 1: is AI expertise and then regulatory expertise. Since I had 61 00:03:41,280 --> 00:03:45,800 Speaker 1: worked at Nitze for a year, so you know, jury trials, 62 00:03:45,960 --> 00:03:49,040 Speaker 1: you just never know. I got a good sense when 63 00:03:49,080 --> 00:03:54,240 Speaker 1: I was testifying because the jury was listening and you're 64 00:03:54,320 --> 00:03:57,120 Speaker 1: explaining technical concepts and you can see it, you know, 65 00:03:57,120 --> 00:03:59,920 Speaker 1: as a professor, I can see somebody check out fast 66 00:04:00,240 --> 00:04:03,640 Speaker 1: than anyone. But they were not checked out. They were 67 00:04:03,680 --> 00:04:08,480 Speaker 1: paying attention. And I think that they both understood the 68 00:04:08,560 --> 00:04:12,280 Speaker 1: technical issues which led to them finding Tesla. You know, 69 00:04:12,320 --> 00:04:16,680 Speaker 1: in this case, I think it was thirty three percent liable. 70 00:04:17,520 --> 00:04:21,160 Speaker 1: But I also think that the jury understood the punitive 71 00:04:21,240 --> 00:04:24,000 Speaker 1: damages were due to Tesla's cover up of a lot 72 00:04:24,000 --> 00:04:27,000 Speaker 1: of the data. And I think they got that too. 73 00:04:27,520 --> 00:04:29,559 Speaker 4: Speak a little bit about the cover up of the data, 74 00:04:29,600 --> 00:04:31,480 Speaker 4: because that was a really wild thig. I know that 75 00:04:31,520 --> 00:04:35,240 Speaker 4: the attorney for the Benavitaz family made like an augmented 76 00:04:35,320 --> 00:04:37,560 Speaker 4: video that was based on what they were able to 77 00:04:37,600 --> 00:04:40,039 Speaker 4: extract from the onboard computer. And there was a hole 78 00:04:40,080 --> 00:04:42,560 Speaker 4: back and forth about did Tesla know that it have 79 00:04:42,720 --> 00:04:46,080 Speaker 4: this data or they did they hide it? How significant 80 00:04:46,200 --> 00:04:46,440 Speaker 4: was that? 81 00:04:47,120 --> 00:04:49,680 Speaker 1: I mean, it was deleted and we knew we could 82 00:04:49,760 --> 00:04:52,719 Speaker 1: see it in the files, but because we were able 83 00:04:52,760 --> 00:04:55,640 Speaker 1: to recover it it was undeniable. But we knew that 84 00:04:55,680 --> 00:04:58,760 Speaker 1: these augmented videos existed because I had been an expert 85 00:04:58,760 --> 00:05:03,240 Speaker 1: witness in other cases where I had seen the annotated video. 86 00:05:03,360 --> 00:05:05,840 Speaker 1: This is a video of any crash that they have. 87 00:05:06,600 --> 00:05:10,040 Speaker 1: Your car records what's going in in the frontal camera view, 88 00:05:10,080 --> 00:05:13,120 Speaker 1: but it also records everything that it sees, and so 89 00:05:13,160 --> 00:05:16,080 Speaker 1: we know that this data exists. It exists for every 90 00:05:16,120 --> 00:05:19,680 Speaker 1: single Tesla, every single day. And so for Tesla to 91 00:05:19,720 --> 00:05:22,200 Speaker 1: try to cover this up, you know, I'm not an attorney, 92 00:05:22,279 --> 00:05:24,080 Speaker 1: but I thought it bordered on criminal. 93 00:05:24,440 --> 00:05:27,719 Speaker 2: So they sought to cover it up by saying what that, Oh, 94 00:05:27,760 --> 00:05:30,000 Speaker 2: we don't simply don't have it. 95 00:05:30,040 --> 00:05:32,599 Speaker 1: And yeah, they were trying not to give us the data. 96 00:05:32,680 --> 00:05:35,159 Speaker 1: And if it hadn't been for the digital forensics person 97 00:05:35,200 --> 00:05:37,719 Speaker 1: that we had on this, it would have gone unnoticed. 98 00:05:37,760 --> 00:05:41,040 Speaker 1: And why that's critical is we were able to show 99 00:05:41,200 --> 00:05:45,680 Speaker 1: what the car saw and what it quote unquote knew 100 00:05:45,960 --> 00:05:48,920 Speaker 1: was going to happen. So you know, with several seconds 101 00:05:48,960 --> 00:05:52,720 Speaker 1: to spare, the car saw the end of the road 102 00:05:52,800 --> 00:05:58,280 Speaker 1: coming and decided to project drivable space into the wilderness. 103 00:05:58,360 --> 00:06:01,039 Speaker 1: So it knows that the the road is coming. It 104 00:06:01,080 --> 00:06:04,000 Speaker 1: has the map that knows it's coming, but still the 105 00:06:04,040 --> 00:06:07,040 Speaker 1: car decided to go ahead and drive in the wilderness. 106 00:06:07,120 --> 00:06:10,520 Speaker 1: So even if this other car hadn't been there, the 107 00:06:10,560 --> 00:06:13,480 Speaker 1: car would have gone off the road. And indeed that 108 00:06:13,680 --> 00:06:18,320 Speaker 1: the computer vision system actually saw a car there and 109 00:06:18,440 --> 00:06:22,680 Speaker 1: never alerted the driver and never engaged the emergency braking system. 110 00:06:23,400 --> 00:06:28,719 Speaker 2: Why isn't though Tesla's argument correct though that, and I 111 00:06:28,760 --> 00:06:30,680 Speaker 2: believe by the way other juries in the past have 112 00:06:30,760 --> 00:06:34,840 Speaker 2: found it to be that, hey, you know, autopilot is 113 00:06:34,880 --> 00:06:38,680 Speaker 2: there just to assist you. You are still the driver 114 00:06:39,640 --> 00:06:42,599 Speaker 2: and you need to be responsible for your vehicle and 115 00:06:42,640 --> 00:06:45,919 Speaker 2: paying attention and not looking for your phone when it 116 00:06:46,000 --> 00:06:47,120 Speaker 2: falls on the floor. 117 00:06:47,680 --> 00:06:50,320 Speaker 5: Yeah, well this came up in this case as well 118 00:06:50,360 --> 00:06:53,200 Speaker 5: as other ones in the past. Tesla has said that 119 00:06:53,720 --> 00:06:57,760 Speaker 5: in court often and perhaps in sort of legal back 120 00:06:57,800 --> 00:07:00,120 Speaker 5: and forth. But if you look at the messaging that 121 00:07:00,160 --> 00:07:02,680 Speaker 5: the company has employed, and this is part of the 122 00:07:02,720 --> 00:07:06,280 Speaker 5: reason why I think the jury and why many people 123 00:07:06,320 --> 00:07:09,680 Speaker 5: are sympathetic to some of these drivers who have taken 124 00:07:09,720 --> 00:07:13,000 Speaker 5: their eyes off the road while they're using autopilot or 125 00:07:13,040 --> 00:07:15,960 Speaker 5: full self driving. You know, we've seen cases of full 126 00:07:16,000 --> 00:07:19,960 Speaker 5: self driving also leading to issues, and it's because if 127 00:07:20,000 --> 00:07:23,160 Speaker 5: you like, listen to what Elon Musk says. You think 128 00:07:23,200 --> 00:07:25,800 Speaker 5: it's better than a human He says it all the time, 129 00:07:25,920 --> 00:07:28,560 Speaker 5: and he continues to say it. Part of me thinks 130 00:07:28,600 --> 00:07:32,240 Speaker 5: that this case may start to undercut that story, just 131 00:07:32,280 --> 00:07:36,800 Speaker 5: because reading the details that came out here are so powerful. 132 00:07:36,880 --> 00:07:41,560 Speaker 5: You have, as Missy is saying, a technological system that 133 00:07:41,720 --> 00:07:45,560 Speaker 5: is inadequate, and Missy's saying it saw the road. 134 00:07:45,600 --> 00:07:49,320 Speaker 2: But yeah, but in fairness is this technology this is 135 00:07:49,400 --> 00:07:52,480 Speaker 2: six years old right from twenty nineteen, missy, Do you 136 00:07:52,520 --> 00:07:56,480 Speaker 2: have a sense how much progress their technology is made 137 00:07:56,480 --> 00:07:58,720 Speaker 2: from twenty nineteen to today? 138 00:07:58,880 --> 00:08:03,320 Speaker 1: Well, you know, so full self driving is in existence 139 00:08:04,120 --> 00:08:08,000 Speaker 1: today and it wasn't a product back then, and you can't. 140 00:08:08,080 --> 00:08:10,320 Speaker 1: It's hard to separate out those two because the computer 141 00:08:10,400 --> 00:08:13,600 Speaker 1: vision system, for example, that works for autopilot is a 142 00:08:13,600 --> 00:08:16,960 Speaker 1: critical part of full self driving, and indeed, they were 143 00:08:17,080 --> 00:08:18,920 Speaker 1: using a lot of the data that they were getting 144 00:08:18,960 --> 00:08:24,360 Speaker 1: an autopilot mode to inform full self driving mode. What 145 00:08:24,400 --> 00:08:28,640 Speaker 1: I will tell you is, as a robotics professor, have 146 00:08:28,840 --> 00:08:34,199 Speaker 1: I seen a dramatic leap in capability from twenty nineteen 147 00:08:34,240 --> 00:08:35,280 Speaker 1: to twenty twenty five? 148 00:08:35,679 --> 00:08:35,959 Speaker 2: No? 149 00:08:36,520 --> 00:08:41,640 Speaker 1: Indeed, I think that what this case showed me as 150 00:08:41,679 --> 00:08:45,360 Speaker 1: an expert. Because I looked at all their testing documentation 151 00:08:45,679 --> 00:08:49,000 Speaker 1: or the lack thereof, I got news for you. Self 152 00:08:49,040 --> 00:08:51,840 Speaker 1: drive is not happening for them. I've seen under the covers, 153 00:08:52,080 --> 00:08:57,840 Speaker 1: and they're just their procedures, processes, what they value, what 154 00:08:57,920 --> 00:09:00,360 Speaker 1: they don't value in terms of testing, whther or not 155 00:09:00,440 --> 00:09:03,400 Speaker 1: you can do all this shadow testing, I see still 156 00:09:03,640 --> 00:09:08,880 Speaker 1: an extremely immature company that just does not know how 157 00:09:08,920 --> 00:09:12,560 Speaker 1: to build a safety critical technology. They've been able to 158 00:09:12,600 --> 00:09:17,280 Speaker 1: dodge responsibility up to now because the driver was the scapegoat, 159 00:09:17,559 --> 00:09:21,640 Speaker 1: but when it's self driving happens, there's no scapegoat. It's 160 00:09:21,679 --> 00:09:22,080 Speaker 1: all them. 161 00:09:22,640 --> 00:09:25,600 Speaker 2: So Dan, we've alluded briefly here to the fact that 162 00:09:25,640 --> 00:09:29,800 Speaker 2: Tesla pushes back, of course, and they have worked very 163 00:09:29,840 --> 00:09:33,680 Speaker 2: hard to do so. What is their exact line, Well. 164 00:09:33,640 --> 00:09:36,080 Speaker 4: Tesla argues that the driver is a fault because he 165 00:09:36,200 --> 00:09:40,080 Speaker 4: was distracted, and in their statement they say today's verdict 166 00:09:40,160 --> 00:09:43,000 Speaker 4: is wrong and only works to set back automotive safety 167 00:09:43,080 --> 00:09:47,120 Speaker 4: and jeopardize Tesla's and the entire industry's efforts to develop 168 00:09:47,160 --> 00:09:50,760 Speaker 4: and implement life saving technology. We plan to appeal given 169 00:09:50,800 --> 00:09:54,520 Speaker 4: the substantial errors of law and irregularities at trial. You know, 170 00:09:54,559 --> 00:09:57,920 Speaker 4: Tesla often blames the driver in these cases. But the 171 00:09:57,960 --> 00:09:59,640 Speaker 4: other thing that I think is really important to point 172 00:09:59,640 --> 00:10:02,400 Speaker 4: out is this was a unique case in that the 173 00:10:02,480 --> 00:10:06,079 Speaker 4: victim here was not the driver or the driver of 174 00:10:06,120 --> 00:10:08,800 Speaker 4: another vehicle. It was pedestrians. It was like a young 175 00:10:08,840 --> 00:10:11,360 Speaker 4: couple that had pulled over to like look at the stars. 176 00:10:11,440 --> 00:10:14,640 Speaker 4: They did not sign up to be part of this experiment. 177 00:10:14,760 --> 00:10:18,439 Speaker 4: And that is that is like another whole aspect of this. 178 00:10:18,720 --> 00:10:21,439 Speaker 4: So often in crash cases, it's what did the driver 179 00:10:21,520 --> 00:10:24,120 Speaker 4: do or not do? But these people were completely innocent. 180 00:10:24,160 --> 00:10:26,040 Speaker 4: They were not even in their car, and they had 181 00:10:26,040 --> 00:10:27,959 Speaker 4: pulled over to the side. They were not even driving. 182 00:10:28,080 --> 00:10:31,800 Speaker 4: It was a stationary object and behind some signs. They 183 00:10:31,840 --> 00:10:35,440 Speaker 4: parked behind something thinking that these signs would protect them. 184 00:10:35,640 --> 00:10:36,000 Speaker 1: Yeah. 185 00:10:36,040 --> 00:10:39,720 Speaker 2: Wow, okay, Missy, I was struck by something you said 186 00:10:39,720 --> 00:10:43,640 Speaker 2: a little bit earlier. Full self driving isn't happening for 187 00:10:43,679 --> 00:10:48,080 Speaker 2: them than being Tesla now. So much of the company's 188 00:10:48,080 --> 00:10:54,040 Speaker 2: nearly trillion dollar valuation is predicated on full self driving 189 00:10:54,080 --> 00:10:58,520 Speaker 2: happing for them and robotaxi being a thing. So there's that. 190 00:10:58,600 --> 00:11:04,520 Speaker 2: But moreover, Missy, there are already these vehicles buzzing around, 191 00:11:04,720 --> 00:11:09,120 Speaker 2: these robotaxies buzzing around in Austin and perhaps soon to 192 00:11:09,160 --> 00:11:11,600 Speaker 2: be in other cities. Should that worry. 193 00:11:11,360 --> 00:11:14,439 Speaker 1: Us, well, I think it's first of all, really important 194 00:11:14,600 --> 00:11:19,480 Speaker 1: words matter here. Full self driving is a product which 195 00:11:20,000 --> 00:11:24,080 Speaker 1: is recently had its name change to supervised full self driving, 196 00:11:24,160 --> 00:11:27,760 Speaker 1: really because of all these lawsuits. Right, so I'd like 197 00:11:27,800 --> 00:11:30,920 Speaker 1: to distinguish between their product full self driving and actual 198 00:11:31,000 --> 00:11:34,640 Speaker 1: self driving, which is still not happening for them. They 199 00:11:34,800 --> 00:11:38,960 Speaker 1: have robotaxis in Austin, there's a person in the right seat, 200 00:11:39,559 --> 00:11:42,880 Speaker 1: there's remote operators, and in some cases we know that 201 00:11:42,920 --> 00:11:46,960 Speaker 1: there have been either leading or trailing cars that help 202 00:11:47,040 --> 00:11:52,160 Speaker 1: protect the envelope around the car. There's no legitimate self 203 00:11:52,240 --> 00:11:54,880 Speaker 1: driving car company that's on the road today with this 204 00:11:55,080 --> 00:12:00,200 Speaker 1: amount of babysitting. Look, I'm telling you I'm a robots professor. 205 00:12:00,120 --> 00:12:03,920 Speaker 1: Or they're using one sensor, one sensor stream to do everything. 206 00:12:04,200 --> 00:12:06,840 Speaker 1: One thing we know in robotics that is a super 207 00:12:06,840 --> 00:12:09,880 Speaker 1: bad idea in a stagey critical system, and it won't work. 208 00:12:10,160 --> 00:12:12,400 Speaker 1: It just is not going to work. I don't care 209 00:12:12,679 --> 00:12:15,040 Speaker 1: what they do with the software. I don't care how 210 00:12:15,120 --> 00:12:18,480 Speaker 1: much Dojo is in this. I don't care you know 211 00:12:18,600 --> 00:12:22,839 Speaker 1: whether or not he gets a gazillion dollar bonus from 212 00:12:22,880 --> 00:12:27,400 Speaker 1: the company. It's not going to happen because technically it 213 00:12:27,559 --> 00:12:30,520 Speaker 1: cannot happen for the kinds of systems and the kinds 214 00:12:30,520 --> 00:12:35,080 Speaker 1: of speeds that they're operating at. So, you know, be 215 00:12:35,200 --> 00:12:37,520 Speaker 1: my guest, but I'm going to put my child through 216 00:12:37,520 --> 00:12:40,880 Speaker 1: college on these expert witness fees if they continue, Missy. 217 00:12:41,080 --> 00:12:43,439 Speaker 2: You know, Max and I have something of a running 218 00:12:43,720 --> 00:12:47,240 Speaker 2: debate slash feud on the show and off the show 219 00:12:47,360 --> 00:12:51,800 Speaker 2: about human drivers versus robot d robotic drivers and what 220 00:12:51,840 --> 00:12:54,880 Speaker 2: they can do. Max thinks humans are brilliant drivers. 221 00:12:55,160 --> 00:12:57,320 Speaker 5: I'm not so sure about robots. 222 00:12:57,360 --> 00:13:01,280 Speaker 2: Okay, I'm not so sure about that. Our lifetime's Missy, 223 00:13:01,600 --> 00:13:06,199 Speaker 2: will the four of us see a world in which 224 00:13:06,559 --> 00:13:11,120 Speaker 2: the robots are driving the vast, vast bulk of our vehicles? 225 00:13:11,400 --> 00:13:13,160 Speaker 5: Now, David, you owe me one hundred dollars? 226 00:13:13,200 --> 00:13:13,599 Speaker 2: No, I don't know. 227 00:13:15,280 --> 00:13:17,120 Speaker 4: I also just want to make the point that, you know, 228 00:13:17,240 --> 00:13:21,280 Speaker 4: Tesla really leans into this concept of Tesla Vision is 229 00:13:21,679 --> 00:13:25,640 Speaker 4: their system. They've got cameras and this incredible brain. But 230 00:13:25,800 --> 00:13:27,720 Speaker 4: I would just like to point out that humans don't 231 00:13:27,760 --> 00:13:29,880 Speaker 4: just drive with their eyes and their brain. You use 232 00:13:29,920 --> 00:13:32,240 Speaker 4: your ears, You listen to sound. You listen and you 233 00:13:32,320 --> 00:13:35,920 Speaker 4: feel the roadway, like driving is a multisensory experience. It's 234 00:13:35,960 --> 00:13:38,600 Speaker 4: not just your eyes, that's all. 235 00:13:38,880 --> 00:13:42,880 Speaker 1: Waymou likes to say that they have safer drivers than 236 00:13:43,760 --> 00:13:46,800 Speaker 1: human their cars are safer than humans, which is debatable. 237 00:13:47,000 --> 00:13:49,320 Speaker 1: But you also have to remember that all these cars 238 00:13:49,360 --> 00:13:52,400 Speaker 1: have teams of people from the Philippines watching their every move. 239 00:13:52,880 --> 00:13:55,800 Speaker 1: If every single one of us had a remote operation 240 00:13:56,000 --> 00:13:59,480 Speaker 1: center watching our every single move, we'd all be better drivers. Right, 241 00:13:59,559 --> 00:14:02,679 Speaker 1: So I wish people would stop making that comparison because 242 00:14:02,679 --> 00:14:03,920 Speaker 1: it's an Apple's to launches. 243 00:14:04,320 --> 00:14:08,160 Speaker 2: All right, Missy, this was great. You will most certainly 244 00:14:08,720 --> 00:14:10,400 Speaker 2: have to come back and join us again. 245 00:14:10,720 --> 00:14:11,360 Speaker 1: Would love to. 246 00:14:16,760 --> 00:14:23,520 Speaker 2: Max Dana more Tesla News. Elon just was handed something 247 00:14:24,080 --> 00:14:26,960 Speaker 2: that we're calling an intram pay package. Max, this is 248 00:14:26,960 --> 00:14:27,400 Speaker 2: a billion. 249 00:14:27,520 --> 00:14:29,200 Speaker 5: This is a feel good story, I think for all 250 00:14:29,240 --> 00:14:32,120 Speaker 5: of us, all of us, Yeah, who just would like 251 00:14:32,160 --> 00:14:35,920 Speaker 5: to get paid more money? Elon Musk getting thirty billion 252 00:14:36,000 --> 00:14:38,280 Speaker 5: dollars come on over the next two years. 253 00:14:38,720 --> 00:14:41,080 Speaker 3: Having I think over the last couple of. 254 00:14:41,120 --> 00:14:45,000 Speaker 5: Years, anyway, done a questionable job leading Tesla, right, Like 255 00:14:45,040 --> 00:14:46,960 Speaker 5: the stock has not done super well. There's been a 256 00:14:46,960 --> 00:14:50,920 Speaker 5: swirl of controversies but lawsuits, as we've discussed. But of 257 00:14:50,960 --> 00:14:53,400 Speaker 5: course this award is not just about the last couple 258 00:14:53,400 --> 00:14:56,840 Speaker 5: of years. It's about this other stock award. The board 259 00:14:56,920 --> 00:14:59,760 Speaker 5: is attempting to sort of create a make good on 260 00:14:59,800 --> 00:15:03,280 Speaker 5: their pay package from twenty eighteen that was invalidated by 261 00:15:03,280 --> 00:15:06,400 Speaker 5: the Delaware court. So though although in some ways it 262 00:15:06,480 --> 00:15:08,040 Speaker 5: looks like a guy. 263 00:15:08,440 --> 00:15:10,840 Speaker 2: Being paid for no. 264 00:15:11,400 --> 00:15:16,200 Speaker 5: Clear reason, it's actually an attempt to like recreate some 265 00:15:16,440 --> 00:15:19,040 Speaker 5: part of that gigantic pay package that he has yet 266 00:15:19,040 --> 00:15:19,400 Speaker 5: to receive. 267 00:15:19,600 --> 00:15:23,440 Speaker 2: Yeah, so of course the ultimate valuation or value will 268 00:15:23,520 --> 00:15:26,560 Speaker 2: will be determined by the performance of the stock. But 269 00:15:26,680 --> 00:15:30,600 Speaker 2: give or take thirty billion dollars, so he gets this now, 270 00:15:30,880 --> 00:15:34,000 Speaker 2: and what if lo and behold in that court case, 271 00:15:34,160 --> 00:15:36,360 Speaker 2: they also say yeah you can in the end, all right, 272 00:15:36,440 --> 00:15:40,320 Speaker 2: yeah you can have that money. Does he get both packages? No, 273 00:15:40,520 --> 00:15:41,040 Speaker 2: he doesn't. 274 00:15:41,160 --> 00:15:44,080 Speaker 5: The way this is written is if they somehow are 275 00:15:44,160 --> 00:15:48,440 Speaker 5: able to pay the original pay package, which the valuations 276 00:15:48,800 --> 00:15:50,520 Speaker 5: are all over the place because it kind of depends 277 00:15:50,520 --> 00:15:53,040 Speaker 5: on the stock price. But I think when we initially 278 00:15:53,120 --> 00:15:55,920 Speaker 5: talked about this it was in the fifty billion ish range. 279 00:15:56,120 --> 00:15:58,840 Speaker 5: It's it's been worth I think a bit more at 280 00:15:58,880 --> 00:16:04,080 Speaker 5: various times. If that package is somehow approved because of 281 00:16:04,120 --> 00:16:08,080 Speaker 5: appeals or whatever, then this package would be invalidated. This 282 00:16:08,280 --> 00:16:12,480 Speaker 5: is only valid if Elon Musk does not get that 283 00:16:12,640 --> 00:16:16,720 Speaker 5: one and he works at Tesla for the next two years, 284 00:16:17,040 --> 00:16:20,600 Speaker 5: and then the intent is to give him another giant 285 00:16:20,640 --> 00:16:24,120 Speaker 5: pay package for his current work, because again this is 286 00:16:24,160 --> 00:16:26,600 Speaker 5: a backwards as we're talking about work that has already 287 00:16:26,640 --> 00:16:27,240 Speaker 5: been performed. 288 00:16:27,360 --> 00:16:29,480 Speaker 4: Yeah, this is like an interim pay package to keep 289 00:16:29,560 --> 00:16:33,040 Speaker 4: Elon focused on Tesla while the Special Committee of the 290 00:16:33,040 --> 00:16:37,440 Speaker 4: board works on a new pay package to incentivize him 291 00:16:37,560 --> 00:16:40,880 Speaker 4: going forward. And this is all because you know, the 292 00:16:40,920 --> 00:16:45,200 Speaker 4: pay package was invalidated by the judge in Delaware, then 293 00:16:45,240 --> 00:16:48,760 Speaker 4: Tesla appealed to the Delaware Supreme Court. That appeal process 294 00:16:48,840 --> 00:16:49,560 Speaker 4: is taking forever. 295 00:16:49,680 --> 00:16:49,960 Speaker 3: I think. 296 00:16:49,960 --> 00:16:52,000 Speaker 4: Originally, you know, we all hope that maybe we would 297 00:16:52,000 --> 00:16:55,040 Speaker 4: get a resolution to that sometime this year, but it's 298 00:16:55,080 --> 00:16:56,920 Speaker 4: still going on. So, like they need to give him 299 00:16:56,920 --> 00:16:59,480 Speaker 4: something because from the board's perspective and a lot of 300 00:16:59,480 --> 00:17:03,200 Speaker 4: the retail shareholders, they're like, Elon hasn't been paid since, 301 00:17:03,320 --> 00:17:05,440 Speaker 4: you know, for years. He deserves to. 302 00:17:05,359 --> 00:17:07,359 Speaker 2: Get Like how is he how is he living and 303 00:17:07,400 --> 00:17:08,800 Speaker 2: eating and paying rent back? 304 00:17:09,320 --> 00:17:10,919 Speaker 4: The other thing you remember is that you know, on 305 00:17:10,960 --> 00:17:13,719 Speaker 4: the one hand, this is about pay and like giving 306 00:17:13,720 --> 00:17:18,560 Speaker 4: Elon ninety six million shares dilutes everybody else. But for Elon, 307 00:17:18,640 --> 00:17:21,359 Speaker 4: it's also about control. I mean, he's been very public 308 00:17:21,400 --> 00:17:24,280 Speaker 4: about the fact that he's worried about activist shareholders and 309 00:17:24,840 --> 00:17:28,360 Speaker 4: he wants more control, and the more shares he gets, 310 00:17:28,400 --> 00:17:29,720 Speaker 4: the more control he has. 311 00:17:30,000 --> 00:17:33,760 Speaker 5: But that's kind of a hilarious concern, his concern about control, 312 00:17:33,840 --> 00:17:37,680 Speaker 5: given that he effectively controls Tesla today. I mean, yeah, 313 00:17:37,680 --> 00:17:40,720 Speaker 5: he only has something like twelve percent of the equity 314 00:17:41,119 --> 00:17:44,920 Speaker 5: in the company, But as we've talked about a million times, 315 00:17:45,200 --> 00:17:48,080 Speaker 5: he can say whatever he wants and it basically happens. 316 00:17:48,119 --> 00:17:51,560 Speaker 2: Okay, Dan, we will say goodbye to you and we'll 317 00:17:51,560 --> 00:17:52,359 Speaker 2: see you next week. 318 00:17:52,560 --> 00:17:52,959 Speaker 3: Thank you. 319 00:17:59,040 --> 00:17:59,159 Speaker 1: All. 320 00:17:59,240 --> 00:18:01,679 Speaker 2: Right Now, Max and I are joined by Kyle Porter, 321 00:18:01,920 --> 00:18:07,000 Speaker 2: who covers transport industrials in space for us here at Bloomberg. Kyle, 322 00:18:07,080 --> 00:18:07,919 Speaker 2: Welcome to the show. 323 00:18:08,119 --> 00:18:09,119 Speaker 3: Thanks for having me, guys. 324 00:18:09,440 --> 00:18:11,480 Speaker 2: Now, Kyle, you had a really good piece the other 325 00:18:11,560 --> 00:18:14,240 Speaker 2: day about the boring Company. 326 00:18:14,280 --> 00:18:14,520 Speaker 5: Max. 327 00:18:14,560 --> 00:18:16,840 Speaker 2: The boring company. You guys were just talking about all 328 00:18:16,880 --> 00:18:20,200 Speaker 2: of a sudden boring everywhere, Boring everywhere. 329 00:18:20,240 --> 00:18:23,359 Speaker 5: It's the forgotten Elon Musk Company to stomach scent. Although 330 00:18:23,400 --> 00:18:25,879 Speaker 5: here we are talking about it. Uh, this is a 331 00:18:25,920 --> 00:18:26,520 Speaker 5: second week in. 332 00:18:26,520 --> 00:18:30,159 Speaker 2: A row, back to back boring. Yeah, So, Kyle, just 333 00:18:30,680 --> 00:18:33,439 Speaker 2: to begin at the very beginning here for the uninitiated, 334 00:18:33,760 --> 00:18:37,280 Speaker 2: remind us what the Boring Company is and does. 335 00:18:38,280 --> 00:18:41,600 Speaker 3: The Boring Company is a nearly decade old effort by 336 00:18:41,720 --> 00:18:47,199 Speaker 3: Musk to reinvent public transportation, in this instance by digging 337 00:18:47,320 --> 00:18:50,800 Speaker 3: tunnels in which he will put his teslas underground and 338 00:18:50,920 --> 00:18:52,520 Speaker 3: whisk you around without traffic. 339 00:18:53,040 --> 00:18:55,800 Speaker 2: Now, Kyle, I liked your piece quite a bit. In 340 00:18:55,880 --> 00:18:59,720 Speaker 2: your piece, titled Elon Musk's Boring Company is Turning into 341 00:18:59,720 --> 00:19:03,600 Speaker 2: a nine hundred million dollar flop, begins with a fantastic 342 00:19:03,680 --> 00:19:07,119 Speaker 2: anecdote at the beginning there that really sets the scene 343 00:19:07,400 --> 00:19:11,320 Speaker 2: and tells us a lot about the state of affairs 344 00:19:11,320 --> 00:19:14,000 Speaker 2: there at the company. Right now, tell us about it. 345 00:19:14,440 --> 00:19:18,280 Speaker 3: Yeah, it was September thirtieth. In fact, it was completely unplanned. 346 00:19:18,440 --> 00:19:22,400 Speaker 3: Everyone boring factory got told on thirty minutes notice, get 347 00:19:22,400 --> 00:19:24,879 Speaker 3: out to the boudego across the road. Elon's doing an 348 00:19:24,880 --> 00:19:27,640 Speaker 3: all hands. People were very excited. They hadn't really seen 349 00:19:27,720 --> 00:19:30,680 Speaker 3: him on site all year. So they paraded across. Then 350 00:19:30,760 --> 00:19:33,520 Speaker 3: Elon spent the next hour talking about why everyone needs 351 00:19:33,520 --> 00:19:35,600 Speaker 3: to vote for Trump, how great it's going to be 352 00:19:35,600 --> 00:19:38,960 Speaker 3: for SpaceX and its regulatory burden, was asking for ideas 353 00:19:38,960 --> 00:19:41,679 Speaker 3: from the crowd, was asking for volunteers, for people to 354 00:19:41,680 --> 00:19:44,800 Speaker 3: go to swing states, including Pennsylvania, and then he wrapped 355 00:19:44,880 --> 00:19:47,199 Speaker 3: up his talk, took a few more questions, and went 356 00:19:47,240 --> 00:19:49,840 Speaker 3: across the SpaceX didn't even bother visiting the factory. 357 00:19:50,000 --> 00:19:52,680 Speaker 2: So how about that, Bax, You don't see the guy forever. 358 00:19:52,760 --> 00:19:56,360 Speaker 2: He shows up and let's talk about everything, but what 359 00:19:56,440 --> 00:19:57,840 Speaker 2: you're doing day in and day out. 360 00:19:58,160 --> 00:19:58,960 Speaker 3: I mean, here's the thing. 361 00:19:59,080 --> 00:20:02,760 Speaker 5: If it were a normal there would be nothing even 362 00:20:03,000 --> 00:20:07,120 Speaker 5: the least bit unusual about that. I'd say. The thing 363 00:20:07,160 --> 00:20:09,760 Speaker 5: that is interesting is it really cuts against the Elon 364 00:20:09,840 --> 00:20:12,800 Speaker 5: Musk mythology, which is like he's in the factory, he's 365 00:20:13,160 --> 00:20:17,399 Speaker 5: personally evaluating the tunnel machines or whatever. And of course 366 00:20:17,880 --> 00:20:20,720 Speaker 5: it also the anecdote and the fact that he's just 367 00:20:20,880 --> 00:20:23,040 Speaker 5: all he wanted to talk about was politics or whatever 368 00:20:23,240 --> 00:20:27,119 Speaker 5: and space Yeah, it emphasizes this idea that like he 369 00:20:27,240 --> 00:20:32,480 Speaker 5: started the Boring Company in twenty seventeen and at the 370 00:20:32,560 --> 00:20:36,960 Speaker 5: time it kind of seemed like a joke and it's 371 00:20:37,359 --> 00:20:40,479 Speaker 5: now Yeah, and now it feels like a joke that 372 00:20:40,520 --> 00:20:42,359 Speaker 5: has sort of gotten old or something. Right. I mean, 373 00:20:42,400 --> 00:20:45,640 Speaker 5: they just haven't been able to do all that much. 374 00:20:45,680 --> 00:20:48,000 Speaker 5: And Kyle's story makes that point. I mean, there's really 375 00:20:48,080 --> 00:20:52,800 Speaker 5: just like one actual example of a project, which is 376 00:20:52,920 --> 00:20:55,119 Speaker 5: the Vegas Loop, which, for lots of reasons that we 377 00:20:55,119 --> 00:20:57,680 Speaker 5: can talk about, you know, has not worked out all 378 00:20:57,720 --> 00:20:59,879 Speaker 5: that well, although you know, I guess to the credit 379 00:20:59,880 --> 00:21:02,360 Speaker 5: of the boring company, like it's there. You can definitely 380 00:21:02,400 --> 00:21:05,399 Speaker 5: go from the Westgate Hotel to like one side of 381 00:21:05,440 --> 00:21:07,440 Speaker 5: the Las Vegas Convention Center or another. 382 00:21:07,640 --> 00:21:10,560 Speaker 2: Now, yeah, Kyle, there there is the Vegas thing. 383 00:21:11,119 --> 00:21:11,520 Speaker 3: You said that. 384 00:21:11,560 --> 00:21:15,720 Speaker 2: There's also some test tunnel they did in California. Yeah, 385 00:21:15,720 --> 00:21:18,439 Speaker 2: that was the original, the original tunnel. I see. And 386 00:21:18,440 --> 00:21:20,600 Speaker 2: how long or short is that one? 387 00:21:21,359 --> 00:21:24,120 Speaker 3: Uh? I think they're looking less than two miles. I'd 388 00:21:24,119 --> 00:21:24,800 Speaker 3: have to double tuck. 389 00:21:25,000 --> 00:21:27,159 Speaker 2: Have the length, Yeah, have the length of the vaunted 390 00:21:27,240 --> 00:21:30,280 Speaker 2: Vegas Tunnel. Now, in your story, you talk about how 391 00:21:30,359 --> 00:21:33,200 Speaker 2: actually a lot of the work, the only work perhaps 392 00:21:33,440 --> 00:21:36,320 Speaker 2: by work, I mean actual digging work they're doing, is 393 00:21:36,560 --> 00:21:42,240 Speaker 2: underneath Musk's home and his businesses. In Texas. Tell us 394 00:21:42,280 --> 00:21:42,679 Speaker 2: about that. 395 00:21:43,240 --> 00:21:46,560 Speaker 3: Oh yeah, it's a little bit internal work. Well, there's 396 00:21:46,720 --> 00:21:49,159 Speaker 3: two tunnels currently operation, one of which is the Cyber 397 00:21:49,160 --> 00:21:51,960 Speaker 3: trop Tunnel, which, as it sounds, may have cyber trucks 398 00:21:52,000 --> 00:21:54,720 Speaker 3: out from the Testi factory. And there's an awful lot 399 00:21:54,760 --> 00:21:56,199 Speaker 3: of videos you can go and look at online at 400 00:21:56,200 --> 00:21:57,400 Speaker 3: how impressive it is. 401 00:21:57,400 --> 00:21:58,240 Speaker 2: Is it impressive? 402 00:21:58,960 --> 00:22:01,320 Speaker 3: Well, it's impressive that you can fit a slider truck 403 00:22:01,359 --> 00:22:03,240 Speaker 3: through it. I mean there is not much in terms 404 00:22:03,240 --> 00:22:05,000 Speaker 3: of wiggle room when I decided that tunnel. 405 00:22:05,240 --> 00:22:07,520 Speaker 2: So it's a little bit like selling one of those 406 00:22:07,560 --> 00:22:09,879 Speaker 2: ships through the Panama Canal Max. You've kind of been 407 00:22:09,920 --> 00:22:12,639 Speaker 2: not very very tight, all right, So you can you 408 00:22:12,640 --> 00:22:14,800 Speaker 2: can roll the cyber trucks out of this tunnel. What 409 00:22:14,880 --> 00:22:18,000 Speaker 2: else is there is this vaunted network of tunnels there 410 00:22:18,040 --> 00:22:18,679 Speaker 2: in Texas too. 411 00:22:18,960 --> 00:22:22,920 Speaker 3: You can walk underneath the road from Boring to say SpaceX, 412 00:22:23,320 --> 00:22:25,439 Speaker 3: and they are currently digging a tunnel. When I was there, 413 00:22:25,480 --> 00:22:28,600 Speaker 3: you could feel the ground vibrating that's going between X 414 00:22:28,600 --> 00:22:29,640 Speaker 3: and SpaceX as well. 415 00:22:29,760 --> 00:22:30,280 Speaker 2: So when you. 416 00:22:30,280 --> 00:22:33,480 Speaker 3: Actually go to that site, there are no sidewalks, there 417 00:22:33,520 --> 00:22:37,480 Speaker 3: are no stop signs, there are no pedestrianization. So rather 418 00:22:37,520 --> 00:22:39,680 Speaker 3: than just adding some pain, they decided it was much 419 00:22:39,720 --> 00:22:41,680 Speaker 3: cheaper and more efficient to dig under the road. 420 00:22:42,000 --> 00:22:45,880 Speaker 2: Okay, now, remind us again where exactly in Texas are we. 421 00:22:45,880 --> 00:22:49,639 Speaker 3: Here bass Drops. You're looking about thirty five minutes outside 422 00:22:49,640 --> 00:22:50,080 Speaker 3: of Bustin. 423 00:22:50,760 --> 00:22:54,240 Speaker 2: So Max said, when it was created about a decade ago, 424 00:22:54,320 --> 00:22:56,280 Speaker 2: it sort of seemed like a joke, which certainly was 425 00:22:56,320 --> 00:22:57,000 Speaker 2: the way I took it. 426 00:22:57,040 --> 00:22:59,359 Speaker 5: I mean, so I said that, and I mean it 427 00:22:59,400 --> 00:23:01,960 Speaker 5: sounds like I'm meaning glib, but it literally was a joke. 428 00:23:02,000 --> 00:23:04,760 Speaker 5: I mean, Musk was like on Twitter and he was like, 429 00:23:04,840 --> 00:23:08,080 Speaker 5: traffic's driving me crazy. I'm just gonna start boring tunnels, 430 00:23:08,119 --> 00:23:11,000 Speaker 5: and then he made a series of boring jokes like ah, 431 00:23:11,080 --> 00:23:13,560 Speaker 5: they'll be called the Boring Company, ha ha. Now and 432 00:23:13,600 --> 00:23:16,720 Speaker 5: it it, it did turn into a real company that 433 00:23:16,760 --> 00:23:20,679 Speaker 5: has done a bunch of sort of interesting things. I mean, 434 00:23:20,720 --> 00:23:25,000 Speaker 5: the challenge has been that the same essentially, the same 435 00:23:25,080 --> 00:23:28,080 Speaker 5: challenge that Musk was trying to address in the first place, 436 00:23:28,119 --> 00:23:32,040 Speaker 5: which is like, it's really hard to dig tunnels. You're underground, 437 00:23:32,080 --> 00:23:34,280 Speaker 5: you got to move earth, you know. And it turns 438 00:23:34,280 --> 00:23:36,000 Speaker 5: out that the industry, I mean, he spent a lot 439 00:23:36,040 --> 00:23:39,840 Speaker 5: of time, especially early on sort of criticizing you know, 440 00:23:39,920 --> 00:23:43,879 Speaker 5: how slowly tunnel machines work, how slow tunneling is. You 441 00:23:43,960 --> 00:23:46,800 Speaker 5: got all these permits and so on, and I don't know. 442 00:23:46,840 --> 00:23:48,600 Speaker 5: I mean, you look at the pace, you look at 443 00:23:48,600 --> 00:23:51,439 Speaker 5: the number of miles they've gone. It doesn't seem like 444 00:23:51,480 --> 00:23:52,760 Speaker 5: they've really improved it. 445 00:23:52,760 --> 00:23:54,200 Speaker 2: They've made it slower. 446 00:23:54,240 --> 00:23:56,720 Speaker 5: Actually I don't know that that's true, but it doesn't 447 00:23:56,720 --> 00:23:59,960 Speaker 5: seem like there have been huge improvements. And the other 448 00:24:00,160 --> 00:24:02,880 Speaker 5: thing that's sort of interesting Kyle's story points this out 449 00:24:02,880 --> 00:24:05,199 Speaker 5: as the thing that I heard as well as like 450 00:24:05,560 --> 00:24:08,760 Speaker 5: this machine that they built. Essentially, and Kyle correct me 451 00:24:08,800 --> 00:24:12,320 Speaker 5: if I'm getting this wrong, it's just like essentially like 452 00:24:12,359 --> 00:24:16,000 Speaker 5: a knockoff of an existing tunnel boring machine, or like 453 00:24:16,080 --> 00:24:19,760 Speaker 5: an improvement of an existing tunnel boring machine, which on 454 00:24:19,760 --> 00:24:22,359 Speaker 5: one hand, seems like a kind of a far cry 455 00:24:22,480 --> 00:24:26,239 Speaker 5: from the kind of you know, usual Musk playbook of 456 00:24:26,359 --> 00:24:30,359 Speaker 5: like where you know, inventing things from first principles. The 457 00:24:30,400 --> 00:24:32,240 Speaker 5: other thing is it's not very big. 458 00:24:32,400 --> 00:24:33,879 Speaker 3: I mean, like to make these. 459 00:24:33,800 --> 00:24:38,560 Speaker 5: Kind of like world changing tunnels that that Elon Musk 460 00:24:38,600 --> 00:24:41,000 Speaker 5: has talked about, you'd want to have like big tunnels 461 00:24:41,000 --> 00:24:43,239 Speaker 5: so you could have multiple cars going through and as 462 00:24:43,320 --> 00:24:45,880 Speaker 5: Kyle saying, like the tunnels that they've dug so far 463 00:24:46,200 --> 00:24:47,560 Speaker 5: are really narrow. 464 00:24:48,160 --> 00:24:51,240 Speaker 2: A cyber truck through. I would mean Kyle was impressed, 465 00:24:51,320 --> 00:24:52,760 Speaker 2: shocked to hear a cyber. 466 00:24:52,480 --> 00:24:55,520 Speaker 5: Truck could go through, because I've been in those tunnels 467 00:24:55,560 --> 00:24:57,879 Speaker 5: in the Vegas Loop and you could bare it feels 468 00:24:57,960 --> 00:25:00,119 Speaker 5: like you can barely fit, you know, a test the 469 00:25:00,240 --> 00:25:02,320 Speaker 5: model why through, Like there just isn't that much. 470 00:25:03,200 --> 00:25:06,240 Speaker 2: I mean Texas is you know, everything's Texas size. In Texas, 471 00:25:06,280 --> 00:25:06,679 Speaker 2: there are. 472 00:25:06,560 --> 00:25:09,760 Speaker 5: Especially strain tunnels that they've put you know, a road 473 00:25:09,840 --> 00:25:10,680 Speaker 5: in the middle of So. 474 00:25:10,880 --> 00:25:14,720 Speaker 2: Kyle tell us about the digging machine, the boring machine, the. 475 00:25:14,320 --> 00:25:18,400 Speaker 3: How do the proof Rock the prof Rock machine, Yes, 476 00:25:18,480 --> 00:25:20,720 Speaker 3: that is what it's. The subsecom models have been called 477 00:25:20,760 --> 00:25:22,960 Speaker 3: and they have numbers attached to them, and. 478 00:25:22,880 --> 00:25:24,040 Speaker 2: We're up to number five. 479 00:25:24,240 --> 00:25:29,800 Speaker 3: Now, correct five isn't testing six is in the build stage. 480 00:25:29,920 --> 00:25:32,600 Speaker 3: Is the latest information that I got. But when you're 481 00:25:32,600 --> 00:25:35,080 Speaker 3: looking through this, for example, proof Rock one was just 482 00:25:35,160 --> 00:25:38,800 Speaker 3: a test machine. Proof Rock two is in Vegas, although 483 00:25:38,800 --> 00:25:41,920 Speaker 3: there's question marks over whether it's still being used. Proof 484 00:25:42,000 --> 00:25:46,320 Speaker 3: Rock three is doing tunneling in Vegas. That's the principal machine. 485 00:25:46,600 --> 00:25:50,440 Speaker 3: Proof Rock four is drilling underneath in bass Drop between 486 00:25:50,640 --> 00:25:53,640 Speaker 3: SpaceX and X, and then five's in testing. So when 487 00:25:53,640 --> 00:25:56,000 Speaker 3: they announced that they could start right away in Nashville, 488 00:25:56,000 --> 00:25:59,040 Speaker 3: I literally counted up the machines. I'm like, wow, you 489 00:25:59,080 --> 00:26:02,720 Speaker 3: don't have any more proof rocks, you know, to pass around. 490 00:26:02,920 --> 00:26:06,719 Speaker 2: You're out of proof rocks, Maxim So, so Nashville is why, 491 00:26:06,880 --> 00:26:10,480 Speaker 2: of course Boring came up last week. They apparently have 492 00:26:10,920 --> 00:26:13,960 Speaker 2: we can say, have they outright wanted concession to start 493 00:26:14,080 --> 00:26:14,760 Speaker 2: digging tunnels. 494 00:26:14,960 --> 00:26:16,960 Speaker 5: I think it's more like there's a plan. It's a 495 00:26:17,040 --> 00:26:19,720 Speaker 5: plan than rather Okay, I think I think there's still 496 00:26:19,720 --> 00:26:20,280 Speaker 5: some approvals. 497 00:26:21,040 --> 00:26:24,040 Speaker 2: But Kyle, your peace sights that just like we just 498 00:26:24,080 --> 00:26:28,000 Speaker 2: saw in Nashville, they've gotten green lights from other places 499 00:26:28,040 --> 00:26:32,399 Speaker 2: as well in recent years, or some iteration of a 500 00:26:32,440 --> 00:26:38,040 Speaker 2: green light from authorities, but it hasn't actually resulted in digging. 501 00:26:38,400 --> 00:26:40,400 Speaker 3: Yeah, green light's not the best them. I'd say there's 502 00:26:40,400 --> 00:26:43,919 Speaker 3: been some flashy announcements of places across the country that 503 00:26:44,000 --> 00:26:46,640 Speaker 3: have somehow come to not Chicago was definitely a good 504 00:26:46,680 --> 00:26:49,720 Speaker 3: case in point for that. It feels as if Boring 505 00:26:49,840 --> 00:26:52,480 Speaker 3: come in and say we can build something quick, we 506 00:26:52,600 --> 00:26:55,040 Speaker 3: can build it without you spending a penny and it's 507 00:26:55,040 --> 00:26:57,200 Speaker 3: going to make your life so much better now, which 508 00:26:57,240 --> 00:27:00,120 Speaker 3: public authority anywhere in the world is not going to 509 00:27:00,160 --> 00:27:02,879 Speaker 3: say yes to that. The problem is when you start 510 00:27:02,880 --> 00:27:05,720 Speaker 3: digging in, excuse the pun, to a lot of what 511 00:27:05,800 --> 00:27:10,400 Speaker 3: Boring is proposing. They're terrible at paperwork, they can't meet 512 00:27:10,520 --> 00:27:13,520 Speaker 3: basic bidding criteria. They don't seem in a lot of 513 00:27:13,560 --> 00:27:16,680 Speaker 3: cases to have an understanding of international property law. 514 00:27:16,760 --> 00:27:18,800 Speaker 2: Yeah, yeah, Kyle tinterrupt for a second. You have a 515 00:27:18,800 --> 00:27:23,320 Speaker 2: great anecdote in the story about a disastrous meeting or 516 00:27:23,400 --> 00:27:26,880 Speaker 2: series of meetings they held with officials to Port Authority 517 00:27:26,920 --> 00:27:28,679 Speaker 2: of New York. Tell us a little bit about that. 518 00:27:29,760 --> 00:27:33,000 Speaker 3: Well, they still talk about it, people who weren't there 519 00:27:32,480 --> 00:27:35,439 Speaker 3: when Boring were doing this, but like, oh yeah, New 520 00:27:35,520 --> 00:27:38,399 Speaker 3: York already hurts, you know. Apparently Cuomo set it up, 521 00:27:38,520 --> 00:27:40,800 Speaker 3: was friendly with Musk at the time. Officials went into 522 00:27:40,840 --> 00:27:45,040 Speaker 3: the room. They wanted to do this incredibly ambitious project 523 00:27:45,080 --> 00:27:48,159 Speaker 3: between the city and you know, eventually connecting both the airports, 524 00:27:48,640 --> 00:27:51,719 Speaker 3: and within fifteen minutes, the guys of the Porthorio We're 525 00:27:51,720 --> 00:27:53,720 Speaker 3: looking at you like these guys don't have a clue, 526 00:27:54,080 --> 00:27:56,720 Speaker 3: you know, couldn't tell you the basics of, you know, 527 00:27:56,960 --> 00:27:58,840 Speaker 3: how we were going to make this safe from a 528 00:27:58,840 --> 00:28:02,320 Speaker 3: fire perspective, how we were going to make it ADA compliance, 529 00:28:02,440 --> 00:28:05,320 Speaker 3: you know, for those with disabilities, what the actual process 530 00:28:05,320 --> 00:28:07,919 Speaker 3: of buying land in the city looks like. You know, 531 00:28:08,000 --> 00:28:11,920 Speaker 3: So everyone just sort of nodded and smiled. I'm sure 532 00:28:12,000 --> 00:28:13,560 Speaker 3: if there is no tunnel in New York. 533 00:28:14,000 --> 00:28:18,560 Speaker 5: There's an interesting contrast here with SpaceX because, like Elon Musk, 534 00:28:18,760 --> 00:28:21,520 Speaker 5: as he described it actually to me back in twenty seventeen, 535 00:28:22,119 --> 00:28:25,560 Speaker 5: why he was thinking this made sense. He saw this 536 00:28:25,600 --> 00:28:30,760 Speaker 5: as not that different from SpaceX, right. SpaceX took, you know, 537 00:28:30,840 --> 00:28:34,879 Speaker 5: sort of basically existing technology, bunch of rockets that had 538 00:28:34,880 --> 00:28:39,120 Speaker 5: been developed largely by the US government, and improving on them, 539 00:28:39,200 --> 00:28:43,480 Speaker 5: making them more efficient, more reliable, and then in doing so, 540 00:28:44,520 --> 00:28:49,160 Speaker 5: revolutionizing the practice of contracting for rocket launching. He's largely 541 00:28:49,200 --> 00:28:51,040 Speaker 5: done that, and he's done that, And so the idea 542 00:28:51,240 --> 00:28:54,440 Speaker 5: was why, like it would sort of make sense with boring, 543 00:28:54,480 --> 00:28:57,720 Speaker 5: because you have big, heavy machinery, you have made unarguably 544 00:28:57,760 --> 00:29:00,760 Speaker 5: like broken contracting process. Now, I think you could argue 545 00:29:00,800 --> 00:29:02,840 Speaker 5: it was that the contracting process of something else, But 546 00:29:02,880 --> 00:29:06,440 Speaker 5: in any case, you have these famous examples of cities 547 00:29:06,600 --> 00:29:09,480 Speaker 5: and governments spending huge sums of money to not dig 548 00:29:09,600 --> 00:29:12,680 Speaker 5: very far, and so you could kind of see where 549 00:29:12,720 --> 00:29:14,560 Speaker 5: he was thinking. And I think the difference is and 550 00:29:14,600 --> 00:29:17,240 Speaker 5: you see it in that Port Authority example, there was 551 00:29:17,280 --> 00:29:20,360 Speaker 5: a partner, a government partner for SpaceX who was like 552 00:29:20,400 --> 00:29:23,360 Speaker 5: a willing participant who was saying, yes, we want this, 553 00:29:23,680 --> 00:29:26,720 Speaker 5: we want you Elon Musk, to try to figure this out, 554 00:29:26,720 --> 00:29:28,800 Speaker 5: and that was NASA. NASA was paying him in the 555 00:29:28,840 --> 00:29:31,480 Speaker 5: early days of the company hundreds of millions and eventually 556 00:29:31,520 --> 00:29:34,640 Speaker 5: billions of dollars to develop this, and there is no 557 00:29:34,760 --> 00:29:38,120 Speaker 5: equivalent partner for the boring company, right. They just sort 558 00:29:38,120 --> 00:29:41,440 Speaker 5: of bounced between cities and governments and these kind of 559 00:29:41,520 --> 00:29:44,680 Speaker 5: interstate authorities like the Port Authority, and no one is saying, hey, 560 00:29:45,000 --> 00:29:47,840 Speaker 5: let's invest hundreds of millions of dollars to help you 561 00:29:47,880 --> 00:29:50,880 Speaker 5: figure this out. And what's instead happening is Elon Musk 562 00:29:50,920 --> 00:29:54,400 Speaker 5: is competing as a normal construction contractor, and it looks 563 00:29:54,440 --> 00:29:58,080 Speaker 5: like competing kind of poorly, not necessarily doing a good job, 564 00:29:58,120 --> 00:30:00,600 Speaker 5: and it seems to be only able to sort of 565 00:30:00,600 --> 00:30:03,120 Speaker 5: get projects where he's dealing with these kind of very 566 00:30:03,160 --> 00:30:08,480 Speaker 5: small projects unusual sort of private public partnerships. The Vegas 567 00:30:08,560 --> 00:30:11,400 Speaker 5: one is paid for by the Las Vegas Convention Center Authority, 568 00:30:11,600 --> 00:30:13,600 Speaker 5: which is a private end So anyway, so I just 569 00:30:13,640 --> 00:30:17,240 Speaker 5: think there isn't this like big government partner for the 570 00:30:17,240 --> 00:30:19,719 Speaker 5: Boring company. That's the thing they've lacked all along. And 571 00:30:19,760 --> 00:30:22,760 Speaker 5: I think obviously Elon Musk doesn't and we've seen it 572 00:30:22,760 --> 00:30:24,880 Speaker 5: from his statements over the past few years. 573 00:30:25,080 --> 00:30:26,640 Speaker 3: He's not going out and looking for one of those. 574 00:30:26,640 --> 00:30:27,880 Speaker 3: He doesn't seem to value that. 575 00:30:28,040 --> 00:30:31,440 Speaker 5: Even though it made a huge difference in the beginning 576 00:30:31,440 --> 00:30:32,040 Speaker 5: of SpaceX. 577 00:30:32,120 --> 00:30:34,880 Speaker 2: Yeah, I just don't know that digging tunnels interest him, 578 00:30:35,760 --> 00:30:39,920 Speaker 2: you know, captures his attention quite the way that sending 579 00:30:40,360 --> 00:30:43,600 Speaker 2: big efing rockets up into space does. Kyle, I sort 580 00:30:43,600 --> 00:30:45,520 Speaker 2: of buried the lead on us here. We are going 581 00:30:45,600 --> 00:30:50,400 Speaker 2: to wrap up with the valuation drop, the decline, and 582 00:30:50,440 --> 00:30:53,920 Speaker 2: the valuation of Boring as you have it. From one estimate, 583 00:30:54,440 --> 00:30:58,520 Speaker 2: it looks like it went from somewhere over eight billion dollars, which, 584 00:30:58,560 --> 00:31:00,600 Speaker 2: by the way, max for a joke, eight billion dollar 585 00:31:00,720 --> 00:31:04,320 Speaker 2: jokes pretty good to now somewhere in the mid sixes 586 00:31:04,640 --> 00:31:07,160 Speaker 2: at a time when most of the other you know, 587 00:31:07,520 --> 00:31:11,000 Speaker 2: things at orbit around Tesla I have been soaring. Boring 588 00:31:11,120 --> 00:31:13,800 Speaker 2: is sinking, I guess just a sign that this thing 589 00:31:13,920 --> 00:31:16,440 Speaker 2: is just kind of sort of going nowhere. 590 00:31:17,120 --> 00:31:19,840 Speaker 3: Yeah, there's no buzz around it, there's no projects around it. 591 00:31:19,960 --> 00:31:22,280 Speaker 3: And you were getting on for a decade. Now when 592 00:31:22,520 --> 00:31:24,920 Speaker 3: you know, they were supposed to have sixty eight miles 593 00:31:25,120 --> 00:31:26,760 Speaker 3: duck in Vegas. It was supposed to be this huge, 594 00:31:26,760 --> 00:31:30,720 Speaker 3: interconnected lattice and instead you've got less than four operational miles. 595 00:31:31,160 --> 00:31:33,120 Speaker 3: It doesn't take a genius to look at that and go, 596 00:31:33,760 --> 00:31:34,840 Speaker 3: why am I investing in this? 597 00:31:35,560 --> 00:31:39,000 Speaker 2: Right? And I suppose if the man Atoptic Company weren't 598 00:31:39,040 --> 00:31:43,240 Speaker 2: named Elon Musk, that six billion dollar valuation would even 599 00:31:43,280 --> 00:31:44,120 Speaker 2: be a lot less. 600 00:31:44,720 --> 00:31:46,640 Speaker 3: I think that's very safe to say. There's a lot 601 00:31:46,640 --> 00:31:49,480 Speaker 3: of companies that tried to reinvent tunneling over the years, 602 00:31:49,480 --> 00:31:50,560 Speaker 3: and none of them lasted. 603 00:31:51,040 --> 00:31:55,160 Speaker 2: Okay, Kyle, well we appreciate it. Great story. By the way, everyone, 604 00:31:55,280 --> 00:31:57,600 Speaker 2: you go out and read it. It's called Elon Musk's 605 00:31:57,680 --> 00:32:00,240 Speaker 2: boring company is turning into a nine high and drew 606 00:32:00,280 --> 00:32:02,760 Speaker 2: million dollar flop, which, by the way, gives us yet 607 00:32:02,800 --> 00:32:07,240 Speaker 2: another figure to highlight on this week's pod. Thanks again, Kyle, 608 00:32:07,600 --> 00:32:18,720 Speaker 2: Thank you guys. This episode was produced by Stacy Wong 609 00:32:18,800 --> 00:32:22,840 Speaker 2: and edited by Anamasirakus. Blake Maples handles engineering, and Dave 610 00:32:22,880 --> 00:32:27,320 Speaker 2: Purcell fact checks. Our supervising producer is Magnus Henrikson. The 611 00:32:27,360 --> 00:32:30,680 Speaker 2: elon Ing theme is written and performed by take Yasuzawa 612 00:32:30,760 --> 00:32:34,800 Speaker 2: and Alex Sugiira. Sage Bauman is the head of Bloomberg Podcasts. 613 00:32:35,120 --> 00:32:38,200 Speaker 2: A big thanks as always to our supporters Joe Weber 614 00:32:38,240 --> 00:32:42,160 Speaker 2: and Brad Stone. I'm David Papadoppolis. If you have a minute, 615 00:32:42,280 --> 00:32:45,240 Speaker 2: rate and review our show, it'll help other listeners find us. 616 00:32:45,560 --> 00:32:46,400 Speaker 2: See you next week.