Speaker 1: Elon Muskee is on most days, the richest person on Earth.
Speaker 1: He's the co founder and or head of no fewer
Speaker 1: than six companies Tesla, SpaceX, Boring, neurlink X, and Xai.
Speaker 1: Of course, he also co founded PayPal. He employs more
Speaker 1: than one hundred thousand people working on technologies that impact
Speaker 1: our day to day lives and could usher in our future.
Speaker 1: His influence, whether it's in space, social media, the automotive industry,
Speaker 1: or increasingly in geopolitics, is vast. Every day Elon is
Speaker 1: making headlines, and so it can be hard to keep
Speaker 1: up with the onslaught to help you figure out what matters,
Speaker 1: we have assembled a panel of Bloomberg experts on all
Speaker 1: things Elon to discuss and sometimes to argue about what
Speaker 1: he's doing in the world.
Speaker 2: Well, Elon Musk is now the richest person on the planet.
Speaker 1: More than half the satellites in space are owned and
Speaker 1: controlled by one man.
Speaker 2: Starting his own artificial intelligence company.
Speaker 3: Well, he's a legitimate super gene.
Speaker 4: Legitimate.
Speaker 2: He says.
Speaker 1: He's always voted for Democrats, but this year it will
Speaker 1: be different.
Speaker 3: He'll vote Republican.
Speaker 5: There is a reason the US government is so reliant
Speaker 5: on him.
Speaker 3: Alon Musk is a scam artist and he's done nothing.
Speaker 2: Anything he does, he's fascinating the people.
Speaker 1: Hello and welcome to the inaugural episode of Elon Inc.
Speaker 1: My name is David Papadopoulos. This is a brand new
Speaker 1: weekly podcast that will dissect the biggest stories about one
Speaker 1: of the world's most powerful and polarizing men. This week,
Speaker 1: we'll start with AI. In the last few days, Musk
Speaker 1: sat down with UK Prime Minister Rishi Sunak to discuss
Speaker 1: the opportunities and risks AI brings, and he rolled out
Speaker 1: GROC his answer to AI Internet sensation chat GBT. Meanwhile,
Speaker 1: other pieces of his empire are demanding his attention. As
Speaker 1: is the usual, the United Auto Workers union president set
Speaker 1: his sits on Tesla just days after scoring an historic
Speaker 1: payhike for workers in Detroit. The billionaire could face his
Speaker 1: most serious labor fight yet. To discuss this and more,
Speaker 1: we brought in Sarah Fryar, who oversees our coverage of
Speaker 1: the biggest companies in Silicon Valley. Hello, Hello, Sarah. Dana Hall,
Speaker 1: who began covering Tesla for us when the stock was
Speaker 1: worth less than one tenth of what it is today. Dana,
Speaker 1: good morning, and Max Chafkin, reporter, editor and troublemaker at
Speaker 1: Bloomberg Business Week. Hey, Hey, so we're going to start
Speaker 1: indeed with XAI, and we're going to start with.
Speaker 2: You, Sarah.
Speaker 1: What does GROC do and Visa VI all the rivals
Speaker 1: in the market today, how does it stack up any idea?
Speaker 6: Well, first of all, first thing you need to know
Speaker 6: about GROC is none of the media has had an
Speaker 6: opportunity to test this thing. It is yet another chat
Speaker 6: bot in the mix, much like chat Gibt or Bart
Speaker 6: or any of the others. And this top selling point
Speaker 6: is that it is it is supposed to be snarky, irreverent, funny.
Speaker 6: Elon Musk posted on x formerly known as Twitter where
Speaker 6: he asked the chatbot how to make cocaine and he
Speaker 6: responded with, you know, a joking set of instruction.
Speaker 1: It was a good answer though.
Speaker 6: It was a good answer, So that's kind of the vibe.
Speaker 6: And I think it's important to know that this is
Speaker 6: deeply integrated with x the social media platform, but it
Speaker 6: is not part of x It is a separate company, XAI,
Speaker 6: and this partnership provides the top selling point for this chatbot,
Speaker 6: which is that it will be trained on real time
Speaker 6: Twitter data sorry X data.
Speaker 1: Yeah, so yeah, they they You know, I heard Musk
Speaker 1: spinning that as something that really will separate it from rivals, is.
Speaker 6: That it will absolutely separate it from rivals to have
Speaker 6: that real time information. However, that is also the scary
Speaker 6: thing because as we know, X can be accessible sometimes.
Speaker 1: You know, Max. One of the things that jumps out
Speaker 1: at me a little bit is when you look at
Speaker 1: the stock market in twenty twenty three and what's're driving
Speaker 1: all the gains in the stock market, It has largely
Speaker 1: largely been AI. Right by one crewde measurement, AI has
Speaker 1: added twenty percentage points to the Nasdaq's rally this year.
Speaker 1: Seen another way, you take Microsoft in the video two
Speaker 1: leaders in AI or the two leaders in A, and
Speaker 1: they've contributed more to the gains in the S and
Speaker 1: P five hundred than any other stock by orders of magnitude.
Speaker 1: So I'm wondering, is he rushing grocout now, perhaps before
Speaker 1: it's ready to try to tap into this storyline?
Speaker 2: Obviously, Yes, he is obviously rushing grocout before it's ready.
Speaker 2: The press release slash website that they put up notes
Speaker 2: that they've only had something like two months of work
Speaker 2: on this thing. They've they've they just started this company
Speaker 2: really in the past few months. The website lists a
Speaker 2: lot of like very detailed technical information about grock. It
Speaker 2: claims that there's certain certain benchmarks it's sort of holding
Speaker 2: up well against, like the Facebook version of chat GPT,
Speaker 2: but maybe a little behind GPT four, which is like
Speaker 2: the most up to date version of the best one
Speaker 2: of these models. The port of thing to keep in
Speaker 2: mind is like this as until people start actually using this,
Speaker 2: I think it's worth like thinking about this as vaporware
Speaker 2: or not even taking it seriously as a real product.
Speaker 6: The one tangible outcome of grock right now is that
Speaker 6: it is the reason the only reason to buy X
Speaker 6: Premium Plus, because it is only available through X Premium Plus.
Speaker 6: So as a little background, there are some some tiers of.
Speaker 2: Subscription for X, which is a new thing.
Speaker 6: Which is a new thing this just started. It used
Speaker 6: to just be that there was a one premium tier,
Speaker 6: but now there are three. In the top tier gives
Speaker 6: you access to this chatbot when it comes out of beta.
Speaker 6: We don't know when that will happen, but that is
Speaker 6: that is one reason people are spending sixteen dollars a month,
Speaker 6: or you know, if you're buying from the app.
Speaker 1: So serah, fright, is this going to be the thing?
Speaker 1: Is this a silver bullet for X? X has been
Speaker 1: obviously struggling. It's a well known story from the moment
Speaker 1: that that Musk purchased it a year ago. Does this
Speaker 1: help X?
Speaker 6: I mean every little bit helps that they're so desperate
Speaker 6: they're trying to like sell user names for money for
Speaker 6: like a few tons of thousands of dollars. I think
Speaker 6: you know this is this is a company that has
Speaker 6: lost more than sixty percent of its advertiser revenue. They
Speaker 6: have had a drop in users. They're struggling, they have
Speaker 6: mountains of debt to repay to banks, and this is
Speaker 6: a way to give people something tangible to buy.
Speaker 1: So, Dana, he's got Xai, an ai company, and it's
Speaker 1: and and it's very interrelated with X. But then of
Speaker 1: course he's got Tesla, where he's got a whole nother
Speaker 1: artificial intelligence thing going on, and that is truly like
Speaker 1: the crown jewel of his artificial intelligence.
Speaker 3: Right right, And to Max's point, he's always trying to
Speaker 3: position Tesla as being at the vanguard of what's next. So,
Speaker 3: back in twenty twenty one, on an earnings call, Musk said,
Speaker 3: and this is a direct quote, I think long term
Speaker 3: people will think of Tesla as much as an AI
Speaker 3: and robotics company as we are a car company or
Speaker 3: an energy company. And so you know, he's part like
Speaker 3: Tesla's part of the Magnificent seven because they're using AI
Speaker 3: and nermalness.
Speaker 1: Are we gonna We're gonna use a magnificent seven term?
Speaker 2: What is that? It's a bloomberg.
Speaker 1: It's the seven most magnificent stocks in the world.
Speaker 3: Oh, I thought that was like a finance thing that
Speaker 3: everyone knew. It's like, it's like the top seven companies
Speaker 3: in the It's like the Nvidia, it's like the AI company.
Speaker 1: By the way, it's four here, a magnificent four. Yeah,
Speaker 1: but in any of it. Right, So he's positioning it
Speaker 1: as it's not just right, it certainly not just about
Speaker 1: the hardware and the but we are an AI company.
Speaker 3: Well, right, so electric vehicles are becoming mainstream, how does
Speaker 3: Tesla differentiate itself. Well, we don't just make electric cars.
Speaker 3: We make electric cars that can drive themselves. Not really
Speaker 3: like they've never actually accomplished that, but they are using
Speaker 3: AI to train the cars to try to try to
Speaker 3: drive themselves. And so that's like a big promise of
Speaker 3: Tesla's valuation right now is that they're not just a
Speaker 3: car company, They're an AI company. And that's the drum
Speaker 3: that Elon has been beating for years now.
Speaker 1: Mentioned at the beginning that when you first started covering Tesla,
Speaker 1: it was worth a tiny fraction of what it is today. Indeed,
Speaker 1: a lot of that great valuation. I don't know the
Speaker 1: exact number off the top of my head, but I
Speaker 1: think it's worth something around eight hundred billion dollars. A
Speaker 1: lot of that is that whole AI play that value, right,
Speaker 1: that's sense that down the road AI and what it
Speaker 1: does in terms of autonomous driving and all that is
Speaker 1: going to make this company hoodles and noodles and money.
Speaker 3: Yeah, and they're using the same system to train optimists
Speaker 3: the robot, which is the robot that is eventually going
Speaker 3: to replace the factory workers. But I think, you know,
Speaker 3: back to the point of X dot AI, like max,
Speaker 3: is it even a real company? Like do we even
Speaker 3: know how many people work at this?
Speaker 2: I mean, okay, he does silly stuff. He makes a
Speaker 2: fool of himself, very easy to make fun of him
Speaker 2: for the stuff he tweets or posts or whatever. That said,
Speaker 2: the guy has a lot of respect from scientists and engineers,
Speaker 2: and there are real AI engineers who have who have
Speaker 2: signed up to work at this thing. That said, what
Speaker 2: David described and what Sarah was describing earlier about the
Speaker 2: company does not make like a ton of sense. So
Speaker 2: large language models depend on like truth. And that's why,
Speaker 2: like open AI when it was like figuring out how
Speaker 2: to build its model, it's scanning books, Encyclopa, Wikipedia, stuff
Speaker 2: that has a lot of eyeballs on it and is
Speaker 2: like known to be true. Because large language models, even
Speaker 2: when they're based on stuff that's true, make stuff up Twitter.
Speaker 2: If anybody's been using x over the past few months,
Speaker 2: you know, during the you know, conflict in Israel, during
Speaker 2: the war in Ukraine and so on, it's it's full
Speaker 2: of crap. It's full of stuff that is false or
Speaker 2: made up or exaggerated or whatever, and it's gotten worse
Speaker 2: and worse. It's not the kind of thing you want
Speaker 2: to build a model on. The second thing is these
Speaker 2: open AI and so on, they cannot do current information.
Speaker 2: The reason they can't do current information is because you
Speaker 2: can't retrain your model constantly. It costs a huge amount
Speaker 2: of money to retrain these models. So the ambition to
Speaker 2: make this this groc or gronk or whatever, it's going
Speaker 2: to be grock to make it like up to date
Speaker 2: with tweets and stuff. If that were to come to pass,
Speaker 2: it would cost a fortune. It would cost even more.
Speaker 2: Open AI, the best of these companies is losing huge
Speaker 2: sums of money. If Elon Musk is able to do this,
Speaker 2: it will be very, very expensive. You know, it might
Speaker 2: actually draw people to X super plus premium or whatever
Speaker 2: whatever this like high end version is ex premium plus.
Speaker 2: Is that it? But it's gonna cost way more than
Speaker 2: twenty two dollars a month.
Speaker 1: But it is a thought there that you're losing money now,
Speaker 1: but you're you know, volume, and you're scaling, and that
Speaker 1: down the road.
Speaker 2: Races are going to come up in theory, right people,
Speaker 2: Microsoft and these big companies are able to extract value
Speaker 2: of it.
Speaker 6: But has losing money ever been something that Musk worries
Speaker 6: about when he's building something new? I mean, I this
Speaker 6: this you can also I always think, you know, with
Speaker 6: must we have to think about as his psychology, there's
Speaker 6: a lot of history here. He was the the person
Speaker 6: who started open ai alongside Sam Altman, back when it
Speaker 6: was supposedly a nonprofit. He gave tens of millions of
Speaker 6: dollars to the cause. He was quite concerned or something.
Speaker 6: Isn't he the artificial general.
Speaker 1: Right in general, Sarah. Isn't he been one of the
Speaker 1: biggest voices out there saying warning of the of the
Speaker 1: dangers of.
Speaker 6: About to say He's talked to world leaders about that recently.
Speaker 6: You know, he he's concerned about AI, you know, replacing
Speaker 6: human consciousness. He he is on a mission to preserve
Speaker 6: human consciousness. That's that's maybe the reason he backed into
Speaker 6: for why he bought Twitter. Whether or not that was
Speaker 6: that's something he came up with after the fact, I
Speaker 6: don't know. But but there's a there's a lot of
Speaker 6: a lot of existing tension between him and Sam Altman,
Speaker 6: who's now the leader of open AI. Open Ai just
Speaker 6: had its demo day, like a couple of days after
Speaker 6: Musk released Rock. So I think there's some some competitive
Speaker 6: landscape that we're playing.
Speaker 3: Oh, Elon is totally competitive, he'd like and he's got
Speaker 3: to be. He's got to be. He's got to be
Speaker 3: in the arena, you know, like it's not enough to
Speaker 3: do cars and rockets. If AI is the hot new thing,
Speaker 3: he's got to be in there. And if there's like
Speaker 3: personal history, he's going to go for the jugular. And
Speaker 3: they've been training barbs.
Speaker 2: Yeah. And to answer your question, like, it's the same
Speaker 2: as with autopilot, right the Tesla. Tesla's full self driving
Speaker 2: capabilities do not The Tesla does not drive itself without
Speaker 2: a human yet. But the plan, obviously, if you're a
Speaker 2: bull and you really believe in the stock, is that
Speaker 2: you know, in the long run, this company is going
Speaker 2: to replace essentially all of transportation. We're all gonna, you know,
Speaker 2: have robotic Tesla's driving us around. It's going to completely
Speaker 2: reimagine the world. Same thing here, right, like Elon Musk's
Speaker 2: stated goal, and to some extent, I think the goal
Speaker 2: of the venture capitalists and so on who are backing
Speaker 2: similar companies is artificial general intelligence, Like we can we'll
Speaker 2: have software that you know, can solve any problem for us.
Speaker 2: I think there are really good reasons to be skeptical
Speaker 2: both of you know, the immediate prospects of artificial general intelligence,
Speaker 2: even the long term ones as well, as the prospects
Speaker 2: of like full self driving, like both of these things closer.
Speaker 6: Than they're warning us about the future of AI, and
Speaker 6: Musk was among the leaders that call for a pause
Speaker 6: and development for ethical reasons. Are also the ones that
Speaker 6: are saying, hey, trust me.
Speaker 1: So sir, he it was just six months ago that
Speaker 1: he called for that pause, and then he launches this.
Speaker 1: But I guess what is his argument, Well, I called
Speaker 1: for a pause, No one listened to the pause, so
Speaker 1: the hell with it?
Speaker 3: Will Wall Well, just like signed a letter, Like he
Speaker 3: just was a signatory on a letter about a pause
Speaker 3: while he was building his own company, Like give me
Speaker 3: a break.
Speaker 2: I mean, also the pause stuff, I think it's worth
Speaker 2: like taking all that with some skepticism just because like
Speaker 2: it's amazing marketing. Like I think this is true with Elon,
Speaker 2: this is true with Sam Altman's true with all these guys.
Speaker 2: If you're like, you're like, this technology is so dangerous
Speaker 2: it could eventually like take over the world, and you
Speaker 2: can have it for yourself for only twenty two dollars
Speaker 2: a month, it's a really powerful enticement if you're trying
Speaker 2: to sign people up for a technology where the use
Speaker 2: cases are not totally clear, Like beyond making funny posts
Speaker 2: on social media, it also makes.
Speaker 6: It seem inevitable, right, and all these ethical concerns, misinformation concerns,
Speaker 6: things that are wrapped into aire are just you know,
Speaker 6: going to happen no matter what, and they're everyone's problem
Speaker 6: and that takes accountability away from the people who are
Speaker 6: building in so Sarah.
Speaker 1: So he also recently sat down with Rishi Suak, the
Speaker 1: Prime Minister of the UK, to discuss AI. How did
Speaker 1: that conversation go? What did did we learn anything new
Speaker 1: from this from this long sit down.
Speaker 5: With Well, it was great for Elon. I think. I
Speaker 5: think Sunek.
Speaker 6: Was was quite excited for the opportunity, as some people
Speaker 6: are when they're in Elon's orbit. I think you got
Speaker 6: to keep them close and and you never know when.
Speaker 6: The fun thing about Elon Musk is he's involved in geopolitics,
Speaker 6: He's involved in in every industry and so love him
Speaker 6: or hate him, you got to be friends with him
Speaker 6: in some respects. I thought it was really interesting he
Speaker 6: who knows what he truly believes here, but he said
Speaker 6: that that eventually jobs won't be necessary.
Speaker 4: Will come a point where no job is needed.
Speaker 6: You can have a job if you want to have
Speaker 6: a job for sort of personal satisfaction. But the AI
Speaker 6: will be able to do everything, we won't have jobs.
Speaker 6: He praised Sunak for involving China in the in the
Speaker 6: AI Future conference, said that, you know, we need to
Speaker 6: be thinking about their role here too. But yeah, I
Speaker 6: think I think, you know, he's been doing this sort
Speaker 6: of world tour. I think that he wishes.
Speaker 1: But he recently met with Israel, Israel's Prime Minister BB yeah.
Speaker 6: Before the conflicts, met with from Turkey. It's a long
Speaker 6: long He was part of the panel, the Schumer AI panel,
Speaker 6: and and I think, I think honestly he wishes he
Speaker 6: had the same reverence from Joe Biden. I think that
Speaker 6: that is. That is one takeaway that I heard from
Speaker 6: a lot of the Elon fans like oh Man, I wish,
Speaker 6: I wish Joe Biden looked at Elon musks the way.
Speaker 1: All right, So so before we before we talk unions
Speaker 1: and cars in a second, I want one last question
Speaker 1: on this, which is for you Max. So the Labor
Speaker 1: Party in England hasn't has indeed been on Rishi Sunac's
Speaker 1: case for saying how that he was so diffusive in
Speaker 1: his praise and excited to be there. It seemed like
Speaker 1: he was angling for his next job post Primier Prime
Speaker 1: Prime ministership. So I guess it would basically like keep
Speaker 1: trying to be pulling a Yacharino as it were, right
Speaker 1: where you were, Linda Yacharina, where you interview Musk en
Speaker 1: route to landing.
Speaker 5: He's the CEO of x Ovax now after.
Speaker 1: She had interviewed Musk on stage a few months back.
Speaker 1: So if he pulls this off, Max, what job does
Speaker 1: Elon Musk give Rihi?
Speaker 2: Well, first of all, he should call Linda Yakarino before
Speaker 2: he you know, follows through with this plan, because like
Speaker 2: I know, officially, Linda Yacharino is really excited about sports
Speaker 2: on Twitter and is really excited about everything about x
Speaker 2: and everything.
Speaker 5: But there is a job he loves everything.
Speaker 2: This is not a good job. And and so Rishi,
Speaker 2: if you're listening, uh, just I want you to think
Speaker 2: about it carefully. That said, I think the boring company, Uh,
Speaker 2: you know, Elon Musk is not gonna You're not gonna.
Speaker 2: You're not talking one of the primo jobs. I'd say
Speaker 2: in that Elon vers you're talking about sort of a
Speaker 2: lower level drop. Then again, he was a chief executive,
Speaker 2: so I think a CEO route role would be, uh,
Speaker 2: would be appropriate. So I'm going boring, but also tunnels
Speaker 2: infrastructure kind of kind of in line with for someone
Speaker 2: who has a tunnel, right, Yeah, there's a tunnel.
Speaker 1: A channel, A very nice I like that. I think
Speaker 1: that's a good call. That's that's one to watch. We
Speaker 1: will we will keep an eye on on that going forward.
Speaker 1: Welcome back, Okay, So Dana on the home front, Musk
Speaker 1: has an issue looming on the horizon, which is uh,
Speaker 1: the fact that Sean Fain, the leader of the u
Speaker 1: a W the United Auto Workers, has targeted Tesla and
Speaker 1: said he's coming for Tesla. After scoring historic gains wage
Speaker 1: games for auto workers at four General Motors and Stilantis,
Speaker 1: he says he's coming for Tesla. Here's Fain in his
Speaker 1: own way.
Speaker 4: For weeks, we've seen an army of analysts and pundits
Speaker 4: crying that our union was going too far, that we
Speaker 4: were demanding too much. They said they weren't sure if
Speaker 4: we would ever get a deal, and then we got
Speaker 4: all three.
Speaker 1: So, Dana, who exactly is Sean Fain? What does he
Speaker 1: represent and does he stand a chance at actually organizing
Speaker 1: labor at Tesla, something that has failed time and again
Speaker 1: in the past.
Speaker 3: So Sean Faine is the new face of the United
Speaker 3: Auto Workers. He's this kind of like militant, you know,
Speaker 3: and I don't say that in a disparaging way, but
Speaker 3: like he's this like new militant head of the UAW.
Speaker 3: He just won this historic victory in Detroit after six weeks,
Speaker 3: and now he's going to try to organize everywhere. And
Speaker 3: there are a lot of auto plants in the United
Speaker 3: States that are not union. It's not just Tesla, it's
Speaker 3: like everywhere in the South, Like you know, Volkswagen, Toyota,
Speaker 3: and Nissan, they all have these plants that are not unionized.
Speaker 3: And I think the UAW just has to be really strategic.
Speaker 3: They just won this huge victory in Detroit. Where are
Speaker 3: they gonna where are they going to organize next? And
Speaker 3: of course they're going to say we're organizing at TESLA.
Speaker 3: I mean, they're going to organize everywhere. But I think
Speaker 3: what will be interesting to watch is where do they
Speaker 3: actually put in their resources to develop a real campaign.
Speaker 3: I think that they would have a much easier time
Speaker 3: trying to organize a plant where they where they had
Speaker 3: like at least gotten to a vote before. At Tesla,
Speaker 3: they've never even gotten to a vote.
Speaker 2: So what would some.
Speaker 1: Of those plants be where they've had votes some of
Speaker 1: them and some of the plants in the South.
Speaker 3: Yeah, plants in the South, like like I mean Volkswagons
Speaker 3: Plant and Chattanooga, Tennessee comes to mind. So, like organizing
Speaker 3: a campaign, it's like a long process. You need to
Speaker 3: get like multiple workers on multiple shifts to all be
Speaker 3: pro union, and they don't have that at Tesla right now.
Speaker 3: Like we reported a couple of days ago that there's
Speaker 3: an organizing committee at Tesla. Okay, that's great, but like
Speaker 3: in order to have like a union, you need, like
Speaker 3: I mean Tesla the Fremont plant employees twenty thousand people,
Speaker 3: You need like thousands of people to be very pro
Speaker 3: union in order to ever get the momentum to get
Speaker 3: to a vote. Like when they tried last time in
Speaker 3: twenty eighteen, it was like it was like a handful
Speaker 3: of people, like it never progressed, it like fizzled out,
Speaker 3: never got to a vote.
Speaker 1: Yeah, so tell me this. So when Elon has pushed
Speaker 1: back and he's pushed back hard on unions and he's
Speaker 1: been successful in the vast bulk of his plans. What
Speaker 1: is his argument, What does he say I am able
Speaker 1: to do for these workers that they can't get from
Speaker 1: a union.
Speaker 3: So Elon's biggest argument, and I think it's a very
Speaker 3: powerful one, is equity. Like everyone who works at Tesla
Speaker 3: gets equity in the company stock stock. The executives get
Speaker 3: stock options, the regular employees get RSUs, which are restricted
Speaker 3: stock units that vest typically over a four year period,
Speaker 3: and then every employee can also buy stock at a
Speaker 3: discount fifteen percent discount through the Employee Stock person plan.
Speaker 3: That is a powerful lever and a lot of people,
Speaker 3: frankly see the UAW as being corrupt and out of
Speaker 3: touch with what they want. And I mean there's some
Speaker 3: legitimacy to that, Like the former UAW president went to
Speaker 3: prison for embezzling union funds, and like Elon will bring
Speaker 3: that up time and time again. And so I just
Speaker 3: think Sean Fain is going to face an uphill battle
Speaker 3: trying to organize Tesla. They will certainly try, but there
Speaker 3: are a lot of non union plants in the United States.
Speaker 4: Max.
Speaker 1: This is a very different moment for labor than it
Speaker 1: was back in twenty eighteen in some of those previous episodes,
Speaker 1: I mean to be clear, coming out of the pandemic,
Speaker 1: and history actually shows the long arc of history dating
Speaker 1: back century shows labor has a tendency to rise up
Speaker 1: after pandemics. This has always been the case, and so
Speaker 1: it's just an interesting time. Yeah, perhaps it won't prove
Speaker 1: quite so easy.
Speaker 2: So a couple of things going on that are worth
Speaker 2: keep in mind. One is, like, the equation may have
Speaker 2: changed for a Tesla worker in Fremont. So with this
Speaker 2: big pay increase twenty five percent for Detroit autoworkers, right,
Speaker 2: maybe the union package or like the comparative advantage of
Speaker 2: working for Tesla is not quite what it was as
Speaker 2: in twenty eighteen. The other thing is Tesla cannot grow forever.
Speaker 2: Right in twenty eighteen is very different companies. Right at
Speaker 2: the beginning of the Model three production, it had a
Speaker 2: lot of sort of new stuff ahead of it. At
Speaker 2: the moment, you know, Tesla's worth around seven hundred billion
Speaker 2: dollars with a lot of sort of futuristic elon musk,
Speaker 2: you know, fairy dust assumptions kind of baked into the
Speaker 2: stock it's also been relatively flat over the last year.
Speaker 2: And then the other thing is we have seen a
Speaker 2: lot of success by labor unions kind of targeting companies
Speaker 2: like Tesla, And so think about the efforts to unionize Starbucks,
Speaker 2: which for a very long time was this kind of
Speaker 2: left leaning, sort of much admired company, admired by a
Speaker 2: lot of liberals, that now has you know, found itself
Speaker 2: kind of in the crosshairs of organized labor. The same
Speaker 2: labor Union Workers United that went after Starbucks has is
Speaker 2: making an effort to unionize Tesla's Buffalo plant. So there's
Speaker 2: actually a lot of stuff happening here. And the last
Speaker 2: thing I'll say that I think is significant is, you know,
Speaker 2: Joe Biden got on the picket lines at during the
Speaker 2: UAW strike, and there's a real there's like a potential
Speaker 2: for a political risk to Tesla where you have on
Speaker 2: one hand, Elon Musk kind of tacking to the right,
Speaker 2: sort of going on X and palaling around with you know,
Speaker 2: Vek Ramaswami and Ronda Santis and lately, most recently I
Speaker 2: think he was tweeting some sort of stop the steel
Speaker 2: adjacent videos. And you have the Democratic candidate, you know,
Speaker 2: sort of side going around saying I'm siding with unions
Speaker 2: and so on. You know, the Bay Area politics have
Speaker 2: changed a little bit in the Bay Area maybe over
Speaker 2: the past few years, but it is a left leaning
Speaker 2: you know, it's a left leaning area. And if this
Speaker 2: becomes super politicized, that could also affect Tesla's ability to
Speaker 2: keep its workers from forming a union.
Speaker 3: But Musk can also shift production, so he also has
Speaker 3: a huge plan in Texas, which is a right to
Speaker 3: work state. So like, I just sort of feel like
Speaker 3: it's a risk to the Tesla workers, Like, Okay, they
Speaker 3: try to organize the union, then Eline could be like,
Speaker 3: you know what, like forget it, Like I'm going to
Speaker 3: shift production to the South. I've got this new plant
Speaker 3: in Mexico. Like there's risks sort of all around. But
Speaker 3: you know, I think what Tesla lacks right now is
Speaker 3: Christian Small is the like famous Amazon employee who like
Speaker 3: organize the Amazon union. Like I don't know who that
Speaker 3: is at Tesla. Is it Sean Fain coming from Detroit
Speaker 3: to like try to organize, or is there like someone
Speaker 3: internally who's going to like rise up and be that worker.
Speaker 3: Like I just think that organizing works best when it's internal.
Speaker 3: The UAW has never been able to penetrate that plant,
Speaker 3: and yes, they will try again, but I just still
Speaker 3: think the odds of success are long, so Dana.
Speaker 1: But in Europe, he actually faces some labor pressure there right.
Speaker 3: In Sweden and in Germany.
Speaker 1: Yeah, and in general, those pressures in Europe, and any
Speaker 1: wage pressures that may may bubble up here in the US.
Speaker 1: They come in a slightly tricky time for Tesla in
Speaker 1: the sense that margins are shrinking right now. Profit margins
Speaker 1: are shrinking at Tesla.
Speaker 3: Yeah, I mean, listen, this is a great time for
Speaker 3: labor to make its move, no doubt, and they will.
Speaker 3: And in Europe, like the trade unions are very powerful,
Speaker 3: so the trade union effort in places like Germany, they
Speaker 3: do have levers and they can push, and like you know,
Speaker 3: Tesla will probably raise wages to accommodate that. But in
Speaker 3: the United States, like I think we have to be
Speaker 3: honest that like the cage match that we really want
Speaker 3: is Sean Fayne versus Elon Musk. That's what everyone is
Speaker 3: gunning for. Like, you know, the Zuckerberg thing is never
Speaker 3: going to happen, but people want Sean fain to come.
Speaker 3: They really want people want to see what this looks like,
Speaker 3: because we'll break.
Speaker 6: But if we don't think that it's going to happen,
Speaker 6: then I think that the biggest takeaway is what is
Speaker 6: this going to do to Elon's If there is a
Speaker 6: war declared Sean fayin versus Elon.
Speaker 5: Musk, He's going to take that really personally.
Speaker 6: I mean, Sean Faine has said that he doesn't think
Speaker 6: billionaires should exist. He has he has a lot of
Speaker 6: feeling around that, and we could see that come and
Speaker 6: impact his policies for the twenty twenty four election. On
Speaker 6: X he's already, as Max said, cozied up to some
Speaker 6: of the far right and the conservative candidates. This is
Speaker 6: something that he has now power over this megaphone that made.
Speaker 3: Yeah, he can made shadow Band, the uaw tweets. I mean,
Speaker 3: he could do all yeah.
Speaker 6: I mean, you know, who knows what he'll do. But
Speaker 6: I do think that we need to think of all
Speaker 6: of these things in the context of his new power
Speaker 6: over the conversation ahead of a major presidential election.
Speaker 1: Yep, Okay, So we have a very pro union president
Speaker 1: in the White House, we have Elon Musk who's always
Speaker 1: been a libertarian attacking further to the right. We have
Speaker 1: this labor moment and the rise of Sean Fain and
Speaker 1: Sean Fain setting his sights on Tesla Max. What does
Speaker 1: all this mean for the election one year from today?
Speaker 2: All right, So here's my sort of take on what's
Speaker 2: going through Elon's head and like why he's, you know,
Speaker 2: doing the things he's doing politically. Like if you're wondering
Speaker 2: why Elon Musk, who maybe ten years ago you thought
Speaker 2: of as a like Obama adjacent kind of left of center, uh,
Speaker 2: Silicon Valley solutionist, you know, kind of like a green
Speaker 2: capitalist who's building solar panels. Like why is he suddenly
Speaker 2: tweeting about voting machines in Georgia and you know, complaining
Speaker 2: about like transgender rights. And it's because it's partly because
Speaker 2: of this union thing. It's because he's he's dealing with
Speaker 2: political headwinds that are new and Joe Biden, after getting
Speaker 2: elected president, really embraced Detroit and these union shops, even
Speaker 2: around electric cars. Elon Musk felt kind of squeezed out
Speaker 2: of that. And I think both on a on a
Speaker 2: personal level, like felt kind of like offended that the
Speaker 2: Democrats like weren't thanking him more for for all the
Speaker 2: work he'd done to popularize technical to be clear, and
Speaker 2: on a political level.
Speaker 1: But to be clear, I mean, Tesla absolutely positively does
Speaker 1: dominate the EV space in this country.
Speaker 2: Right, and so so maybe his aggrievement was was justified.
Speaker 2: But but you got to also just look at the
Speaker 2: political reality, which is that the Democrats consider organized labor
Speaker 2: an important constituency and Elon Musk has set himself kind
Speaker 2: of opposed to that. And I think as you've seen
Speaker 2: Biden kind of you know, move closer to to Detroit
Speaker 2: and and to the ua W, you're seeing Elon sort
Speaker 2: of embrace you know, right wing causes and in particular
Speaker 2: Republican candidates, you know. And initially it looked like he
Speaker 2: was gonna maybe be a Dissanta supporter. Then Desanta's like
Speaker 2: political prospects haven't looked totally great if you're following the polls.
Speaker 2: Lately he sort of tweaked, uh, you know, pivoted to
Speaker 2: vek Ramaswami. That's not looking so good. And lately we're
Speaker 2: seeing you know, Donald Trump, the the likely Republican candidate,
Speaker 2: and I think Elon is right now trying to find
Speaker 2: his way, you know, back into into you know, the
Speaker 2: good graces of MAGA because of course, for a few
Speaker 2: years there they there was a little bit of a
Speaker 2: strange estrangement between Elon World and Trump.
Speaker 6: World, even though he's been on the record in Walter
Speaker 6: Isaacson's book saying he compared Trump to a con man.
Speaker 2: Yeah, I think it's a good bet that Trump has
Speaker 2: not read that, and I think that so long certainly
Speaker 2: Elon's bet.
Speaker 1: Okay. So, so we have our final segment. We are
Speaker 1: we're going to be bringing this back periodically. We're calling
Speaker 1: it Cage Match Watch. And you know, Dana tried to
Speaker 1: give us this whole thing a Sean Faine Elon Musk here,
Speaker 1: that's not the cage match. The cage match we're all
Speaker 1: waiting for, and it's gonna happen Elon Musk versus Mark Zuckerberg.
Speaker 2: Max.
Speaker 1: There have been some developments.
Speaker 2: Well, as you know, David, I have done a lot
Speaker 2: of analysis, a lot of careful thinking on this. And
Speaker 2: you also know that I am an Elon truther. You know,
Speaker 2: I say, conventional wisdom says that Mark Zuckerberg, who trains
Speaker 2: with you know, famous mixed martial arts fighter. He looks
Speaker 2: kind of jacked when you see pictures of him with
Speaker 2: his shirt off, that he is a shoe and to win.
Speaker 2: I've argued, as you know that Elon is very big.
Speaker 2: He's got a long reach. He you know, he's like
Speaker 2: six foot four or something around early two hundred and
Speaker 2: forty two hundred and fifty pounds. You know he's gonna
Speaker 2: have a big advantage. But I was listening to Joe
Speaker 2: Rogan's podcast, and I have an update, a strategy update
Speaker 2: to share about Elon, which is that I don't think
Speaker 2: he knows what he's doing. There were long stretches in
Speaker 2: this pocket.
Speaker 1: But he's a life long brawler. I mean, the reason
Speaker 1: why I'm coming around to musk a little bit, which
Speaker 1: I was initially skeptical. He's been fighting for decades.
Speaker 2: Yes, he said he's got a PhD in street fighting.
Speaker 2: He uh. There was like there were these long sections.
Speaker 2: Everyone should listen to. This is very important. Ever, stop
Speaker 2: what you're doing right now, pull your car over. Listen
Speaker 2: to forty five minutes of Elon and Joe Rogan talking
Speaker 2: about this. But there are long sections of discussion around
Speaker 2: moves and and I gotta say Elon Musk did not
Speaker 2: sound very confident or well informed on the tactics of
Speaker 2: jiu jitsu or.
Speaker 1: Any other in the in the heat of the moment
Speaker 1: he's in the ring, he's just it's just gonna that
Speaker 1: that that street brawler in him is just gonna come out.
Speaker 3: There's another development, Sarah, like what happened to Mark.
Speaker 6: Zuckerberg towards a cl has just got surgery, which is
Speaker 6: which is kind of interesting because Musk said that he
Speaker 6: might need to get surgery to strengthen his neck, which
Speaker 6: is I don't think that's what surgery does. He said
Speaker 6: that he's not a doctor. You know that's true. I
Speaker 6: don't want to spread misinformation on this podcast. These men
Speaker 6: spend millions of dollars on personal physical security they have.
Speaker 6: They have like former Secret Service agents following them around,
Speaker 6: and yet they're putting themselves in physical danger all the time.
Speaker 2: The only security these guys need are their own fists.
Speaker 2: All right, that's it.
Speaker 1: Enough of the cage match talk.
Speaker 2: Let's call it quits.
Speaker 1: Thanks for listening to the first ever episode of elan Inc.
Speaker 1: And thanks to our contributors Max, Sarah Dana.
Speaker 3: My pleasure.
Speaker 2: Thank you always pleasure.
Speaker 1: Our supervising producers Magnus Hendrickson. This episode was produced by
Speaker 1: Stacy Wang, Naomi Shaven and Rayhan Harmanci are our senior editors.
Speaker 1: The idea for this very show also came from Rayhan.
Speaker 1: Blake Maples handles engineering, and we get special editing assistants
Speaker 1: from Jeff Grocott, thanks a bunch of BusinessWeek editor Joel
Speaker 1: Weber as well. The elon Ink theme is written and
Speaker 1: performed by Taka Yasuzawa and Alex Sukiira. Sage Bauman is
Speaker 1: the head of Bloomberg Podcast and our executive producer. I
Speaker 1: am David Papadopoulos. If you have a minute, rate and
Speaker 1: review the show, it'll help other listeners find us.
Speaker 2: See you next week.