November 19, 2024 • 35 mins
Does money speak? And if so, what is it saying about Elon Musk and Donald Trump? In this episode of Elon, Inc., the panel—host David Papadopoulos, Elon Musk reporter Dana Hull, social media reporter Kurt Wagner and Bloomberg Businessweek senior writer Max Chafkin—consider how Musk has benefited from his incredibly close relationship with the president-elect, even as some cracks emerge between them.
Also discussed: Bluesky, a new version of what Twitter was before Musk got a hold of it, has had a great few weeks, adding millions of users. It’s not clear how this will impact X, as its value—like all of the right-wing billionaire’s companies—is now tied to Trump. There might not be a good advertising business left for X, but it has other uses now, as the media arm of Musk’s political operation, and the Republican Party as a whole.
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Episode Transcript
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Speaker 1 (00:03):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:14):
Well, Elon Musk is now the richest person on the planet.
Speaker 3 (00:17):
More than half the satellites in space are owned and
controlled by one man.
Speaker 2 (00:22):
Starting his own artificial intelligence company. Well, he's a legitimate
super genius, I mean legitimate.
Speaker 3 (00:28):
He says.
Speaker 2 (00:29):
He's always voted for Democrats, but this year it will
be different.
Speaker 1 (00:32):
He'll vote Republican.
Speaker 4 (00:33):
There is a reason the US government is so reliant
on him.
Speaker 1 (00:36):
Elon Musk is a scam artist and he's done nothing.
Speaker 4 (00:41):
Anything he does is fascinating the people.
Speaker 5 (00:51):
Welcome to Elon Ink, Bloomberg's weekly podcast about Elon Musk.
It's Tuesday, November nineteenth. I'm your host, David Popadopolis. So
it's somehow been just fourteen days since the election. But oh,
how busy they've been for Elon Musk, who still seems
to be basically living at mar A Lago, racking up
invites from foreign leaders, watching his wealth sore, and weighing
(01:15):
in loudly on Trump's cabinet appointees. All the while his
social media company x steadily loses users to rival Blue Sky.
And We're going to get right into all of this
with our very own Musk cabinet, Ace reporter Dana Hall Hey.
They're Dana Hey, Kurt Wagner, who covers social media for
(01:35):
US here at Bloomberg, Hay, Kurt Hi, David Hey, and
then Max Chafkin, who around here feels a little like
Musk at the Mara A Lago ocean front pool.
Speaker 6 (01:45):
Elon Musk elan twa job. What a job he does.
He's a great and he happens to be a really
good guy. You know, he likes this place. I can't
get him out of here.
Speaker 3 (01:58):
He just likes this place. And you know what, I
like having him here too.
Speaker 6 (02:01):
He's good, He's done a fantastic job. Really an incredible
mind and these unbelievable entrepreneurs sort of everything.
Speaker 3 (02:10):
I'm asking him, what do you do best? And we
were not able.
Speaker 6 (02:13):
To figure it out. But it's a lot of things.
Speaker 3 (02:16):
Amax, David.
Speaker 2 (02:18):
I trust that my confirmation hearing will be food and uneventful.
Speaker 5 (02:22):
Yes, it shall all right. We're going to dive right
into it. The Trump trade is working out spectacularly so
far for Elon Musk. As you look at the numbers
so far, his wealth is now up to three hundred
and twenty six billion dollars according to the Bloomberg Terminal,
which is about one hundred billion dollars more than his
(02:43):
closest rival, who would be Jeff Bezos. Tesla stocks her
up about a third since the election several hundred billion,
and Xai and SpaceX are cutting deals at record high valuations. So,
you know, Kurt Wagner, in the run up to the vote,
on this show and in other places, there was a
lot of handwringing and wondering about whether Musk was neglecting
(03:07):
his companies and neglecting his shareholders during the campaign by
spending so much time campaigning for Trump, and he was
essentially undermining these companies. I guess those numbers, as it
strikes me, at least those valuations put a rest to
all of that. The money speaks for itself, does it not,
(03:27):
mister Wagner to an extent.
Speaker 4 (03:29):
I think it does, right. I mean, this is a
man who has built a reputation on making massive bets,
and this is a massive bet that he made that
is paying off handsomely. Right, he picked Donald Trump. He
put the full weight of his wealth, the full weight
of his time, his reputation behind him. Trump is now
(03:53):
president Again, Elon is you know, the most powerful non
elected person probably in the world, and he's reaping the
benefits to come with that, right, and that includes the
buoyancy of his his you know, companies, and the idea
that because he's close to the president, because he has
(04:13):
the president sort of in his ear, he's going to
be able to, you know, get the type of regulation
he wants. He's going to get the types of deals
that he wants, he's going to get the relationships that
he wants, and all of those things are beneficial to
Elon Inc. And the world of Elon Muskin. We're seeing that,
as you point out in the valuations.
Speaker 5 (04:30):
Yeah, and we're gonna we're going to get into the
breakdown item by item of what is pushing up that valuation.
Speaker 3 (04:36):
Max.
Speaker 2 (04:37):
I mean, he's absolutely neglecting his companies. There's like no
question that he has spent the last month or so
doing nothing but hang around Donald Trump and go to
campaign events and focus on this election.
Speaker 3 (04:49):
Now.
Speaker 2 (04:49):
I think the bet that the investors are making, as
Kurt saying, is that he's gotten a lot for his companies.
Speaker 3 (04:55):
And and you.
Speaker 2 (04:56):
Know, you could make an argument right that maybe having
a guy who kind of is impulsive. Who's a let's
just put this generously, an unconventional manager has you know,
pensions for outbursts of anger, erratic decision making. Maybe it's
better for him to be, you know, kind of operating
at a high level doing the kind of political diplomacy
(05:17):
that could help a company of Tesla size or a
company of space exercise. And like that's the bet that
they're making. But I also think like we should not
just assume that the market has any idea whether this
is good or bad for Tesla. Yet this is a
bet that investors are making, you know, amid a moment
of a lot of exuberance. And you know, we'll see
(05:38):
Tesla stock, as we talk about all the time, it
swings a lot on this podcast.
Speaker 5 (05:42):
So Dannik Kurt I wonder on that point, are there
any signs inside Musk's companies that all the time he
is spending in Pennsylvania now in mar A Lago, that
top executives at that at those companies are now empowered
to do more make the decisions on their own. Is
there any implicit or explicit message, yes, go ahead and
(06:04):
do that, or is it too soon for that?
Speaker 1 (06:07):
I mean, listen, Musk has always run so many companies
that his executives have always been kind of empowered to
do stuff without him. Like at SpaceX, Gwen Shotwell clearly
runs the day to day. At Tesla, there aren't really
that many named executive officers, and like in the past,
you know, people would always complain that there were bottlenecks
because they were waiting for Elon to sign off on stuff.
But like Tesla's a profitable company. It kind of runs.
(06:30):
It's like they make cars, they sell cars, Like, you know,
he's more focused on robotics in AI, like the basic
you know work of like running a factory, like he's
no longer sleeping on the floor or whatever. So I
just think that we as a news or operation need
to kind of stop looking for like these points of
(06:51):
like everyone wants the narrative that like just falling apart
because Elon is doing politics and frankly, it's not like
like now you have the whole like Trump administration on X,
like X is doing fine. Like I don't know, I
just I just sort of feel like there's a desire
to find these points of tension and friction that might
be premature because.
Speaker 5 (07:10):
Well, well, a a were journalists, and journalists by definition,
that's what we do. We look for points of friction
and tension. But I guess that answer implicit answer is
that the CEO role doesn't matter, Then why the hell
do I need a CEO?
Speaker 4 (07:22):
I think it matters different at different companies, right, So, like, yeah,
when you're the CEO of six different businesses that are
all you know, at various stages, but for the most part,
relatively established, Yeah, maybe you don't necessarily need a traditional
hands on CEO, right, But that's going to be very
different when you have a startup or something like that.
(07:43):
I guess I would say I would maybe echo with
Dana saying, and just add I think it's too early, right, Like,
this is already someone who was who was spread incredibly
thin well before Trump showed up into the picture. For him,
it's never He's never been someone who's like, you know, hey,
I'm going to be at the office from nine to five,
you know, pop eye for office hours or whatever. Like
that's just not how he operates anyways. And so adding
(08:05):
this other you know, I don't even want to call
it a hobby obviously, because is much better than that.
But adding this other commitment to his plate is obviously
it's a big deal, but at the same time, his
companies are used to only getting fractions of his time,
and so I think it's too soon to say whether
this is going to have a long term impact.
Speaker 1 (08:24):
You know, there's a lot of irrational exuberance right now.
I would like to point out that SpaceX is going
to launch a starship Brocket this evening, and President Trump
is going to go to that launch, as is the
new FCC nominated chair, Brendan Carr. So you might even
see like the entire Trump cabinet or like everyone from
mar A Lago like at this launch. So I think
that for Elon that is really good, and he's neglecting
(08:47):
his companies, perhaps on the day to day, but just
the sort of fact that this whole Republican entourage is
now hanging out with Elon, flying around with Elon, going
to the UFC fight with Elon, like he is best
in the glow of that adulation, which he never got
from the Biden administration, as we have talked about many times.
And so for a guy who really likes the dopamine
(09:09):
hit of adulation and feeling like he's in power, and
feeling appreciated. To have the President elect come to his
launch is like a huge thing for him.
Speaker 5 (09:19):
Let me just say this that all those things Max
you said are correct. We shall see ultimately where Tesla
and these other companies from an operating basis go from
here in the coming months and years, and whether him
Elon Musk spending so little time of late with them
ultimately hurts them or not. But if I'm a shareholder
(09:40):
in the company he's just added in Tesla, for instance,
he's just added several hundred billions of dollars to the
value of the company, I am thrilled. And if I
have those long term concerns, you know what I do.
I just sell the stock at an incredible profit right now.
Speaker 3 (09:55):
Absolutely.
Speaker 2 (09:55):
And one thing I'll say that I think where what
the market is telling us is that there were a
lot of reports even before the election, but then then
definitely after kind of skeptical about hey, how long can
this Trump Musk romance last? You know, these you know,
they are so high on each other's presence, and I
think what we're seeing to Dana's point, is it's lasting
(10:18):
so far. Right Musk is in the inner circle. He
has not been pushed out. If anything, he has gotten
closer to Trump over the last fourteen days than he
was after the election.
Speaker 3 (10:27):
And that is true. It is holding for now.
Speaker 5 (10:29):
And we're going to get into that a little bit
later on, because there are some signs here and there,
some fraying. But I first do want to go through
item by item if one is to make sense of
this enormous spike in the valuations of his companies in
terms of what a Trump administration can can bring about
for Elon Inc. Let's do that now. So, Dana, the
(10:51):
first thing that comes to mind and I need to
ask you about, is the possibility, as has been floated
in recent days, that the Trump adminished station brings about
some sweeping new rules to autonomous vehicles, helping pave the
way for Elon to roll out what are.
Speaker 3 (11:09):
We calling it, robo cyber cab. Tell us a bit
about that.
Speaker 1 (11:13):
So, as you all recall back in you know, April,
Elon Musk basically fired twenty percent of Tesla's staff and
completely pivoted the company. They're no longer chasing volume of
electric cars. The future is all about autonomy and AI
and the robotaxi and on an earnings call, Musk said
very clearly, like if President Trump is elected, like I'm
(11:33):
really hoping for a kind of a streamlined federal process
when it comes to autonomous vehicles instead of this patchwork
regulatory quilts where like one city has one rule and
another state has another rule. And that is very clearly
one of his asks. And you know, I think that
just basically a streamlined, very fast track kind of regulatory
(11:56):
regime is really what Elon wants, and now he's probably
gonna get it.
Speaker 3 (12:00):
There was a report to that effect that correct me
if I'm wrong.
Speaker 1 (12:04):
Yeah, our colleague David Welsh broke the story over the
weekend that the Trump transition team was like floating possibly
Emil Michael, who used to work at Uber as like
a potential Dot secretary. Now we know that he is
not the cabinet elect, but I mean, we don't know
yet who's going to end up running NITZ for example.
Speaker 3 (12:22):
Just a couple of things.
Speaker 2 (12:24):
Yeah, Trump did not pick the guy that Elon seemed
to want, Emil Michael, who would have been who's basically
you know, an ex uber executive, former Silicon Valley guy.
Seems like of all the people who could possibly just
kind of ram this through, he'd be the most likely
to do it. I have to say, the guy that
Trump did pick doesn't have any track record of or
(12:44):
as far as I could find in a quick search
since the pick was announced, of talking about autonous vehicles.
And I would be skeptical that the Trump administration is
going to spend, you know, a ton of political capital
on this and and the other thing.
Speaker 3 (13:00):
Would it take a ton of political capital.
Speaker 2 (13:02):
So the Bloomberg story we published is really good. It
explains that they would there are some rules that they
could change, but they would need an Act of Congress
to to really you know, to really like make the
cyber cab happen on any kind of big scale. And
I think that the problem here, which was the problem
before Trump was elected, is that you can have the
(13:23):
best regulatory framework, the biggest, most beautiful, most glorious could
be like the toilet seat of mar A Lago equivalent
of regulatory frameworks, and you need a cyber cab, like
you need a working car to like make use of
these regulations. And again it's not totally clear that that
has happened. So again this all feels like very hypothetical.
(13:44):
We've got like, maybe there's going to be some kind
of thing that's that's going to happen to make Elon
Musk happy on the regulatory side. But then Tesla would
have to turn around and take advantage of it somehow.
Speaker 1 (13:53):
Right, it could actually backfire because you could no longer
blame regulatory approval for the delay. Like if they got
this fast track regulatory aprival, they'd have to like they'd
have to actually like start an operation.
Speaker 3 (14:09):
Dan.
Speaker 5 (14:10):
Next up the sun setting of EV tax rebates for
car buyers.
Speaker 1 (14:16):
Yeah, so the seventy five hundred dollars federal tax credit
for buying an electric vehicle has been a huge part
of the Inflation Reduction Act and really kind of encouraged
a lot of consumers who maybe weren't thinking about an
EV to buy a car. And the Trump administration has
floated about sunsetting that. Elon says that he's okay with that,
and I think that he's right in that Tesla, by
(14:38):
virtue of their volume and can do a lot with
pricing and they don't need the credits as much as
their rivals do because Tesla is already profitable. Now, would
losing the credit hurt their gross margin? Absolutely? But it's
really going to hurt rivals, and so you know, Elon
might be willing to kind of go ahead with this
(14:59):
because it would just allow Tesla's moat to get so
much better. I mean, you have like GM and Forward.
They poured so much money into trying to forecast the
EV market going forward, and they keep having to rewrite
their playbook and like scale back their ambitions, and it's
so frustrating for them because like with every administration things,
Wax and Wayne, whereas like Tesla is the dominant player
(15:19):
in the US, They're going to basically be able to
sort of you know, continue that moat and they still
get a lot of funding from the IRA for manufacturing,
for installing superchargers. I mean, I could see, you know,
Tesla just basically like the credit goes away, Tesla just
slashes prices, which we've seen Elon do in the past,
(15:40):
and like, I don't think that the credit is that
big of a deal, to be honest, I think that
Elon would be happy to see it go away.
Speaker 4 (15:46):
I guess I would point out that this is not
the only sort of industry or major tech company that
is almost pushing for more regulation or in this case,
you know, fewer benefits in order to benefit them. It's
sort of it's counterintuitive, right, So I would point out
that Meta, which owns Facebook, Instagram for years, has been saying, hey,
(16:06):
regulate us, regulate the tech, regulate the social networking industry.
And on the surface, you think, why would they ever
want more regulation?
Speaker 3 (16:14):
Right, this would hurt them?
Speaker 4 (16:15):
Well, it's because, as we pointed out, same with Tesla,
they're in such a dominant position that any regulation they
can deal with. They have the resources, they have the talent,
they have the time to deal with it easily. But
it will close the door for a number of competitors.
That will make it harder for competitors to catch.
Speaker 3 (16:32):
Up to them.
Speaker 4 (16:32):
Right, It's still a growing in somewhat new industry, the evs,
but like it's much more mature than when Elon started
this out right, So like there is a dominant player
which didn't exist when he was first going. And so
I think that's why this counter into a intuitive idea
actually makes a lot of sense for him.
Speaker 3 (16:48):
Max.
Speaker 5 (16:48):
Another thing that is helping Musk's empire is the idea
it's been floated or I guess Trump has said he
would like Brendan Carr to chair the FCC.
Speaker 3 (16:58):
Why is this positive for elinning.
Speaker 2 (17:00):
Brend And Carr is a long time Elon Musk fan,
and in particular he's expressed appreciation for Elon Musk in
all sorts of respects. But the FCC is an important
regulator for Starlink, which is a subsidiary of SpaceX. And
you know, one of Elon Musk's big frustrations with the
Biden administration is that there is a lot of money
(17:20):
for rural broadband internet and that money has not gone
to him. There are a couple of programs and car
has been very outspoken about the need.
Speaker 3 (17:31):
To change that.
Speaker 2 (17:32):
And I actually think this is the way, like much
more than autonomous vehicles or some of these other things
that rely on a lot of hypothetical car.
Speaker 3 (17:41):
This is a way.
Speaker 2 (17:42):
Yeah, this is like a way that Elon Musk can
put money directly towards his top line, you know, revenue
from the government to Starlink. And part of the reason
it's more plausible is because Elon Musk has like a
real plausible case for it.
Speaker 5 (17:57):
Yeah, That's what I was going to ask you. Is
there a good inmate case that starlink deserves that money?
Just as much as these other companies do.
Speaker 2 (18:03):
It's complicated. I've done I've done a little bit of
reporting on this, and there are there's some analysts out
there who have been looking at this and talking about
it as a possibility. Elon Musk's argument is essentially, the
satellites are going to get better, and no one really
knows how true that is or to what extent they're
going to get better. Are they going to get better enough?
And like that's kind of where the rubber meets the road.
But there is a case for satellites, like you could
(18:26):
roll these like give people starlinks. Is a lot cheaper
than laying out fiber. The question is like when you
try to do it on a mass scale, how does
that work? And I think the from a from a
sort of Elon point of view, he gets two things
out of this. One is potentially more revenue, but the
second is it slows down these traditional telecom operators that
(18:47):
we're counting on government subsidies for their own you know,
rollout of rural broadbands. So this is like a definite
win for Elon. I think it's I think Brendan Carr
is like the biggest win he's had so far, even
bigger than getting named as the co chair of DOGE,
and certainly better than these kind of you know, sort
(19:07):
of vague reports that the Trump administration is is you know,
sympathetic to autonomous vehicles, because because again we don't really know,
it's just a little hard to figure out how that
would benefit Elon, at least in the short term.
Speaker 1 (19:19):
The other thing I wanted to jump in on is
that Carr has advocated a ban on TikTok, citing national
security concerns because of China, and that could also benefit
Elon because you know, as X adds more video capacity,
they're really rivals with TikTok. So I think when we
look at all of these cabinet appointments, it's really important
to sort of think about how they benefit Musk not
(19:39):
just in one company, but sort of across all companies.
And Brendan Carr is going to go to the Space
Excellence today.
Speaker 4 (19:44):
Also, it should be noted I guess that Elon has
claimed he doesn't want a TikTok ban, right, He's sort
of like, hey, this is against free speech, this would
be a bad thing. But as Dana very smartly points out,
like he's saying that in reality, I think TikTok not
being in picture would ultimately benefit X. So he might
say he doesn't want it, but when push comes to shove,
(20:06):
I'm sure he'd happily you accept a lot more attention
coming towards X.
Speaker 5 (20:10):
Yeah, more on X in a moment, Max, thank you
very much for bringing up DOZE, the Department of Government Efficiency.
We are absolutely, dear listeners, gonna be talking more about
DOZE in coming weeks and months. But I want to
Dana before we move on to X, ask you this.
Max earlier had said that so far the Trump Musk
(20:30):
relationship seems to be holding up just fine, and that
indeed seems to be the case. But at the same time,
there are signs of fracture or at least tension emerging,
reports of insiders in the Trump team bristling at how
Musk is acting quote as a co president to Trump.
And I wonder if you feel like these are just
(20:52):
initial bumps in the road and the cost of doing
business with Trump, or a sign that things might come
to a head sooner rather than later.
Speaker 1 (21:00):
I think it's kind of bs to be honest. I mean,
the Trump team is famously leaky, right and right now,
You've got all these people in mar A Lago like
jockeying for position and jockeying for power, and like you know,
there's this whole like fight about who's going to be
the Treasury secretary in different camps or leaking things to
different things, and yeah, like oh, there was like a
(21:20):
dust up at a dinner with like boris what's his
name or like whatever, like Trump is going to the
SpaceX launch today, Like that is what matters. Like I
used to cover politics, and I just don't take these
kind of like thinly sourced reports in certain outlets that
seriously like Elon and Trump, I've been thickest thieves for
the past like six weeks, and until there's like a
(21:40):
real rupture, I just don't really buy it. I'm sure
that some like old school Trump loyalists are maybe bristling
at the fact that Elon is around, but like you're
seeing photographs of like Trump and Don Junior and the
Speaker of the House and RFK and Elon like all
on the plane Enan McDonald's together, there's no rupture. I've
(22:01):
always just been very skeptical of a lot of political
reput because that.
Speaker 3 (22:05):
Is fair, but Max.
Speaker 5 (22:06):
Trump has on a couple of occasions, including the clip
we played at the beginning of the show, he has
publicly started taking swipes at Eline.
Speaker 2 (22:13):
Yeah, I gotta agree with everything down said she.
Speaker 3 (22:15):
I'm sorry, David.
Speaker 2 (22:16):
I know, I know that's not what you want to hear.
But but here's the thing. Help, there are other there
are other constituencies within this transition who obviously have an
interest in marginalizing Elon, and and so and and there
there are other sources of power here. And and if
you just look at like the top line, like who's
at the McDonald's table, Like, I think that's a pretty
(22:37):
good indication. And what I will say is yes, in
the past and and we we get into this in
the episode that's Forthcoming of Citizen Elon. There have been
signs like this before where Trump is sort of preparing
to like shift someone and he will start making these
kind of cracks, right, and it's it's like a way
to kind of open the door. And maybe that's possible.
(22:59):
It could also be that it's a warning to Elon.
It's like, listen, you need to work with me, you know,
don't get too big for your breeches. It could also
be a signal to some other part of Trump's coalition
who he's trying to play Kate. We just like don't
know what is going on. And I really think there
are a lot of people who are like taking lessons
from the past Trump administration, which makes sense. But I
(23:21):
also think we need to look at Elon. And this
is not as much about to me anyway, This is
not as much about can Trump live in a world
where there's Elon Musk in his inner circle? It's can
Elon Musk be sufficiently subservient? And I think before this,
like last few months of political adventure with Elon, I
guess I would say no freaking way. But over the
(23:41):
last three months, Elon has proven himself willing to let
Trump lead. And until we see a difference, then you know,
I'm gonna assume that's going to continue.
Speaker 3 (23:50):
Okay, very good, Kurt.
Speaker 5 (23:56):
Let us talk about the Exodu users leaving X. Things
are going swimmingly, as we just stated, or at least
for the market values of many of his companies in
his empire, not so much right now. For X users
are leaving. Tell us what's going on.
Speaker 3 (24:13):
It's this weird.
Speaker 4 (24:15):
Sort of like Jekyl and hyde situation at X right now,
which is it is more politically and culturally important than
it has been since Elon bought the company, right like,
this is the most relevance X has had as a
social network and as a sort of distributor of Donald
Trump's agenda, news and information. At the same time, it
(24:38):
is probably maybe the weakest it has been from a
user standpoint, right because after the election, we saw all
of these people basically throwing in the towel on X
and saying I'm done with this place. And we've seen
that reflected in the numbers of two rivals, Meta's Threads
and Blue Sky, And with Blue Sky in particular, it's
(25:00):
been really interesting because Blue Sky's been around for a
couple of years. It had a lot of attention when
it first launched, and then it sort of went quiet
for a while. I think a lot of people were
just like, that's not it, that's not the place. We'll
just kind of let it sit over there. And it's
added I think it was at ten million users in September.
The week after the election, it added about one point
(25:20):
five million, and in the week since then, so you know,
week two after the election, I believe it's added about
five million users, and so it's now close to nineteen million,
up from ten million in September. As I mentioned, it's
almost doubled in size in just a couple of months.
And if you go to Blue Sky, I think the
most telling thing is that your feed is going to
(25:41):
be full of people basically saying, hey, I'm new here,
just came over from X, you know, leaving that place behind.
Tell me who to follow, tell me what to do,
like how do I use this thing? Like ha ha ha, Right,
But the idea being that all of these people are
migrating to a new network because they no longer want
to be associated with X. And so I think that
that is anecdotal, of course, but I think that, paired
(26:04):
with the rising user numbers, that these two competitors sort
of tells a picture that you know, X is having
a bit of a user user growth or user retention
issue at the moment.
Speaker 1 (26:14):
A Blue Sky has a lot of like high usage
people like Lizzo is now on Blue Sky, and epidemiologists
and climate scientists like all of my energy peeps have
moved to Blue Sky. And I think the other big
thing driving this is that X changed its term of service.
So as of November fifteenth, if you're using X, you're
basically allowing them to use your content to feed into
(26:37):
XAI and like language models. And so the change of
the terms of service is actually what kind of inspired
a lot of people to start not just like leaving X,
but like downloading their tweets and then like deleting them.
So that's like another interesting part of this is just
like people realizing that they don't want elon having their content,
(26:58):
And I mean, Max and I go back and forth
about this a lot. I struggle with my presence on
X because on the one hand, I feel like I
need to be there because that's now where the incoming
Trump administration is, like all the cabinet people like, that's
where like a lot of people who are now going
to be in power are posting. So I feel like
I have to at least lurk. But I have also
(27:18):
joined blue Sky. I hope you will find me there.
Speaker 3 (27:20):
Okay, I shall.
Speaker 1 (27:21):
We need an el in ink, We need an el
on ink starter pack.
Speaker 3 (27:24):
There we go.
Speaker 5 (27:25):
Some X is Blue Sky's gain, X's loss or are
there signs that indeed they are? For every one liberal
user that walks out the door. They are being replaced
by conservatives, conservative users. And even if that's not the case,
does it exactly matter for X. You've drilled into my
head in recent weeks that we need to rethink our
(27:46):
understanding of X and its role and the Musk Empire.
Speaker 2 (27:49):
Yeah, I mean both things can be true. Like Chrit said,
like he's right, X has never been more relevant, at
least not in the last five years than it is today.
And we don't know what the value of X is think,
Like we talked about this on the last episode, like
the models of Elon's net worth rely on fidelities mark down.
If I were a shareholder of X, I would be
marking that way the hell up because clearly, you know,
(28:13):
association with Elon amid a Trump administration, whether or not
it translates to actual you know, business, is valuable according
to the market. After the election, we saw all of
these CEOs, guys who had kind of been on the fence,
you know, go and sort of kiss the ring to Trump,
and they all did it on X, right. They all
Satyad Della Sun Dhar Pachai, Jeff Bezos, like all the
(28:37):
all the sort of tech guys who wanted to kiss
up to Donald Trump, went on X. They called him
President Trump even though he's president elect, and they and
of course they did it on Elon Musk's platform, and
so clearly it's it's like the Trump Hotel of social networks. Like,
if you want to if you want to be in
this orbit, you got to be there. And I think
and even even saying that probably understates it, because like
(28:58):
it is a really important piece of the right wing
media ecosystem right now, maybe the most important piece. But
what I'll say is, and like right wing media has
always relied on this relationship with quote unquote mainstream media,
and what X had going for it before the election
was you still had a lot of mainstream journalists there,
(29:18):
You had a lot of mainstream news organizations. Despite the
fact that Elon Musk, the owner and now key advisor
to the to the president elect, is going out there
every day saying really bad things about media, saying that
they're they're the opposition, they're terrible, and you know, cut
doing making tweaks algorithmically into the business that are harming
those companies' business. It's really only a matter of time
(29:40):
before mainstream media outlets try to find a different outlet,
and I think what we're seeing now is is some
of that happening some of these You have a lot
of journalists, a lot of media outlets suddenly like paying
attention to Blue Sky. And if that happens in a
big way and X doesn't respond, that I think will
hurt X in the LNE long run. Because conservative media,
(30:02):
as much as it is its own ecosystem, as much
as it is, there is a big audience there. Part
of what makes the most successful conservative media plays work
is that they're able to kind of straddle both sides
of it, but both the like hardcore activists as well
as kind of the middle the kind of mainstream audience.
Speaker 3 (30:19):
Could I just add real quickly.
Speaker 4 (30:20):
I mean, there's this idea that like, oh, is X
going to be relevant if it's just right leaning sort
of Trump fans without you know, liberal folks to poke
and prod or whatever. Right Like We've heard that for
kind of years. I would point you to truth social, right, Like,
what is truth social? It is right leaning Trump supporters
(30:40):
without anybody to really poke and prod. And I would
argue truth social other than basically being a glorified way
for Trump to release press releases has almost no relevance
in general kind of modern Internet culture, right like it
is truly just like Trump Press release two point zero service.
And so I do think for X to stay relevant,
(31:02):
they need they they sort of need, you know, people
from from both sides of this political spectrum to care
about what's happening on this service, because otherwise it does
become very kind of echo chamber isolated. And I'm just
not sure that it's going to jump off the Internet
onto television and radio and podcasts in the way that
it has historically if it becomes very very one sided.
Speaker 1 (31:24):
Max.
Speaker 5 (31:24):
So, one thing I've learned over decades covering finance is
that marks, when you're marking the value of a private asset,
not a publicly traded asset, private marks are a dark art. Okay,
they are a dark art. And so if you know
what if you have, if you happen to have a
little cut of that, you know, stock and X, and
you want to mark it up, go ahead, man mark
(31:45):
that thing up.
Speaker 2 (31:46):
I do think, like combo of Trump being president and
the meme the stock market where it is, it's not
out of the realm of possibility that X could return
to the public markets one day and even return at
evaluation that might be at least much higher than it's
current super depressed in.
Speaker 3 (32:04):
The abstract, That does seem plausible.
Speaker 5 (32:06):
But Kurt, are there any signs of any kind that
there's any buzz among the banker investing community that man,
let me get my hands on some of them X shares.
Speaker 3 (32:16):
So I agree with Max.
Speaker 4 (32:18):
I think when Fidelity comes out with its next report,
which will probably get to go up three weeks from
now or whatever, we can talk about when it does,
I wouldn't be I would be shocked if the value
is an up right, if it isn't up noticeably, only because,
as Max pointed out, being associated with Elon and therefore
being associated with Trump tends to signal we think, you know,
we're a buyer of this type of thing. At the
(32:40):
same time, if I'm Elon and X, the last thing
I think I want to do is go public right
now and expose for the businesses. Yeah, but I think
you know, this is not a strong business. I continue
to firmly believe that this is not a good business,
right like it is a good cultural weapon in some
(33:02):
in some ways for Elon and Trump. But you know,
there was a report, David.
Speaker 3 (33:06):
You may have seen.
Speaker 4 (33:07):
Last week that all of these big blue chip advertisers
had returned. I wrote some of them down. It was
like IBM, Disney, Comcast, Warner Brothers, and it was like, oh,
they're no longer paused. They're spending on X again, Like
this is huge. And then you look into the report,
all of those companies combined spent three point three million
dollars on advertising over nine months. It was down ninety
(33:28):
eight percent from twenty twenty three. So my point being
is that even though they're trying to create.
Speaker 3 (33:34):
Like wait a minute, well what about the cheach and
chong gummies? What about then? Tell me about the cheaching
chong gum, you are single handedly keeping those guys afloat. David.
We've talked about this. You need to stop those place chechicheng.
Speaker 4 (33:48):
I feel like I'll get off my soapbox here, but
I just feel like the idea that this is a
strong business is yet to be Maybe I will be wrong,
and we've all been proven wrong by Elon at one
point or another, and this will be my big hill
that I die on.
Speaker 3 (34:04):
But I don't believe right.
Speaker 4 (34:06):
Now that this is a very strong business and it's
not something you would want to say, Hey, let's open
up our books, let's go public, let's let investors get
a look at how this is actually going, because I
don't think it would go down with that.
Speaker 5 (34:15):
I think then indeed the company has much greater value
for Elon and his empire as a private, small, private
entity within it that does access it to media.
Speaker 3 (34:26):
Arm I am.
Speaker 5 (34:27):
Being told by our producer Magnus that we are skipping.
Speaker 3 (34:31):
The feud or skipping the feud we don't have time
for it.
Speaker 4 (34:34):
Sounds like there is a feud you and the producers.
Speaker 5 (34:36):
We have to let every once in a while we
have to listen to Magnus, Kurt, Dana, Max, thank you
very much for joining.
Speaker 4 (34:43):
Great to be here, Thanks for having us.
Speaker 1 (34:44):
Always a pleasure.
Speaker 3 (34:52):
This episode was produced by Stacy Wong.
Speaker 5 (34:54):
Anna Masarrakas is our editor and Rayhan Harmancier, senior editor.
The idea for this every show also came from Rayhon
Blake Maple's Handles Engineering and Emma Sanchez fact checks. Our
supervising producer is Magnus Henrickson.
Speaker 3 (35:09):
The Elon Inc.
Speaker 5 (35:10):
Theme is written and performed by Taka Yasuzawa and Alex Sugijira,
Brendan Francis Newnham is our executive producer, and Sage Bauman
is ahead of Bloomberg Podcasts. A big thanks as always
to our supporters Joe Weber and Brad Stone.
Speaker 3 (35:24):
I'm David Papadopoulos.
Speaker 5 (35:26):
If you have a minute, rate and review our show,
it'll help other listeners find us. See you next week.
Thanks for listening to the Elon Inc. Podcast. If you
never want to miss a story, become a Bloomberg dot
com subscriber today. Check out our special intro offer right
(35:46):
now at Bloomberg dot com Backslash Podcast Offer or click
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Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:14):
Well, Elon Musk is now the richest person on the planet.
Speaker 3 (00:17):
More than half the satellites in space are owned and
controlled by one man.
Speaker 2 (00:22):
Starting his own artificial intelligence company. Well, he's a legitimate
super genius, I mean legitimate.
Speaker 3 (00:28):
He says.
Speaker 2 (00:29):
He's always voted for Democrats, but this year it will
be different.
Speaker 1 (00:32):
He'll vote Republican.
Speaker 4 (00:33):
There is a reason the US government is so reliant
on him.
Speaker 1 (00:36):
Elon Musk is a scam artist and he's done nothing.
Speaker 4 (00:41):
Anything he does is fascinating the people.
Speaker 5 (00:51):
Welcome to Elon Ink, Bloomberg's weekly podcast about Elon Musk.
It's Tuesday, November nineteenth. I'm your host, David Popadopolis. So
it's somehow been just fourteen days since the election. But oh,
how busy they've been for Elon Musk, who still seems
to be basically living at mar A Lago, racking up
invites from foreign leaders, watching his wealth sore, and weighing
(01:15):
in loudly on Trump's cabinet appointees. All the while his
social media company x steadily loses users to rival Blue Sky.
And We're going to get right into all of this
with our very own Musk cabinet, Ace reporter Dana Hall Hey.
They're Dana Hey, Kurt Wagner, who covers social media for
(01:35):
US here at Bloomberg, Hay, Kurt Hi, David Hey, and
then Max Chafkin, who around here feels a little like
Musk at the Mara A Lago ocean front pool.
Speaker 6 (01:45):
Elon Musk elan twa job. What a job he does.
He's a great and he happens to be a really
good guy. You know, he likes this place. I can't
get him out of here.
Speaker 3 (01:58):
He just likes this place. And you know what, I
like having him here too.
Speaker 6 (02:01):
He's good, He's done a fantastic job. Really an incredible
mind and these unbelievable entrepreneurs sort of everything.
Speaker 3 (02:10):
I'm asking him, what do you do best? And we
were not able.
Speaker 6 (02:13):
To figure it out. But it's a lot of things.
Speaker 3 (02:16):
Amax, David.
Speaker 2 (02:18):
I trust that my confirmation hearing will be food and uneventful.
Speaker 5 (02:22):
Yes, it shall all right. We're going to dive right
into it. The Trump trade is working out spectacularly so
far for Elon Musk. As you look at the numbers
so far, his wealth is now up to three hundred
and twenty six billion dollars according to the Bloomberg Terminal,
which is about one hundred billion dollars more than his
(02:43):
closest rival, who would be Jeff Bezos. Tesla stocks her
up about a third since the election several hundred billion,
and Xai and SpaceX are cutting deals at record high valuations. So,
you know, Kurt Wagner, in the run up to the vote,
on this show and in other places, there was a
lot of handwringing and wondering about whether Musk was neglecting
(03:07):
his companies and neglecting his shareholders during the campaign by
spending so much time campaigning for Trump, and he was
essentially undermining these companies. I guess those numbers, as it
strikes me, at least those valuations put a rest to
all of that. The money speaks for itself, does it not,
(03:27):
mister Wagner to an extent.
Speaker 4 (03:29):
I think it does, right. I mean, this is a
man who has built a reputation on making massive bets,
and this is a massive bet that he made that
is paying off handsomely. Right, he picked Donald Trump. He
put the full weight of his wealth, the full weight
of his time, his reputation behind him. Trump is now
(03:53):
president Again, Elon is you know, the most powerful non
elected person probably in the world, and he's reaping the
benefits to come with that, right, and that includes the
buoyancy of his his you know, companies, and the idea
that because he's close to the president, because he has
(04:13):
the president sort of in his ear, he's going to
be able to, you know, get the type of regulation
he wants. He's going to get the types of deals
that he wants, he's going to get the relationships that
he wants, and all of those things are beneficial to
Elon Inc. And the world of Elon Muskin. We're seeing that,
as you point out in the valuations.
Speaker 5 (04:30):
Yeah, and we're gonna we're going to get into the
breakdown item by item of what is pushing up that valuation.
Speaker 3 (04:36):
Max.
Speaker 2 (04:37):
I mean, he's absolutely neglecting his companies. There's like no
question that he has spent the last month or so
doing nothing but hang around Donald Trump and go to
campaign events and focus on this election.
Speaker 3 (04:49):
Now.
Speaker 2 (04:49):
I think the bet that the investors are making, as
Kurt saying, is that he's gotten a lot for his companies.
Speaker 3 (04:55):
And and you.
Speaker 2 (04:56):
Know, you could make an argument right that maybe having
a guy who kind of is impulsive. Who's a let's
just put this generously, an unconventional manager has you know,
pensions for outbursts of anger, erratic decision making. Maybe it's
better for him to be, you know, kind of operating
at a high level doing the kind of political diplomacy
(05:17):
that could help a company of Tesla size or a
company of space exercise. And like that's the bet that
they're making. But I also think like we should not
just assume that the market has any idea whether this
is good or bad for Tesla. Yet this is a
bet that investors are making, you know, amid a moment
of a lot of exuberance. And you know, we'll see
(05:38):
Tesla stock, as we talk about all the time, it
swings a lot on this podcast.
Speaker 5 (05:42):
So Dannik Kurt I wonder on that point, are there
any signs inside Musk's companies that all the time he
is spending in Pennsylvania now in mar A Lago, that
top executives at that at those companies are now empowered
to do more make the decisions on their own. Is
there any implicit or explicit message, yes, go ahead and
(06:04):
do that, or is it too soon for that?
Speaker 1 (06:07):
I mean, listen, Musk has always run so many companies
that his executives have always been kind of empowered to
do stuff without him. Like at SpaceX, Gwen Shotwell clearly
runs the day to day. At Tesla, there aren't really
that many named executive officers, and like in the past,
you know, people would always complain that there were bottlenecks
because they were waiting for Elon to sign off on stuff.
But like Tesla's a profitable company. It kind of runs.
(06:30):
It's like they make cars, they sell cars, Like, you know,
he's more focused on robotics in AI, like the basic
you know work of like running a factory, like he's
no longer sleeping on the floor or whatever. So I
just think that we as a news or operation need
to kind of stop looking for like these points of
(06:51):
like everyone wants the narrative that like just falling apart
because Elon is doing politics and frankly, it's not like
like now you have the whole like Trump administration on X,
like X is doing fine. Like I don't know, I
just I just sort of feel like there's a desire
to find these points of tension and friction that might
be premature because.
Speaker 5 (07:10):
Well, well, a a were journalists, and journalists by definition,
that's what we do. We look for points of friction
and tension. But I guess that answer implicit answer is
that the CEO role doesn't matter, Then why the hell
do I need a CEO?
Speaker 4 (07:22):
I think it matters different at different companies, right, So, like, yeah,
when you're the CEO of six different businesses that are
all you know, at various stages, but for the most part,
relatively established, Yeah, maybe you don't necessarily need a traditional
hands on CEO, right, But that's going to be very
different when you have a startup or something like that.
(07:43):
I guess I would say I would maybe echo with
Dana saying, and just add I think it's too early, right, Like,
this is already someone who was who was spread incredibly
thin well before Trump showed up into the picture. For him,
it's never He's never been someone who's like, you know, hey,
I'm going to be at the office from nine to five,
you know, pop eye for office hours or whatever. Like
that's just not how he operates anyways. And so adding
(08:05):
this other you know, I don't even want to call
it a hobby obviously, because is much better than that.
But adding this other commitment to his plate is obviously
it's a big deal, but at the same time, his
companies are used to only getting fractions of his time,
and so I think it's too soon to say whether
this is going to have a long term impact.
Speaker 1 (08:24):
You know, there's a lot of irrational exuberance right now.
I would like to point out that SpaceX is going
to launch a starship Brocket this evening, and President Trump
is going to go to that launch, as is the
new FCC nominated chair, Brendan Carr. So you might even
see like the entire Trump cabinet or like everyone from
mar A Lago like at this launch. So I think
that for Elon that is really good, and he's neglecting
(08:47):
his companies, perhaps on the day to day, but just
the sort of fact that this whole Republican entourage is
now hanging out with Elon, flying around with Elon, going
to the UFC fight with Elon, like he is best
in the glow of that adulation, which he never got
from the Biden administration, as we have talked about many times.
And so for a guy who really likes the dopamine
(09:09):
hit of adulation and feeling like he's in power, and
feeling appreciated. To have the President elect come to his
launch is like a huge thing for him.
Speaker 5 (09:19):
Let me just say this that all those things Max
you said are correct. We shall see ultimately where Tesla
and these other companies from an operating basis go from
here in the coming months and years, and whether him
Elon Musk spending so little time of late with them
ultimately hurts them or not. But if I'm a shareholder
(09:40):
in the company he's just added in Tesla, for instance,
he's just added several hundred billions of dollars to the
value of the company, I am thrilled. And if I
have those long term concerns, you know what I do.
I just sell the stock at an incredible profit right now.
Speaker 3 (09:55):
Absolutely.
Speaker 2 (09:55):
And one thing I'll say that I think where what
the market is telling us is that there were a
lot of reports even before the election, but then then
definitely after kind of skeptical about hey, how long can
this Trump Musk romance last? You know, these you know,
they are so high on each other's presence, and I
think what we're seeing to Dana's point, is it's lasting
(10:18):
so far. Right Musk is in the inner circle. He
has not been pushed out. If anything, he has gotten
closer to Trump over the last fourteen days than he
was after the election.
Speaker 3 (10:27):
And that is true. It is holding for now.
Speaker 5 (10:29):
And we're going to get into that a little bit
later on, because there are some signs here and there,
some fraying. But I first do want to go through
item by item if one is to make sense of
this enormous spike in the valuations of his companies in
terms of what a Trump administration can can bring about
for Elon Inc. Let's do that now. So, Dana, the
(10:51):
first thing that comes to mind and I need to
ask you about, is the possibility, as has been floated
in recent days, that the Trump adminished station brings about
some sweeping new rules to autonomous vehicles, helping pave the
way for Elon to roll out what are.
Speaker 3 (11:09):
We calling it, robo cyber cab. Tell us a bit
about that.
Speaker 1 (11:13):
So, as you all recall back in you know, April,
Elon Musk basically fired twenty percent of Tesla's staff and
completely pivoted the company. They're no longer chasing volume of
electric cars. The future is all about autonomy and AI
and the robotaxi and on an earnings call, Musk said
very clearly, like if President Trump is elected, like I'm
(11:33):
really hoping for a kind of a streamlined federal process
when it comes to autonomous vehicles instead of this patchwork
regulatory quilts where like one city has one rule and
another state has another rule. And that is very clearly
one of his asks. And you know, I think that
just basically a streamlined, very fast track kind of regulatory
(11:56):
regime is really what Elon wants, and now he's probably
gonna get it.
Speaker 3 (12:00):
There was a report to that effect that correct me
if I'm wrong.
Speaker 1 (12:04):
Yeah, our colleague David Welsh broke the story over the
weekend that the Trump transition team was like floating possibly
Emil Michael, who used to work at Uber as like
a potential Dot secretary. Now we know that he is
not the cabinet elect, but I mean, we don't know
yet who's going to end up running NITZ for example.
Speaker 3 (12:22):
Just a couple of things.
Speaker 2 (12:24):
Yeah, Trump did not pick the guy that Elon seemed
to want, Emil Michael, who would have been who's basically
you know, an ex uber executive, former Silicon Valley guy.
Seems like of all the people who could possibly just
kind of ram this through, he'd be the most likely
to do it. I have to say, the guy that
Trump did pick doesn't have any track record of or
(12:44):
as far as I could find in a quick search
since the pick was announced, of talking about autonous vehicles.
And I would be skeptical that the Trump administration is
going to spend, you know, a ton of political capital
on this and and the other thing.
Speaker 3 (13:00):
Would it take a ton of political capital.
Speaker 2 (13:02):
So the Bloomberg story we published is really good. It
explains that they would there are some rules that they
could change, but they would need an Act of Congress
to to really you know, to really like make the
cyber cab happen on any kind of big scale. And
I think that the problem here, which was the problem
before Trump was elected, is that you can have the
(13:23):
best regulatory framework, the biggest, most beautiful, most glorious could
be like the toilet seat of mar A Lago equivalent
of regulatory frameworks, and you need a cyber cab, like
you need a working car to like make use of
these regulations. And again it's not totally clear that that
has happened. So again this all feels like very hypothetical.
(13:44):
We've got like, maybe there's going to be some kind
of thing that's that's going to happen to make Elon
Musk happy on the regulatory side. But then Tesla would
have to turn around and take advantage of it somehow.
Speaker 1 (13:53):
Right, it could actually backfire because you could no longer
blame regulatory approval for the delay. Like if they got
this fast track regulatory aprival, they'd have to like they'd
have to actually like start an operation.
Speaker 3 (14:09):
Dan.
Speaker 5 (14:10):
Next up the sun setting of EV tax rebates for
car buyers.
Speaker 1 (14:16):
Yeah, so the seventy five hundred dollars federal tax credit
for buying an electric vehicle has been a huge part
of the Inflation Reduction Act and really kind of encouraged
a lot of consumers who maybe weren't thinking about an
EV to buy a car. And the Trump administration has
floated about sunsetting that. Elon says that he's okay with that,
and I think that he's right in that Tesla, by
(14:38):
virtue of their volume and can do a lot with
pricing and they don't need the credits as much as
their rivals do because Tesla is already profitable. Now, would
losing the credit hurt their gross margin? Absolutely? But it's
really going to hurt rivals, and so you know, Elon
might be willing to kind of go ahead with this
(14:59):
because it would just allow Tesla's moat to get so
much better. I mean, you have like GM and Forward.
They poured so much money into trying to forecast the
EV market going forward, and they keep having to rewrite
their playbook and like scale back their ambitions, and it's
so frustrating for them because like with every administration things,
Wax and Wayne, whereas like Tesla is the dominant player
(15:19):
in the US, They're going to basically be able to
sort of you know, continue that moat and they still
get a lot of funding from the IRA for manufacturing,
for installing superchargers. I mean, I could see, you know,
Tesla just basically like the credit goes away, Tesla just
slashes prices, which we've seen Elon do in the past,
(15:40):
and like, I don't think that the credit is that
big of a deal, to be honest, I think that
Elon would be happy to see it go away.
Speaker 4 (15:46):
I guess I would point out that this is not
the only sort of industry or major tech company that
is almost pushing for more regulation or in this case,
you know, fewer benefits in order to benefit them. It's
sort of it's counterintuitive, right, So I would point out
that Meta, which owns Facebook, Instagram for years, has been saying, hey,
(16:06):
regulate us, regulate the tech, regulate the social networking industry.
And on the surface, you think, why would they ever
want more regulation?
Speaker 3 (16:14):
Right, this would hurt them?
Speaker 4 (16:15):
Well, it's because, as we pointed out, same with Tesla,
they're in such a dominant position that any regulation they
can deal with. They have the resources, they have the talent,
they have the time to deal with it easily. But
it will close the door for a number of competitors.
That will make it harder for competitors to catch.
Speaker 3 (16:32):
Up to them.
Speaker 4 (16:32):
Right, It's still a growing in somewhat new industry, the evs,
but like it's much more mature than when Elon started
this out right, So like there is a dominant player
which didn't exist when he was first going. And so
I think that's why this counter into a intuitive idea
actually makes a lot of sense for him.
Speaker 3 (16:48):
Max.
Speaker 5 (16:48):
Another thing that is helping Musk's empire is the idea
it's been floated or I guess Trump has said he
would like Brendan Carr to chair the FCC.
Speaker 3 (16:58):
Why is this positive for elinning.
Speaker 2 (17:00):
Brend And Carr is a long time Elon Musk fan,
and in particular he's expressed appreciation for Elon Musk in
all sorts of respects. But the FCC is an important
regulator for Starlink, which is a subsidiary of SpaceX. And
you know, one of Elon Musk's big frustrations with the
Biden administration is that there is a lot of money
(17:20):
for rural broadband internet and that money has not gone
to him. There are a couple of programs and car
has been very outspoken about the need.
Speaker 3 (17:31):
To change that.
Speaker 2 (17:32):
And I actually think this is the way, like much
more than autonomous vehicles or some of these other things
that rely on a lot of hypothetical car.
Speaker 3 (17:41):
This is a way.
Speaker 2 (17:42):
Yeah, this is like a way that Elon Musk can
put money directly towards his top line, you know, revenue
from the government to Starlink. And part of the reason
it's more plausible is because Elon Musk has like a
real plausible case for it.
Speaker 5 (17:57):
Yeah, That's what I was going to ask you. Is
there a good inmate case that starlink deserves that money?
Just as much as these other companies do.
Speaker 2 (18:03):
It's complicated. I've done I've done a little bit of
reporting on this, and there are there's some analysts out
there who have been looking at this and talking about
it as a possibility. Elon Musk's argument is essentially, the
satellites are going to get better, and no one really
knows how true that is or to what extent they're
going to get better. Are they going to get better enough?
And like that's kind of where the rubber meets the road.
But there is a case for satellites, like you could
(18:26):
roll these like give people starlinks. Is a lot cheaper
than laying out fiber. The question is like when you
try to do it on a mass scale, how does
that work? And I think the from a from a
sort of Elon point of view, he gets two things
out of this. One is potentially more revenue, but the
second is it slows down these traditional telecom operators that
(18:47):
we're counting on government subsidies for their own you know,
rollout of rural broadbands. So this is like a definite
win for Elon. I think it's I think Brendan Carr
is like the biggest win he's had so far, even
bigger than getting named as the co chair of DOGE,
and certainly better than these kind of you know, sort
(19:07):
of vague reports that the Trump administration is is you know,
sympathetic to autonomous vehicles, because because again we don't really know,
it's just a little hard to figure out how that
would benefit Elon, at least in the short term.
Speaker 1 (19:19):
The other thing I wanted to jump in on is
that Carr has advocated a ban on TikTok, citing national
security concerns because of China, and that could also benefit
Elon because you know, as X adds more video capacity,
they're really rivals with TikTok. So I think when we
look at all of these cabinet appointments, it's really important
to sort of think about how they benefit Musk not
(19:39):
just in one company, but sort of across all companies.
And Brendan Carr is going to go to the Space
Excellence today.
Speaker 4 (19:44):
Also, it should be noted I guess that Elon has
claimed he doesn't want a TikTok ban, right, He's sort
of like, hey, this is against free speech, this would
be a bad thing. But as Dana very smartly points out,
like he's saying that in reality, I think TikTok not
being in picture would ultimately benefit X. So he might
say he doesn't want it, but when push comes to shove,
(20:06):
I'm sure he'd happily you accept a lot more attention
coming towards X.
Speaker 5 (20:10):
Yeah, more on X in a moment, Max, thank you
very much for bringing up DOZE, the Department of Government Efficiency.
We are absolutely, dear listeners, gonna be talking more about
DOZE in coming weeks and months. But I want to
Dana before we move on to X, ask you this.
Max earlier had said that so far the Trump Musk
(20:30):
relationship seems to be holding up just fine, and that
indeed seems to be the case. But at the same time,
there are signs of fracture or at least tension emerging,
reports of insiders in the Trump team bristling at how
Musk is acting quote as a co president to Trump.
And I wonder if you feel like these are just
(20:52):
initial bumps in the road and the cost of doing
business with Trump, or a sign that things might come
to a head sooner rather than later.
Speaker 1 (21:00):
I think it's kind of bs to be honest. I mean,
the Trump team is famously leaky, right and right now,
You've got all these people in mar A Lago like
jockeying for position and jockeying for power, and like you know,
there's this whole like fight about who's going to be
the Treasury secretary in different camps or leaking things to
different things, and yeah, like oh, there was like a
(21:20):
dust up at a dinner with like boris what's his
name or like whatever, like Trump is going to the
SpaceX launch today, Like that is what matters. Like I
used to cover politics, and I just don't take these
kind of like thinly sourced reports in certain outlets that
seriously like Elon and Trump, I've been thickest thieves for
the past like six weeks, and until there's like a
(21:40):
real rupture, I just don't really buy it. I'm sure
that some like old school Trump loyalists are maybe bristling
at the fact that Elon is around, but like you're
seeing photographs of like Trump and Don Junior and the
Speaker of the House and RFK and Elon like all
on the plane Enan McDonald's together, there's no rupture. I've
(22:01):
always just been very skeptical of a lot of political
reput because that.
Speaker 3 (22:05):
Is fair, but Max.
Speaker 5 (22:06):
Trump has on a couple of occasions, including the clip
we played at the beginning of the show, he has
publicly started taking swipes at Eline.
Speaker 2 (22:13):
Yeah, I gotta agree with everything down said she.
Speaker 3 (22:15):
I'm sorry, David.
Speaker 2 (22:16):
I know, I know that's not what you want to hear.
But but here's the thing. Help, there are other there
are other constituencies within this transition who obviously have an
interest in marginalizing Elon, and and so and and there
there are other sources of power here. And and if
you just look at like the top line, like who's
at the McDonald's table, Like, I think that's a pretty
(22:37):
good indication. And what I will say is yes, in
the past and and we we get into this in
the episode that's Forthcoming of Citizen Elon. There have been
signs like this before where Trump is sort of preparing
to like shift someone and he will start making these
kind of cracks, right, and it's it's like a way
to kind of open the door. And maybe that's possible.
(22:59):
It could also be that it's a warning to Elon.
It's like, listen, you need to work with me, you know,
don't get too big for your breeches. It could also
be a signal to some other part of Trump's coalition
who he's trying to play Kate. We just like don't
know what is going on. And I really think there
are a lot of people who are like taking lessons
from the past Trump administration, which makes sense. But I
(23:21):
also think we need to look at Elon. And this
is not as much about to me anyway, This is
not as much about can Trump live in a world
where there's Elon Musk in his inner circle? It's can
Elon Musk be sufficiently subservient? And I think before this,
like last few months of political adventure with Elon, I
guess I would say no freaking way. But over the
(23:41):
last three months, Elon has proven himself willing to let
Trump lead. And until we see a difference, then you know,
I'm gonna assume that's going to continue.
Speaker 3 (23:50):
Okay, very good, Kurt.
Speaker 5 (23:56):
Let us talk about the Exodu users leaving X. Things
are going swimmingly, as we just stated, or at least
for the market values of many of his companies in
his empire, not so much right now. For X users
are leaving. Tell us what's going on.
Speaker 3 (24:13):
It's this weird.
Speaker 4 (24:15):
Sort of like Jekyl and hyde situation at X right now,
which is it is more politically and culturally important than
it has been since Elon bought the company, right like,
this is the most relevance X has had as a
social network and as a sort of distributor of Donald
Trump's agenda, news and information. At the same time, it
(24:38):
is probably maybe the weakest it has been from a
user standpoint, right because after the election, we saw all
of these people basically throwing in the towel on X
and saying I'm done with this place. And we've seen
that reflected in the numbers of two rivals, Meta's Threads
and Blue Sky, And with Blue Sky in particular, it's
(25:00):
been really interesting because Blue Sky's been around for a
couple of years. It had a lot of attention when
it first launched, and then it sort of went quiet
for a while. I think a lot of people were
just like, that's not it, that's not the place. We'll
just kind of let it sit over there. And it's
added I think it was at ten million users in September.
The week after the election, it added about one point
(25:20):
five million, and in the week since then, so you know,
week two after the election, I believe it's added about
five million users, and so it's now close to nineteen million,
up from ten million in September. As I mentioned, it's
almost doubled in size in just a couple of months.
And if you go to Blue Sky, I think the
most telling thing is that your feed is going to
(25:41):
be full of people basically saying, hey, I'm new here,
just came over from X, you know, leaving that place behind.
Tell me who to follow, tell me what to do,
like how do I use this thing? Like ha ha ha, Right,
But the idea being that all of these people are
migrating to a new network because they no longer want
to be associated with X. And so I think that
that is anecdotal, of course, but I think that, paired
(26:04):
with the rising user numbers, that these two competitors sort
of tells a picture that you know, X is having
a bit of a user user growth or user retention
issue at the moment.
Speaker 1 (26:14):
A Blue Sky has a lot of like high usage
people like Lizzo is now on Blue Sky, and epidemiologists
and climate scientists like all of my energy peeps have
moved to Blue Sky. And I think the other big
thing driving this is that X changed its term of service.
So as of November fifteenth, if you're using X, you're
basically allowing them to use your content to feed into
(26:37):
XAI and like language models. And so the change of
the terms of service is actually what kind of inspired
a lot of people to start not just like leaving X,
but like downloading their tweets and then like deleting them.
So that's like another interesting part of this is just
like people realizing that they don't want elon having their content,
(26:58):
And I mean, Max and I go back and forth
about this a lot. I struggle with my presence on
X because on the one hand, I feel like I
need to be there because that's now where the incoming
Trump administration is, like all the cabinet people like, that's
where like a lot of people who are now going
to be in power are posting. So I feel like
I have to at least lurk. But I have also
(27:18):
joined blue Sky. I hope you will find me there.
Speaker 3 (27:20):
Okay, I shall.
Speaker 1 (27:21):
We need an el in ink, We need an el
on ink starter pack.
Speaker 3 (27:24):
There we go.
Speaker 5 (27:25):
Some X is Blue Sky's gain, X's loss or are
there signs that indeed they are? For every one liberal
user that walks out the door. They are being replaced
by conservatives, conservative users. And even if that's not the case,
does it exactly matter for X. You've drilled into my
head in recent weeks that we need to rethink our
(27:46):
understanding of X and its role and the Musk Empire.
Speaker 2 (27:49):
Yeah, I mean both things can be true. Like Chrit said,
like he's right, X has never been more relevant, at
least not in the last five years than it is today.
And we don't know what the value of X is think,
Like we talked about this on the last episode, like
the models of Elon's net worth rely on fidelities mark down.
If I were a shareholder of X, I would be
marking that way the hell up because clearly, you know,
(28:13):
association with Elon amid a Trump administration, whether or not
it translates to actual you know, business, is valuable according
to the market. After the election, we saw all of
these CEOs, guys who had kind of been on the fence,
you know, go and sort of kiss the ring to Trump,
and they all did it on X, right. They all
Satyad Della Sun Dhar Pachai, Jeff Bezos, like all the
(28:37):
all the sort of tech guys who wanted to kiss
up to Donald Trump, went on X. They called him
President Trump even though he's president elect, and they and
of course they did it on Elon Musk's platform, and
so clearly it's it's like the Trump Hotel of social networks. Like,
if you want to if you want to be in
this orbit, you got to be there. And I think
and even even saying that probably understates it, because like
(28:58):
it is a really important piece of the right wing
media ecosystem right now, maybe the most important piece. But
what I'll say is, and like right wing media has
always relied on this relationship with quote unquote mainstream media,
and what X had going for it before the election
was you still had a lot of mainstream journalists there,
(29:18):
You had a lot of mainstream news organizations. Despite the
fact that Elon Musk, the owner and now key advisor
to the to the president elect, is going out there
every day saying really bad things about media, saying that
they're they're the opposition, they're terrible, and you know, cut
doing making tweaks algorithmically into the business that are harming
those companies' business. It's really only a matter of time
(29:40):
before mainstream media outlets try to find a different outlet,
and I think what we're seeing now is is some
of that happening some of these You have a lot
of journalists, a lot of media outlets suddenly like paying
attention to Blue Sky. And if that happens in a
big way and X doesn't respond, that I think will
hurt X in the LNE long run. Because conservative media,
(30:02):
as much as it is its own ecosystem, as much
as it is, there is a big audience there. Part
of what makes the most successful conservative media plays work
is that they're able to kind of straddle both sides
of it, but both the like hardcore activists as well
as kind of the middle the kind of mainstream audience.
Speaker 3 (30:19):
Could I just add real quickly.
Speaker 4 (30:20):
I mean, there's this idea that like, oh, is X
going to be relevant if it's just right leaning sort
of Trump fans without you know, liberal folks to poke
and prod or whatever. Right Like We've heard that for
kind of years. I would point you to truth social, right, Like,
what is truth social? It is right leaning Trump supporters
(30:40):
without anybody to really poke and prod. And I would
argue truth social other than basically being a glorified way
for Trump to release press releases has almost no relevance
in general kind of modern Internet culture, right like it
is truly just like Trump Press release two point zero service.
And so I do think for X to stay relevant,
(31:02):
they need they they sort of need, you know, people
from from both sides of this political spectrum to care
about what's happening on this service, because otherwise it does
become very kind of echo chamber isolated. And I'm just
not sure that it's going to jump off the Internet
onto television and radio and podcasts in the way that
it has historically if it becomes very very one sided.
Speaker 1 (31:24):
Max.
Speaker 5 (31:24):
So, one thing I've learned over decades covering finance is
that marks, when you're marking the value of a private asset,
not a publicly traded asset, private marks are a dark art. Okay,
they are a dark art. And so if you know
what if you have, if you happen to have a
little cut of that, you know, stock and X, and
you want to mark it up, go ahead, man mark
(31:45):
that thing up.
Speaker 2 (31:46):
I do think, like combo of Trump being president and
the meme the stock market where it is, it's not
out of the realm of possibility that X could return
to the public markets one day and even return at
evaluation that might be at least much higher than it's
current super depressed in.
Speaker 3 (32:04):
The abstract, That does seem plausible.
Speaker 5 (32:06):
But Kurt, are there any signs of any kind that
there's any buzz among the banker investing community that man,
let me get my hands on some of them X shares.
Speaker 3 (32:16):
So I agree with Max.
Speaker 4 (32:18):
I think when Fidelity comes out with its next report,
which will probably get to go up three weeks from
now or whatever, we can talk about when it does,
I wouldn't be I would be shocked if the value
is an up right, if it isn't up noticeably, only because,
as Max pointed out, being associated with Elon and therefore
being associated with Trump tends to signal we think, you know,
we're a buyer of this type of thing. At the
(32:40):
same time, if I'm Elon and X, the last thing
I think I want to do is go public right
now and expose for the businesses. Yeah, but I think
you know, this is not a strong business. I continue
to firmly believe that this is not a good business,
right like it is a good cultural weapon in some
(33:02):
in some ways for Elon and Trump. But you know,
there was a report, David.
Speaker 3 (33:06):
You may have seen.
Speaker 4 (33:07):
Last week that all of these big blue chip advertisers
had returned. I wrote some of them down. It was
like IBM, Disney, Comcast, Warner Brothers, and it was like, oh,
they're no longer paused. They're spending on X again, Like
this is huge. And then you look into the report,
all of those companies combined spent three point three million
dollars on advertising over nine months. It was down ninety
(33:28):
eight percent from twenty twenty three. So my point being
is that even though they're trying to create.
Speaker 3 (33:34):
Like wait a minute, well what about the cheach and
chong gummies? What about then? Tell me about the cheaching
chong gum, you are single handedly keeping those guys afloat. David.
We've talked about this. You need to stop those place chechicheng.
Speaker 4 (33:48):
I feel like I'll get off my soapbox here, but
I just feel like the idea that this is a
strong business is yet to be Maybe I will be wrong,
and we've all been proven wrong by Elon at one
point or another, and this will be my big hill
that I die on.
Speaker 3 (34:04):
But I don't believe right.
Speaker 4 (34:06):
Now that this is a very strong business and it's
not something you would want to say, Hey, let's open
up our books, let's go public, let's let investors get
a look at how this is actually going, because I
don't think it would go down with that.
Speaker 5 (34:15):
I think then indeed the company has much greater value
for Elon and his empire as a private, small, private
entity within it that does access it to media.
Speaker 3 (34:26):
Arm I am.
Speaker 5 (34:27):
Being told by our producer Magnus that we are skipping.
Speaker 3 (34:31):
The feud or skipping the feud we don't have time
for it.
Speaker 4 (34:34):
Sounds like there is a feud you and the producers.
Speaker 5 (34:36):
We have to let every once in a while we
have to listen to Magnus, Kurt, Dana, Max, thank you
very much for joining.
Speaker 4 (34:43):
Great to be here, Thanks for having us.
Speaker 1 (34:44):
Always a pleasure.
Speaker 3 (34:52):
This episode was produced by Stacy Wong.
Speaker 5 (34:54):
Anna Masarrakas is our editor and Rayhan Harmancier, senior editor.
The idea for this every show also came from Rayhon
Blake Maple's Handles Engineering and Emma Sanchez fact checks. Our
supervising producer is Magnus Henrickson.
Speaker 3 (35:09):
The Elon Inc.
Speaker 5 (35:10):
Theme is written and performed by Taka Yasuzawa and Alex Sugijira,
Brendan Francis Newnham is our executive producer, and Sage Bauman
is ahead of Bloomberg Podcasts. A big thanks as always
to our supporters Joe Weber and Brad Stone.
Speaker 3 (35:24):
I'm David Papadopoulos.
Speaker 5 (35:26):
If you have a minute, rate and review our show,
it'll help other listeners find us. See you next week.
Thanks for listening to the Elon Inc. Podcast. If you
never want to miss a story, become a Bloomberg dot
com subscriber today. Check out our special intro offer right
(35:46):
now at Bloomberg dot com Backslash Podcast Offer or click
the link in the show notes. You'll also unlock deep
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Host
David Papadopoulos
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