Bloomberg Audio Studios, podcasts, radio news. Let me tell you we have a new star. A star is born.

Bloomberg Audio Studios, podcasts, radio news. Let me tell you we have a new star. A star is born.

Elon comes up on Mars Juson Kennemy.

Elon comes up on Mars Juson Kennemy.

He is the Thomas Edison plus plus plus of our age.

He is the Thomas Edison plus plus plus of our age.

Probably his whole life is from a position of insecurity.

Probably his whole life is from a position of insecurity.

I feel for the guy. I would say ninety eight percent really appreciate what he does.

I feel for the guy. I would say ninety eight percent really appreciate what he does.

But those two percent that are nasty, they are up in fourth post.

But those two percent that are nasty, they are up in fourth post.

We are meant for great things in the United States of America, and Elon reminds us of that we don't have a fourth branch of governments called Elon Musk. Welcome to elan Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday, April twenty second. I'm your host, David Papadopoulos, now sometimes lost in the shuffle of all things Elon is one of his most high tech and potentially consequential companies, Neuralink. Last year, the company managed to insert a chip in the brain of a paralyzed man that allows him, to, among other things, move the pieces of an online chessboard just by thinking, which is pretty cool. The company has big Glance for twenty twenty five and is trying to move fast in an industry that is quickly heating up. So I asked Sarah Friar, longtime regular on this show, to hop on and catch us all up on the race to control human brain waves. But first, it's Tesla earnings day. Now, I know, I know it can often seem like every Tesla earnings call is a do or die moment for Elon, but this one really does feel big, with Doze a lightning rod of controversy, Tesla's sales and stock price sinking, and global protest raging. Even longtime Tesla bulls are worried, very worried that permanent damage has been done to the brand. So when Elon takes the mic this evening, the stakes will be very high to talk about what to expect from the earnings report and the call, and what Elon can and cannot achieve on it. I'm sitting here with our regulars, Max Chafkin and Dana Hull. Max Elo to you, sir, Hello David, Hey Danna, Hello again, Hey Danna. So Dana. I will note that as I was being the good Bloomberg employee, I am working hard at night Sunday night, I saw a story with the headline drop Tesla bull calls Code Red saying Musk needs to leave Doge, this is our good friend, the bull of bulls. Dan ives the man who is to Tesla bulls what Max Chafkin is to mets fandom. Okay, and you have him quoted in here from his report, Danna saying Tesla is Musk, and Musk is Tesla, and anyone thinks the brand damage Musk has inflicted is not a real thing, just spend some time speaking to car buyers in the US, Europe and Asia. Then, Dana, just minutes before we came up to record this show, you dropped this piece. Treasurers of eight US states, including California and Illinois, shot a letter to the Tesla board that essentially says, Hey, Tesla board, the company is driverless. There are no driverless cars, but we do have a driver less company. Where's the CEO? Why aren't you bringing the CEO to heal? So it strikes me that on the cusp of this earnings call, the mood is getting bleaker by the minute.

We are meant for great things in the United States of America, and Elon reminds us of that we don't have a fourth branch of governments called Elon Musk. Welcome to elan Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday, April twenty second. I'm your host, David Papadopoulos, now sometimes lost in the shuffle of all things Elon is one of his most high tech and potentially consequential companies, Neuralink. Last year, the company managed to insert a chip in the brain of a paralyzed man that allows him, to, among other things, move the pieces of an online chessboard just by thinking, which is pretty cool. The company has big Glance for twenty twenty five and is trying to move fast in an industry that is quickly heating up. So I asked Sarah Friar, longtime regular on this show, to hop on and catch us all up on the race to control human brain waves. But first, it's Tesla earnings day. Now, I know, I know it can often seem like every Tesla earnings call is a do or die moment for Elon, but this one really does feel big, with Doze a lightning rod of controversy, Tesla's sales and stock price sinking, and global protest raging. Even longtime Tesla bulls are worried, very worried that permanent damage has been done to the brand. So when Elon takes the mic this evening, the stakes will be very high to talk about what to expect from the earnings report and the call, and what Elon can and cannot achieve on it. I'm sitting here with our regulars, Max Chafkin and Dana Hull. Max Elo to you, sir, Hello David, Hey Danna, Hello again, Hey Danna. So Dana. I will note that as I was being the good Bloomberg employee, I am working hard at night Sunday night, I saw a story with the headline drop Tesla bull calls Code Red saying Musk needs to leave Doge, this is our good friend, the bull of bulls. Dan ives the man who is to Tesla bulls what Max Chafkin is to mets fandom. Okay, and you have him quoted in here from his report, Danna saying Tesla is Musk, and Musk is Tesla, and anyone thinks the brand damage Musk has inflicted is not a real thing, just spend some time speaking to car buyers in the US, Europe and Asia. Then, Dana, just minutes before we came up to record this show, you dropped this piece. Treasurers of eight US states, including California and Illinois, shot a letter to the Tesla board that essentially says, Hey, Tesla board, the company is driverless. There are no driverless cars, but we do have a driver less company. Where's the CEO? Why aren't you bringing the CEO to heal? So it strikes me that on the cusp of this earnings call, the mood is getting bleaker by the minute.

This is all true, and at the same time, like I feel like I'm in groundhog Day because I have been at this very point countless other times, like most recently when Musk bought Twitter, which is now called X And like the board and these pension funds and these states like all went through the same exercise. So it's like, I don't want to downplay the severity of the crisis that Tesla is in, just want a table set by saying that I have been here before. And typically what happens is things are dire. Investors are upset. There's all this like scrambling. People are like, why doesn't Tesla have a COO or a president? What's the succession plan? Why doesn't Elon ever focus on this company? And then he pulls something out of a hat and he gives investors enough to be excited about, whether it's AI or the ROBOTAXI or his end to end neural nets or whatever that like they get like excited again about the rosy future. And so once again we're coming into an earnings call where, yes, like sales in the first quarter were terrible, gross margins are going to be terrible. Free clash flow is something to look at, but like investors already know that it's a terrible quarter. So what's going to be important is Elon's tone on the call, and Max and I often like text each other like, oh today we have dire Elon.

This is all true, and at the same time, like I feel like I'm in groundhog Day because I have been at this very point countless other times, like most recently when Musk bought Twitter, which is now called X And like the board and these pension funds and these states like all went through the same exercise. So it's like, I don't want to downplay the severity of the crisis that Tesla is in, just want a table set by saying that I have been here before. And typically what happens is things are dire. Investors are upset. There's all this like scrambling. People are like, why doesn't Tesla have a COO or a president? What's the succession plan? Why doesn't Elon ever focus on this company? And then he pulls something out of a hat and he gives investors enough to be excited about, whether it's AI or the ROBOTAXI or his end to end neural nets or whatever that like they get like excited again about the rosy future. And so once again we're coming into an earnings call where, yes, like sales in the first quarter were terrible, gross margins are going to be terrible. Free clash flow is something to look at, but like investors already know that it's a terrible quarter. So what's going to be important is Elon's tone on the call, and Max and I often like text each other like, oh today we have dire Elon.

Or oh no, he's actually embulent Elon.

Or oh no, he's actually embulent Elon.

And I think the big question is he going to say in his prepared remarks his time at Doze is coming to an end? Or are any of the cell side analysts actually gonna have the balls to ask him when he's coming back, or or are they going to avoid it completely like that is the elephant in the room, Like the brand damage is all because of his work.

And I think the big question is he going to say in his prepared remarks his time at Doze is coming to an end? Or are any of the cell side analysts actually gonna have the balls to ask him when he's coming back, or or are they going to avoid it completely like that is the elephant in the room, Like the brand damage is all because of his work.

With Doje and Max, that is true that there's always been some sort of rabbit in the hat that Elon has been able to pull out in these earnings calls and hey, look over here, don't mind the fundamentals or this or that. Look at what's coming in three months, six months, twelve years, thirty years. That's what you should be excited about. My question is, given what we've seen in the last few months and the state of affairs there at Tesla, are those rabbits gonna work Unless the rabbit is I. Elon musk Am leaving Doge in the next twenty four hours and I will start paying it, really paying attention to Tessel, along with SpaceX and XAI and neuralink and all these other things. But no, I'm really doing that. I'm really leaving doge. Okay, that would be a hell of a rabbit. Do the other rabbits work Right now, I.

With Doje and Max, that is true that there's always been some sort of rabbit in the hat that Elon has been able to pull out in these earnings calls and hey, look over here, don't mind the fundamentals or this or that. Look at what's coming in three months, six months, twelve years, thirty years. That's what you should be excited about. My question is, given what we've seen in the last few months and the state of affairs there at Tesla, are those rabbits gonna work Unless the rabbit is I. Elon musk Am leaving Doge in the next twenty four hours and I will start paying it, really paying attention to Tessel, along with SpaceX and XAI and neuralink and all these other things. But no, I'm really doing that. I'm really leaving doge. Okay, that would be a hell of a rabbit. Do the other rabbits work Right now, I.

Think it's getting harder to see what he could say, because, as Dana is saying, like for years now, he has been trying to spin the story forward towards driverless cars, towards humanoid robots, towards giant supercomputers or whatever, and like at a certain point there's the like, okay, like show me the money, show me the driverless car. I mean, Tesla's shareholders have been very patient with Elon Musk, and I think, like there's no reason to think that their patience is gonna instantly zap that Kathy Wood and her Ilk, who have been basically counting on the Robotaxi to create this enormous, you know, multi trillion dollar economy that will essentially like replace the entire auto industry. Like, I don't think enough has changed to cause them to doubt that thesis. So I think it is more likely that we're gonna hear more of the same from Elon Musk, he's going to talk about the Austin Robotaxi like they are framing this as an earnings call and a company update. Like my prediction is that the company update is just it's kind of the thing we know about. It's that there there's gonna be some sort of Robotaxi trial in Austin in June soon. And I think you're absolutely right, David, that if Elon Musk said now, the way I think you framed it is not how.

Think it's getting harder to see what he could say, because, as Dana is saying, like for years now, he has been trying to spin the story forward towards driverless cars, towards humanoid robots, towards giant supercomputers or whatever, and like at a certain point there's the like, okay, like show me the money, show me the driverless car. I mean, Tesla's shareholders have been very patient with Elon Musk, and I think, like there's no reason to think that their patience is gonna instantly zap that Kathy Wood and her Ilk, who have been basically counting on the Robotaxi to create this enormous, you know, multi trillion dollar economy that will essentially like replace the entire auto industry. Like, I don't think enough has changed to cause them to doubt that thesis. So I think it is more likely that we're gonna hear more of the same from Elon Musk, he's going to talk about the Austin Robotaxi like they are framing this as an earnings call and a company update. Like my prediction is that the company update is just it's kind of the thing we know about. It's that there there's gonna be some sort of Robotaxi trial in Austin in June soon. And I think you're absolutely right, David, that if Elon Musk said now, the way I think you framed it is not how.

He would do it.

He would do it.

What he would do is he would declare victory. He would say, you know, we've successfully remade the government.

What he would do is he would declare victory. He would say, you know, we've successfully remade the government.

We brought the bureaucrats down.

We brought the bureaucrats down.

Now I feel like it's safe to go back to Tesla. I don't know that he is ready to do that. I haven't seen a lot of signs that he is withdrawing from Trump. It does seem like Trump World is maybe attempting to put a little bit of distance between itself and Elon. But I'm not sure Elon is ready to quit Trump. And at the end of the day, I don't know that Trump is ready to quit Elon.

Now I feel like it's safe to go back to Tesla. I don't know that he is ready to do that. I haven't seen a lot of signs that he is withdrawing from Trump. It does seem like Trump World is maybe attempting to put a little bit of distance between itself and Elon. But I'm not sure Elon is ready to quit Trump. And at the end of the day, I don't know that Trump is ready to quit Elon.

A couple of things I want to mention. You know, the macro environment is crappy. I mean, treasury yields are rising, the stock market is tanking, like we're everyone is talking about a recession. This tariff policy that has everyone super confused is not good. And Tesla is not immune from tariffs. I mean they import a lot of their supply chain, including their LFP batteries come from China. So that's like a whole other thing that is weighing on the stock besides Elan and DOEZ. It's just like the macro environment is awful. Interest rates are still really high. People typically do not buy cars when interest rates are high and when people are losing their jobs left and right. So that's like a whole other thing is is the tariff implication. But then there's also just continuing, continuing market confusion about this idea that Tesla is going to come out with a cheaper car like Ed Ludlow and I reported a year ago that there really is no cheaper car. Like the quote unquote cheaper mass market car is maybe like a cheaper version of the Model Y and the Model three that's like lower range decontent, but like there's no new model. And you know, a couple of quarters ago, Tesla said, oh, we're going to be making this cheaper car in the first half of the year. Now, Reuter's had a history out saying that that has been delayed, but it's like, of course it's delayed, like it's not really a new model. So I just think that Tesla picked very clearly, like a year ago, that like the future is AI autonomy, robots and not high volumes.

A couple of things I want to mention. You know, the macro environment is crappy. I mean, treasury yields are rising, the stock market is tanking, like we're everyone is talking about a recession. This tariff policy that has everyone super confused is not good. And Tesla is not immune from tariffs. I mean they import a lot of their supply chain, including their LFP batteries come from China. So that's like a whole other thing that is weighing on the stock besides Elan and DOEZ. It's just like the macro environment is awful. Interest rates are still really high. People typically do not buy cars when interest rates are high and when people are losing their jobs left and right. So that's like a whole other thing is is the tariff implication. But then there's also just continuing, continuing market confusion about this idea that Tesla is going to come out with a cheaper car like Ed Ludlow and I reported a year ago that there really is no cheaper car. Like the quote unquote cheaper mass market car is maybe like a cheaper version of the Model Y and the Model three that's like lower range decontent, but like there's no new model. And you know, a couple of quarters ago, Tesla said, oh, we're going to be making this cheaper car in the first half of the year. Now, Reuter's had a history out saying that that has been delayed, but it's like, of course it's delayed, like it's not really a new model. So I just think that Tesla picked very clearly, like a year ago, that like the future is AI autonomy, robots and not high volumes.

So but that's another thing that people are going to be looking for.

So but that's another thing that people are going to be looking for.

They've achieved that the volumes are going down fast, and they're one new rollout, the cyber truck, which you know, it's funny. We have mentioned on the show that it hasn't gotten off to a roaring start, but I guess it was only this morning that I saw the actual numbers. And you guys feel free to yell at me if you've said these numbers on the show and I just failed to properly pay attention. But apparently Cox Automotive estimates that cyber truck sales dropped f fifty percent first quarter versus fourth quarter. Now, I know there's some you know, imperfections about doing a quarter on quarter comparison like that, but still, Jesus Christ, I mean, come on, you should be they should be ramping up wildly right.

They've achieved that the volumes are going down fast, and they're one new rollout, the cyber truck, which you know, it's funny. We have mentioned on the show that it hasn't gotten off to a roaring start, but I guess it was only this morning that I saw the actual numbers. And you guys feel free to yell at me if you've said these numbers on the show and I just failed to properly pay attention. But apparently Cox Automotive estimates that cyber truck sales dropped f fifty percent first quarter versus fourth quarter. Now, I know there's some you know, imperfections about doing a quarter on quarter comparison like that, but still, Jesus Christ, I mean, come on, you should be they should be ramping up wildly right.

Well, they've had a lot of recalls of the cyber truck, and the cyber truck is still expensive. And the fourth quarter is always the big quarter because you know there's a big sort of end of the year push. But yeah, no, the cyber truck is a I mean, cyber truck is not a big selling you're about to.

Well, they've had a lot of recalls of the cyber truck, and the cyber truck is still expensive. And the fourth quarter is always the big quarter because you know there's a big sort of end of the year push. But yeah, no, the cyber truck is a I mean, cyber truck is not a big selling you're about to.

Say disaster that you were going to say disaster. Is it a disaster, Dana Hall.

Say disaster that you were going to say disaster. Is it a disaster, Dana Hall.

But the other thing that I think so funny is that the cyber truck, of all the cars and Tesla's line up, is like the epitome of Elon Musk himself. So that's why you're seeing like dog walkers in Brooklyn leaving their like you know, bags on the car of the truck where it is the epitome of Elon himself because he wanted this thing. His other executives wanted, like you know, to go high volume. Like the cyber truck is Elon, and Elon is the cyber truck. So as much as the backlash is impacting the brand, it is that vehicle that is that is burying the front of it.

But the other thing that I think so funny is that the cyber truck, of all the cars and Tesla's line up, is like the epitome of Elon Musk himself. So that's why you're seeing like dog walkers in Brooklyn leaving their like you know, bags on the car of the truck where it is the epitome of Elon himself because he wanted this thing. His other executives wanted, like you know, to go high volume. Like the cyber truck is Elon, and Elon is the cyber truck. So as much as the backlash is impacting the brand, it is that vehicle that is that is burying the front of it.

It's the new Elon. It's the it's the trolling, social media addicted you know, hyper partisan Trump supporter version of Elon. Of course, like the Model three is also Elon. I mean that, And that is the thing that like is so weird about what has happened. Like Tesla was able to break the mold essentially for an automaker in a bunch of different ways, and and one of the things that had going for it was Elon Musk and the brand that he has like cultivated around himself. And what we've seen is like taking that asset, that thing that.

It's the new Elon. It's the it's the trolling, social media addicted you know, hyper partisan Trump supporter version of Elon. Of course, like the Model three is also Elon. I mean that, And that is the thing that like is so weird about what has happened. Like Tesla was able to break the mold essentially for an automaker in a bunch of different ways, and and one of the things that had going for it was Elon Musk and the brand that he has like cultivated around himself. And what we've seen is like taking that asset, that thing that.

Made Tesla special and made it so successful and throwing it in the wood chipper along with USAID and you know, and other parts of the federal government.

Made Tesla special and made it so successful and throwing it in the wood chipper along with USAID and you know, and other parts of the federal government.

Now, one thing we haven't mentioned yet is optimists going to space or are we going to get a lot of optimist talk on this call? Optimist the robot.

Now, one thing we haven't mentioned yet is optimists going to space or are we going to get a lot of optimist talk on this call? Optimist the robot.

Oh yeah, come on sure.

Oh yeah, come on sure.

I mean, hey, Musk says that Optimist is going to go to Mars on starship by like the end of next year, and he's very excited about Optimists.

I mean, hey, Musk says that Optimist is going to go to Mars on starship by like the end of next year, and he's very excited about Optimists.

I mean that is like.

I mean that is like.

I think on the last call you talked about optimists more than the ROBOTAXI. So yeah, I'm sure we'll get an optimist update.

I think on the last call you talked about optimists more than the ROBOTAXI. So yeah, I'm sure we'll get an optimist update.

You know.

You know.

The other thing that I think is just so weird about the earnings calls and Max and I have listened to like so many of them over the years, is that they never introduced who the other executives are, so like, I'm always right, I'm.

The other thing that I think is just so weird about the earnings calls and Max and I have listened to like so many of them over the years, is that they never introduced who the other executives are, so like, I'm always right, I'm.

Always in ode.

Always in ode.

Never they never say and now we're gonna hear from you know, like so and so who leads like autopilot software, like Elon talks and then like some other random executive.

Never they never say and now we're gonna hear from you know, like so and so who leads like autopilot software, like Elon talks and then like some other random executive.

Pipes, you ain't Elon Musk, You're just you're just a sidekick, an anonymous, faceless sidekick.

Pipes, you ain't Elon Musk, You're just you're just a sidekick, an anonymous, faceless sidekick.

I mean, like multiple chats and everyone's like who's speaking, And I'm like, you know, this sounds like Lars. Oh no, it's not, that's Franz like whatever. You know, so we don't bother introducing the other executives. And then even if the other executives talk, Elon talks over them and interrupts them. It's just like it's unlike any other earnings call.

I mean, like multiple chats and everyone's like who's speaking, And I'm like, you know, this sounds like Lars. Oh no, it's not, that's Franz like whatever. You know, so we don't bother introducing the other executives. And then even if the other executives talk, Elon talks over them and interrupts them. It's just like it's unlike any other earnings call.

That you've ever listened to.

That you've ever listened to.

And it's like, I'm so Max and I are so used to it because we usually play bingo, But like if you've never listened to a Tesla earnings call. You really should. It will give you a lot of insight into how these things go. And it's also just frankly like so disappointing. I mean, could I say this on a Bloomberg show. Like the Shell side analysts, they're all about their trying to perfect their models. They don't actually ask the hard questions. The best person who really would try to nail Elon on particulars was Tony Sacandagia Bernstein, and he retired.

And it's like, I'm so Max and I are so used to it because we usually play bingo, But like if you've never listened to a Tesla earnings call. You really should. It will give you a lot of insight into how these things go. And it's also just frankly like so disappointing. I mean, could I say this on a Bloomberg show. Like the Shell side analysts, they're all about their trying to perfect their models. They don't actually ask the hard questions. The best person who really would try to nail Elon on particulars was Tony Sacandagia Bernstein, and he retired.

But Van Ives has worked up as he is right now, goes out and grills Elon with a tough question or two.

But Van Ives has worked up as he is right now, goes out and grills Elon with a tough question or two.

He's never He's almost never gets called on to ask the questions.

He's never He's almost never gets called on to ask the questions.

Okay, okay, Max, we need to wrap up here on Tesla, but let me ask you this before we do. Uh Test has been saying, this isn't just a quarterly earnings report, it's a company update. Are they're already starting to spin us here? We got some big grand reveal.

Okay, okay, Max, we need to wrap up here on Tesla, but let me ask you this before we do. Uh Test has been saying, this isn't just a quarterly earnings report, it's a company update. Are they're already starting to spin us here? We got some big grand reveal.

I mean I think he needs given how poor we're expecting the earnings to be, given how bad the sales have been, I think he's going to be looking for some way, as we've been talking about, to spin this forward. And I think that company update it could be as as Danna said, an update about the way that the CEO is spending his time, although again I'm not I kind of doubt it that it could be an update about Rubotaxi efforts in Austin, and or it could be about something further down the pipe. And I think you asked Anna about optimists. It is certain he will bring up optimists because what Elon Musk has done always has done, is has found ways to sort of push the camera out like the focal point way into the future to this like really optim mystic future. And at this point, like robotaxis are kind of real, and they're also kind of obviously underwhelming. And so you know, Weimo has been doing the thing that Elon Musk has has been promising for years and at last I checked, it hasn't created a thirty trillion dollar industry. So like, as we get closer to the actual rollout of the robotaxi whatever it is, and I promise you it's not going to be a coast to coast, it's not going to be like, really a robotax is going to be like Weimo or something in one city which has been happening for years and years. So Elon's going to have to find some other way to keep that focal point in the future. And I think, you know, Humanoi wrote a robots probably what it is?

I mean I think he needs given how poor we're expecting the earnings to be, given how bad the sales have been, I think he's going to be looking for some way, as we've been talking about, to spin this forward. And I think that company update it could be as as Danna said, an update about the way that the CEO is spending his time, although again I'm not I kind of doubt it that it could be an update about Rubotaxi efforts in Austin, and or it could be about something further down the pipe. And I think you asked Anna about optimists. It is certain he will bring up optimists because what Elon Musk has done always has done, is has found ways to sort of push the camera out like the focal point way into the future to this like really optim mystic future. And at this point, like robotaxis are kind of real, and they're also kind of obviously underwhelming. And so you know, Weimo has been doing the thing that Elon Musk has has been promising for years and at last I checked, it hasn't created a thirty trillion dollar industry. So like, as we get closer to the actual rollout of the robotaxi whatever it is, and I promise you it's not going to be a coast to coast, it's not going to be like, really a robotax is going to be like Weimo or something in one city which has been happening for years and years. So Elon's going to have to find some other way to keep that focal point in the future. And I think, you know, Humanoi wrote a robots probably what it is?

Well, well, this is now truly the last thought I will leave you guys with on this that our good friend of the pod, Esha Day, and her piece previewing the earnings this morning had a quote from somebody saying, because the stock, as much as Tesla's stock is, it's still trades at seventy eight times forward earnings, which for those who aren't familiar with that metric, it's an incredible a lot of times for forward earnings. And the quote from this one investor is of all the stocks and the Magnificent seven, the tech stocks in Meg seven, it is Tesla whose valuation is almost entirely about the future. Basically, Max the stock is bulled ah.

Well, well, this is now truly the last thought I will leave you guys with on this that our good friend of the pod, Esha Day, and her piece previewing the earnings this morning had a quote from somebody saying, because the stock, as much as Tesla's stock is, it's still trades at seventy eight times forward earnings, which for those who aren't familiar with that metric, it's an incredible a lot of times for forward earnings. And the quote from this one investor is of all the stocks and the Magnificent seven, the tech stocks in Meg seven, it is Tesla whose valuation is almost entirely about the future. Basically, Max the stock is bulled ah.

And that's the thing, like it could be.

And that's the thing, like it could be.

I think one of the big sort of like misunderstandings of Elon Musk's support for Donald Trump is this sense that like he was coming from a place of strength, and of course he was, he's the world's richest man.

I think one of the big sort of like misunderstandings of Elon Musk's support for Donald Trump is this sense that like he was coming from a place of strength, and of course he was, he's the world's richest man.

But in other ways this is a company that.

But in other ways this is a company that.

Has always kind of been teetering, and it's always halfway between you know, taking over the world and like wildly underperforming expectations. And that's why Dana people like Dana me are a little bit like, you know, like why it's hard to get ex excited about anyone calls like, oh, this is going to be I mean, we are excited because this is our super Bowl, but you know, we see this movie every three months, so so like yeah, like I don't think this is going to be the thing that does Elon as CEO of Tesla like you know, but but on the other hand.

Has always kind of been teetering, and it's always halfway between you know, taking over the world and like wildly underperforming expectations. And that's why Dana people like Dana me are a little bit like, you know, like why it's hard to get ex excited about anyone calls like, oh, this is going to be I mean, we are excited because this is our super Bowl, but you know, we see this movie every three months, so so like yeah, like I don't think this is going to be the thing that does Elon as CEO of Tesla like you know, but but on the other hand.

I don't know.

I don't know.

We we live in we live in crazy times.

We we live in we live in crazy times.

I just want to say one thing, Nothing will compare as crazy.

I just want to say one thing, Nothing will compare as crazy.

As now is with Trump.

As now is with Trump.

Nothing will compare to twenty eighteen, which, lest I remind you, is the year that Tesla struggled to ramp up the model three. Yes, Elon tried to take the company private through the four to twenty thing. He smoked pot with Joe Rogan. He called the tie Cave Rescuer a pedo guy. Executives are quitting left and right, like in real time, including the chief accounting officer. Like I like that that would be for me is is twenty eighteen.

Nothing will compare to twenty eighteen, which, lest I remind you, is the year that Tesla struggled to ramp up the model three. Yes, Elon tried to take the company private through the four to twenty thing. He smoked pot with Joe Rogan. He called the tie Cave Rescuer a pedo guy. Executives are quitting left and right, like in real time, including the chief accounting officer. Like I like that that would be for me is is twenty eighteen.

Those are all good points to which you know, I would say so Max, at the time that Dan is describing, maybe truly the company was teetering. It was trying to scale up and get to to where it is now. I don't think the company is teetering so much now. I think it's not. When you it's not.

Those are all good points to which you know, I would say so Max, at the time that Dan is describing, maybe truly the company was teetering. It was trying to scale up and get to to where it is now. I don't think the company is teetering so much now. I think it's not. When you it's not.

Still have a car company, yeah right, What you have is a stock right that is just incredibly valued even after a fifty percent drop.

Still have a car company, yeah right, What you have is a stock right that is just incredibly valued even after a fifty percent drop.

That's the you know, the big question. So when I said, I should also reframe it. The stock is in bulk, but boy, there's a lot of hocus pocus there. Yeah.

That's the you know, the big question. So when I said, I should also reframe it. The stock is in bulk, but boy, there's a lot of hocus pocus there. Yeah.

Yeah, the Tesla the business is has a very good business and drinking. But the stock, yeah yeah, Tesla. The stock though, as you're saying, as ESA's saying, like it it is entirely a lot of that value is is about is about the future and about assumptions that the market has made and that I'm not totally sure like why like what like what the what whether there's much of a basis in reality for those those assumptions.

Yeah, the Tesla the business is has a very good business and drinking. But the stock, yeah yeah, Tesla. The stock though, as you're saying, as ESA's saying, like it it is entirely a lot of that value is is about is about the future and about assumptions that the market has made and that I'm not totally sure like why like what like what the what whether there's much of a basis in reality for those those assumptions.

Dana, thank you as always, Thanks thank you. Okay, so now I'm joined by one of the OG's of the show, Sarah Friar, big tech team leader here at Bloomberg. Sarah, great to have you on. Thanks for having me, Okay, Sarah. So we're going to talk now about one of Elon's companies that, well, for us at least, it's kind of fallen off the radar just because it's been drowned out by Tesla and Doze and Doze and Doze and SpaceX and Tesla and Dose do And that's Neuralink, which is a pretty fascinating company, but that just again just doesn't make news every second of every day for starters. Remind our listeners what exactly Neuralink is and where it was as we last understood it, so that we can get into new developments.

Dana, thank you as always, Thanks thank you. Okay, so now I'm joined by one of the OG's of the show, Sarah Friar, big tech team leader here at Bloomberg. Sarah, great to have you on. Thanks for having me, Okay, Sarah. So we're going to talk now about one of Elon's companies that, well, for us at least, it's kind of fallen off the radar just because it's been drowned out by Tesla and Doze and Doze and Doze and SpaceX and Tesla and Dose do And that's Neuralink, which is a pretty fascinating company, but that just again just doesn't make news every second of every day for starters. Remind our listeners what exactly Neuralink is and where it was as we last understood it, so that we can get into new developments.

Must be nice to be at the Musk company that's not under the microscope, not super involved with what's going on in DC thinking about the future, like that's the sweet spot right.

Must be nice to be at the Musk company that's not under the microscope, not super involved with what's going on in DC thinking about the future, like that's the sweet spot right.

Just quietly beavering away doing their work.

Just quietly beavering away doing their work.

So, Neuralink is one of Musk's companies that is in the business of putting chips in people's brains to help them do things that their bodies can't do. Right now, they're focusing on quadriplegics, people who have no ability to use their arms or legs, and they've only had so far publicly three patients for this device, which again involves surgical implantation in the brain, attaching electrodes to your brain tissue to help you move a cursor on a computer to help you to make your needs known via your actual brain waves. Musk has talked about eventually leading us to symbiosis with artificial intelligence. That's extremely far away from the current reality, which is still very exciting, which is that they have this human trial that started last year where they are implanting devices into people's brains for real. They put their first chip in a patient named Nolan Arba. We talked about that on the podcast in the past. Since then, they've implanted the device in a few more people, and they've improved the technique.

So, Neuralink is one of Musk's companies that is in the business of putting chips in people's brains to help them do things that their bodies can't do. Right now, they're focusing on quadriplegics, people who have no ability to use their arms or legs, and they've only had so far publicly three patients for this device, which again involves surgical implantation in the brain, attaching electrodes to your brain tissue to help you move a cursor on a computer to help you to make your needs known via your actual brain waves. Musk has talked about eventually leading us to symbiosis with artificial intelligence. That's extremely far away from the current reality, which is still very exciting, which is that they have this human trial that started last year where they are implanting devices into people's brains for real. They put their first chip in a patient named Nolan Arba. We talked about that on the podcast in the past. Since then, they've implanted the device in a few more people, and they've improved the technique.

For a second, before we talk about that and the improvement in the technique, tell us about Nolan Arbaugh and what made him the right candidate for this chip.

For a second, before we talk about that and the improvement in the technique, tell us about Nolan Arbaugh and what made him the right candidate for this chip.

Well, Nolan Arba was a quadriphlegic, so he fit the parameters of what they needed to prove that they could actually make something that read somebody's thoughts that would allow him to now, for instance, play video games independently, which is really remarkable. This is on the road to helping with other motor conditions such as Parkinson's.

Well, Nolan Arba was a quadriphlegic, so he fit the parameters of what they needed to prove that they could actually make something that read somebody's thoughts that would allow him to now, for instance, play video games independently, which is really remarkable. This is on the road to helping with other motor conditions such as Parkinson's.

They have a few.

They have a few.

Initiatives looking into how they could work on vision this breakthrough status Project breakthrough status is what the FDA gives you if you're working on something that is so important it should be accelerated. Neuralink has one called blind Site, which is supposed to help with eye issues. So unfortunately for our ba, some of the electrodes detached from his brain tissue over the course of wearing the implant, and so the company had to rectify that, and so with future patients what they did, and then they now had total of three, and there was a second later in twenty twenty four. Then there was somebody early in twenty twenty five. This year they've tried to reduce the space between the chip and the brain no air bubbles. Now, even though this is a company that is relatively quiet in the muscaverse, this is going to be a big year for them. They've said that there might be twenty to thirty more patients this year.

Initiatives looking into how they could work on vision this breakthrough status Project breakthrough status is what the FDA gives you if you're working on something that is so important it should be accelerated. Neuralink has one called blind Site, which is supposed to help with eye issues. So unfortunately for our ba, some of the electrodes detached from his brain tissue over the course of wearing the implant, and so the company had to rectify that, and so with future patients what they did, and then they now had total of three, and there was a second later in twenty twenty four. Then there was somebody early in twenty twenty five. This year they've tried to reduce the space between the chip and the brain no air bubbles. Now, even though this is a company that is relatively quiet in the muscaverse, this is going to be a big year for them. They've said that there might be twenty to thirty more patients this year.

Well, wha wha, wha. So you go from basically, if my math is right, one not even one a quarter, one every four months or so. So now we're going to be doing a few a month.

Well, wha wha, wha. So you go from basically, if my math is right, one not even one a quarter, one every four months or so. So now we're going to be doing a few a month.

Well, that is the hope.

Well, that is the hope.

I think. They just said that they are opening their prime trial, which is like basically the their integrated medical device trial, the trial for this telepathy chip. They tweeted saying they're calling for patients.

I think. They just said that they are opening their prime trial, which is like basically the their integrated medical device trial, the trial for this telepathy chip. They tweeted saying they're calling for patients.

So that is.

So that is.

Signed to the world like listen, We're ready for more. I think that that may have something to do also with the amount of competition that's cropping up. There are a lot of startups that are doing more in this space as we speak. Just recently, just a few days ago, Science Corp Rays over one hundred million from Cosla. They're starting with a retina implant to help with with eye issues. They also got breakthrough status from the FDA. But there are a few other startups, Parodramics, Precision Neuroscience that are working on similar things.

Signed to the world like listen, We're ready for more. I think that that may have something to do also with the amount of competition that's cropping up. There are a lot of startups that are doing more in this space as we speak. Just recently, just a few days ago, Science Corp Rays over one hundred million from Cosla. They're starting with a retina implant to help with with eye issues. They also got breakthrough status from the FDA. But there are a few other startups, Parodramics, Precision Neuroscience that are working on similar things.

You're saying the space is even getting more heated and more competitive, and Neuralink was chasing to begin with, right, But I.

You're saying the space is even getting more heated and more competitive, and Neuralink was chasing to begin with, right, But I.

Think that Neuralink was very well funded. I mean they have more than six hundred million in funding. They last raised in twenty twenty three at a three point five billion valuation. I think a lot of that excitement and funding around neuralink is linked to Elon Musk himself. And I also think that you can't really get a way with cutting corners in this market the way you might be able to in a Tesla supply chain.

Think that Neuralink was very well funded. I mean they have more than six hundred million in funding. They last raised in twenty twenty three at a three point five billion valuation. I think a lot of that excitement and funding around neuralink is linked to Elon Musk himself. And I also think that you can't really get a way with cutting corners in this market the way you might be able to in a Tesla supply chain.

Your cut corners and people die.

Your cut corners and people die.

Yes, yes, and that would be very bad for business.

Yes, yes, and that would be very bad for business.

Okay, now, so you mentioned that Nolan Arbaugh is able to play video games with his mind. Now and the other patients, what concretely, if anything beyond playing video games are they able to do with this technology. Understood of course, that this technology is still developing in the ideas that slowly but surely they're going to be able to add and add and add capacity, the aspiration being at some point that these quadriplegics are even able to stand up and walk. But as of right now, beyond playing video games, are they doing anything else.

Okay, now, so you mentioned that Nolan Arbaugh is able to play video games with his mind. Now and the other patients, what concretely, if anything beyond playing video games are they able to do with this technology. Understood of course, that this technology is still developing in the ideas that slowly but surely they're going to be able to add and add and add capacity, the aspiration being at some point that these quadriplegics are even able to stand up and walk. But as of right now, beyond playing video games, are they doing anything else.

It's basically that Nolan Arba can control a computer with his thoughts, which goes a long way in today's world. Right you can move a cursor around and click on things the way you would do with your hand or use on a phone, but you can't if you're a quadriplegic. So that opens up a lot of possibilities to communicate, to make choices on the internet, and yes, to play video games. So I think that that is the main claim to fame at the moment. Eventually, yes, they hope to make patients able to do all sorts of things. Again, they plan to use this chip to work on conditions from obesity to bipolar to Parkinson's and then eventually communication between humans and computers directly, that kind of telepathic of symbiosis, as Musk said.

It's basically that Nolan Arba can control a computer with his thoughts, which goes a long way in today's world. Right you can move a cursor around and click on things the way you would do with your hand or use on a phone, but you can't if you're a quadriplegic. So that opens up a lot of possibilities to communicate, to make choices on the internet, and yes, to play video games. So I think that that is the main claim to fame at the moment. Eventually, yes, they hope to make patients able to do all sorts of things. Again, they plan to use this chip to work on conditions from obesity to bipolar to Parkinson's and then eventually communication between humans and computers directly, that kind of telepathic of symbiosis, as Musk said.

Yeah, and I suppose it is possible, and I just can't exactly. I'm just not sure what I should make of this. But at some point we're going to be able to simply download like entire encyclopedias into our brain and just retain them there, and I don't know, it all just starts getting really weird.

Yeah, and I suppose it is possible, and I just can't exactly. I'm just not sure what I should make of this. But at some point we're going to be able to simply download like entire encyclopedias into our brain and just retain them there, and I don't know, it all just starts getting really weird.

It should eventually help us with memory retention, with you know, keeping us true to our diet plans, that sort of thing. I mean, that's all kind of what's been talked about in this in this realm.

It should eventually help us with memory retention, with you know, keeping us true to our diet plans, that sort of thing. I mean, that's all kind of what's been talked about in this in this realm.

I guess I just wonder this though, if I start downloading volumes of encyclopedias into my brain, well, I still have enough bandwidth to remember all the name all the names of mind.

I guess I just wonder this though, if I start downloading volumes of encyclopedias into my brain, well, I still have enough bandwidth to remember all the name all the names of mind.

I expect that it'll be the computer that has the volumes of encyclopedias and you just you just like access it as you need.

I expect that it'll be the computer that has the volumes of encyclopedias and you just you just like access it as you need.

I see like it's up there in the cloud.

I see like it's up there in the cloud.

And I the way we do now with the internet. But you know, we don't have It's not like our brains are going to have well who knows, right, I don't know what the future holds. What I do know is while companies like Neuralink are talking about this pie in the sky future while working on like the direct medical science, this idea of brain control of devices is actually pretty mainstream now in tech. Saw Meta came out with research just earlier this year on how they would be able to determine based on brain waves what you're going to type wow. And that's not with an invasive chip. That's just from putting a lectures on your brain on the outside. And they read people's activity while they typed and tried to make connections.

And I the way we do now with the internet. But you know, we don't have It's not like our brains are going to have well who knows, right, I don't know what the future holds. What I do know is while companies like Neuralink are talking about this pie in the sky future while working on like the direct medical science, this idea of brain control of devices is actually pretty mainstream now in tech. Saw Meta came out with research just earlier this year on how they would be able to determine based on brain waves what you're going to type wow. And that's not with an invasive chip. That's just from putting a lectures on your brain on the outside. And they read people's activity while they typed and tried to make connections.

And the hit rate was pretty good.

And the hit rate was pretty good.

It was better than people expected. Yeah, it was pretty good. It wasn't perfect, but it's baby steps. This is all baby steps. What people say is happening in their research, it's you know, these studies are very tailored to try to like produce something narrow, Okay, but.

It was better than people expected. Yeah, it was pretty good. It wasn't perfect, but it's baby steps. This is all baby steps. What people say is happening in their research, it's you know, these studies are very tailored to try to like produce something narrow, Okay, but.

Any even The point is is that this is the entire industry is tacking and tacking quickly in this direction.

Any even The point is is that this is the entire industry is tacking and tacking quickly in this direction.

Apple has a patent about reading your brain waves through air pods and that, yeah, exactly that that sounds very mainstream. Now that's this is all early days, but it's it's spooky enough that the idea that your brain activity might be accessible, yes, has caused a wave in reactions from state governments. There have been some early attempts to try to regulate the privacy of brainwave data. This is so early in the science, but governments have seen what happened with other technologies that have grown too quickly without regulation, and so we've seen some states try to decide now that your brain wave data should remain yours, unprivate and not used to sell you ads or something.

Apple has a patent about reading your brain waves through air pods and that, yeah, exactly that that sounds very mainstream. Now that's this is all early days, but it's it's spooky enough that the idea that your brain activity might be accessible, yes, has caused a wave in reactions from state governments. There have been some early attempts to try to regulate the privacy of brainwave data. This is so early in the science, but governments have seen what happened with other technologies that have grown too quickly without regulation, and so we've seen some states try to decide now that your brain wave data should remain yours, unprivate and not used to sell you ads or something.

Okay, now, Sarah, with most of Elon's companies, yeah, most we initially saw when Trump was elected, and of course Elon went to great lengths to help get him elected, a real spike in the valuation of his companies. Kesla initially surged wildly that, of course, for reasons stated again and again on this show, has since reversed and gone down quite a bit. But the valuation of many of his private companies SpaceX x XAI, which is now taken over x. You mentioned that back in twenty twenty three, Neuralink at evaluation of roughly three and a half billion dollars. Do you know what it is today and whether it also got that Trump election boost.

Okay, now, Sarah, with most of Elon's companies, yeah, most we initially saw when Trump was elected, and of course Elon went to great lengths to help get him elected, a real spike in the valuation of his companies. Kesla initially surged wildly that, of course, for reasons stated again and again on this show, has since reversed and gone down quite a bit. But the valuation of many of his private companies SpaceX x XAI, which is now taken over x. You mentioned that back in twenty twenty three, Neuralink at evaluation of roughly three and a half billion dollars. Do you know what it is today and whether it also got that Trump election boost.

Well so, without a new funding round, and we haven't heard of one happening yet, we can't say for sure what the valuation is. But what Reuter's found middle of last year was that there were some share trades on the secondary market, which is the market for you know, if we're private holders of neuralink stock, we could offload that stock or trade it for something else on a private market that's not necessarily accessible to everyone. They were trading at five billion valuation, so that is higher, but I would caution against saying that that doesn't mean that Neuralink now has a five billion dollar evaluation. Reuters attributed that to the interest in the company's shares just because of Elon Musk's prominence, the fact that if you invest in an Elon Musk company, there's going to be some bright future for that company kind of no matter what, because he will figure it out. That that's sort of the the Elon effect, the belief around his abilities.

Well so, without a new funding round, and we haven't heard of one happening yet, we can't say for sure what the valuation is. But what Reuter's found middle of last year was that there were some share trades on the secondary market, which is the market for you know, if we're private holders of neuralink stock, we could offload that stock or trade it for something else on a private market that's not necessarily accessible to everyone. They were trading at five billion valuation, so that is higher, but I would caution against saying that that doesn't mean that Neuralink now has a five billion dollar evaluation. Reuters attributed that to the interest in the company's shares just because of Elon Musk's prominence, the fact that if you invest in an Elon Musk company, there's going to be some bright future for that company kind of no matter what, because he will figure it out. That that's sort of the the Elon effect, the belief around his abilities.

Any sense of whether Elon's proximity to this government, the Trump administration, any sense that that will be helpful. There's been a lot of speculation as to how that applies to SpaceX and Tesla and X itself. How about for Neuralink.

Any sense of whether Elon's proximity to this government, the Trump administration, any sense that that will be helpful. There's been a lot of speculation as to how that applies to SpaceX and Tesla and X itself. How about for Neuralink.

I mean, there was some concern about Musk's influence earlier this year when those cuts resulted in the firing of FDA staffers who were tasks with reviewing Neuralink. That was actually reversed. Those those staffers were reinstated, according to reports. But I think chaos at the FDA is not great for any company in this kind of line of work.

I mean, there was some concern about Musk's influence earlier this year when those cuts resulted in the firing of FDA staffers who were tasks with reviewing Neuralink. That was actually reversed. Those those staffers were reinstated, according to reports. But I think chaos at the FDA is not great for any company in this kind of line of work.

So, in other words, whereas some of his companies, terms of other companies might benefit from less regulation, this is a company that needs the FDA to say, hey, Neuralink, you are now allowed to do X or Y, and you.

So, in other words, whereas some of his companies, terms of other companies might benefit from less regulation, this is a company that needs the FDA to say, hey, Neuralink, you are now allowed to do X or Y, and you.

Can't do that unless you have FDA staffers to communicate with, to design your clinical studies with, to make sure that they're they're aligned with what the FDA wants to see in order to grant approval. I mean these companies, all the companies in the space are in very close constant contact with the FDA about what next steps to take to get to that milestone of commercial availability for their products, which might not happen for neuralink for years. So it's very important that the FDA is still in this communication with all these device startups. They also just were clear to start a trial in Canada, so it's not just a US related company anymore. And certainly a lot of biotech companies are working on international markets first before coming to the US because it just can be easier. But yeah, cuts of the FDA and also all of the cuts in research generally at universities, Academic research is very much a part of the building blocks for what comes next in AI and neural understanding what those brain impulses actually mean. All the research kind of builds on the foundation of what's been there before, and so the fact that a lot of federal funding for research in general has been cut or has not been given to academics without intense restrictions on things that have nothing to do with that research. That's not great for a company like Neuralink or anything in the biotech space.

Can't do that unless you have FDA staffers to communicate with, to design your clinical studies with, to make sure that they're they're aligned with what the FDA wants to see in order to grant approval. I mean these companies, all the companies in the space are in very close constant contact with the FDA about what next steps to take to get to that milestone of commercial availability for their products, which might not happen for neuralink for years. So it's very important that the FDA is still in this communication with all these device startups. They also just were clear to start a trial in Canada, so it's not just a US related company anymore. And certainly a lot of biotech companies are working on international markets first before coming to the US because it just can be easier. But yeah, cuts of the FDA and also all of the cuts in research generally at universities, Academic research is very much a part of the building blocks for what comes next in AI and neural understanding what those brain impulses actually mean. All the research kind of builds on the foundation of what's been there before, and so the fact that a lot of federal funding for research in general has been cut or has not been given to academics without intense restrictions on things that have nothing to do with that research. That's not great for a company like Neuralink or anything in the biotech space.

Got it, Sarah, thanks again.

Got it, Sarah, thanks again.

Thank you so much.

Thank you so much.

Take care.

Take care.

This episode is produced by Stacy Wong. Anna mas Rakus is our editor, Blake Maples handles engineering, and Dave Purcell fact checks. Our supervising producer is Magnus Henrickson. The e lining theme is written and performed by Taka Yasuzawa and Alex Sugira. Brandon Francis Newnam is our executive producer, and Sage Bauman is the head of Bloomberg Podcasts. A big thanks as always to our supporters Joe Weber and Brad Stone. I'm David Papato Applis. If you have a minute, rate and review our show, it'll help other listeners find us. See you next week

This episode is produced by Stacy Wong. Anna mas Rakus is our editor, Blake Maples handles engineering, and Dave Purcell fact checks. Our supervising producer is Magnus Henrickson. The e lining theme is written and performed by Taka Yasuzawa and Alex Sugira. Brandon Francis Newnam is our executive producer, and Sage Bauman is the head of Bloomberg Podcasts. A big thanks as always to our supporters Joe Weber and Brad Stone. I'm David Papato Applis. If you have a minute, rate and review our show, it'll help other listeners find us. See you next week

At the STA

At the STA