Elon, Inc.Since 2019, Musk has promised that his company Neuralink, which is developing computer chips to be implanted in people’s brains, was close to performing an experimental surgery on it first human subject. And yesterday he could at last announce: “The first human received an implant from @Neuralink yesterday and is recovering well” Having finally delivered on his prediction, Musk used the occasion to tease a proposed product name, Telepathy. To discuss Neuralink’s achievement, Bloomberg tech reporter Sarah McBride joins the crew.
Also, Kurt Wagner analyzes X’s recent struggles with AI-powered revenge porn, and Dana Hull follows up on last week's Tesla earnings bingo.
Well, Elon Musk gives now the richest person on the planet.
More than half the satellites in space are owned and controlled by one man.
Starting his own artificial intelligence company.
Well, he's a legitimate, super genius.
Legitimate, he says.
He's always voted for Democrats, but this year it will be different. He'll vote Republican.
There is a reason the US government is so reliant on him.
Elon Musk is a scam artist and he's done nothing. Anything he does is fascinating the people.
Welcome to Elon, Inc. Where we discuss Elon Musk's vast corporate empire, his latest gambits and antics, and how to make sense of it all. I'm your host, David Papadoppolos. The news is coming fast and furious in the Elon Verse. Last night, Elon announced that Neuralink had successfully implanted a chip into a human. Big news, clearly, but just how excited or terrified should we be? Meanwhile, over at X, the team had a strange response to deep fake porn images of Taylor Swift that had gone viral on the platform. They made it impossible to search for her at all. Oh and Tesla earnings came and went and the stock market gave Elon a big thumbs down. To talk about this, I'm sitting here in the studio with Max Schafkin, senior reporter at Bloomberg BusinessWeek. Hello Max, Hey, you missed me, Max, wwa.
I did. It's so good to see you, David.
Later, we'll be joined by Kurt Wagner and Dana Hall to talk about X and Tesla, respectively. But first we welcome Sarah McBride to the show. Hello Sarah.
Hello.
Sarah is Bloomberg's Neurlink reporter and will help guide us through this cerebral quantum leap. So, Sarah, what do we actually know here? What happened? A chip went in, the patient survived. What else do we know?
Well? In his tweet yesterday, Elon said that signals were working in the patient's brain, that neurons were firing or words to that effect, which is great, but it would have been terrible news had that not been the case.
And what exactly does neurons firing? What is that for the lay people out there like MEA Max? What does that mean?
In his post yesterday, Elon wrote that initial results showed promising neurons spike detection and all that means is that there are one hundred billion neurons almost in the average human brain, and so the neurons, which are the cells of the brain that are near this device are working. There. When a neuron works, you can tell because it kind of activates at the end, there's a tiny electrical signal. So that's what they're picking up with the device as after it got implanted on Sunday.
Pretty encouraging. I mean, hard to know exactly how much to read into it, but certainly positive for times the patient survives.
Right, doesn't mean that the device is working. It means that it didn't destroy anything in the patient's brain, and probably a few days or weeks down the line, then they'll see if it can actually result in the patient being able to, for example, mover cursor on a computer outside outside their boxy.
So we don't know that yet. We're not there yet.
We don't know that yet, not even close, not even close.
Sorry not to be the wet blanket, but like I think we need to approach the claims being made here with some skepticism. First of all, it's Elon Musk we're talking about. He's a guy who tends to present you know, let's just say like the rosiest possible version of any prospective technology. And this is a safety trial, it's not an efficacy trial.
This is the point here is to put this.
In a few people's brains and see if anything bad happens to them. And so far, according to a single tweet by Elon Musk, we don't know. We haven't heard anything from the patient. We haven't heard anything else. Patient's doing.
Okay.
I just want to remind everyone in the monkey trials that Neuraline did, there were a lot of serious COMPLICATIONDS for the monkeys. And I went back and reread the story that Wired published on this. Right, these these were not necessarily happening the next day, So I think there's still some time even before we can say these are safe.
Right, So I was sort of thinking that the fact that here we are TK hours later the patient is still alive was fairly significant that as a positive sign. Max is sort of suggesting that, well, okay, great, made it through the surgery. But you know, these things tend to pop up down the road. Just how significant is initial survival? Obviously again great for the patient, but.
Yeah, I have to say it's very significant. This has been years in the making. This has been Elon promising every year like, oh yeah, we're going to have this device in a few months or next year, and finally, literally years after he first promised that it is in a human brain. That said, other companies that have done similar work have tended to wait a few days before making similar.
But this is Elon Mosky. You knew he wasn't gonna wait.
This is Elon. Also, this patient is you know, monkeys can't indicate when there's something wrong. Monkeys try to scratch their heads and mess with the scar sites. I'm not saying that those surgeries weren't botched. I've read some of the UC Davis reports, and maybe there were mistakes made during the surgery, but this is a human patient and hopefully a lot was learned from those monkey experiments. They've done many implants in primates since those botched ones, so I think they know the stakes here and this one was super carefully done.
Now on the surgery itself, it is not a human doing the surgery itself, right, It is a robot.
Correct, there's a.
Robot assisting in the surgery, but it's not like the patient goes in the surgeons are like, okay, up to the robot. We're out of here. It's still a lot of humans in the operating room kind of managing the robot.
Well, that's reassuring that there are humans involved here.
Now.
Listen, Max made it sound like it was all this is all about the safety of the product and not so much so much about efficacy. But efficacy means when you were talking about whether this person will be able to move a cursor with his or her brain, that sounds like efficacy to me, not safety.
So they definitely are interested in safety. That is, to Max's point, the top priority. But it's a little different to drug trials. So device trials don't go through the same phase one, phase two, phase three we might be familiar with from drugs. There are different stages and they're analogous to some of those phase one, two, three, But you don't put a device like this in somebody's brain and not know that it's working before you go ahead and implant the next patient.
So, but just to be clear, Sarah, there's another phase that they're gonna need tomorrow.
Yeah, there are two more phases there. We're looking at years of child right.
Well, nonetheless, Elon Musk in addition to announcing that the neurons are firing or whatever whatever he said, whatever that means. And now it's a product name for this. It's called Telepathy. It sounds wonderful. I mean, telepathy sounds pretty good.
Well, he's changed the name a few times, so let's see if telepathy sticks. But it's catchy.
Matt Max seems to like it, so there we go.
I just it's just funny how we've gone from we put this in the guy. The guy is not dead yet, thank god, and it's called telepathy, and you know, I feel like we're one tweet away from like pre order one.
Now it'll only be as.
Put your deposit in.
I have a feeling it's not going to be called telepathy when it fie gets released to the market. Somebody's going to put the kibasha on that. But yeah, it's a great name.
So what do stage two, Sarah, and stage three look like? And when do we all go around with these things in our heads?
Elon said that he wanted to get it in over ten patients this year, which is ambitious, but they could do it, you know, if they did one a month and then they have to analyze all the data, submit that to the FDA. Once the FDA's reviewed it, then they can start the next set of trials. And then the third set is called the pivotal trials, and those are the most exciting. You know that it's closest to an actual product. Those will be hundreds, if not thousands of people, but that's probably five years away. Yeah, if everything works as hoped.
Now, let me ask you, as you said, in a good scenario, they're able to do about one a month. I guess that's I'm curious about that is What is it about these that are so difficult that you can only do one a month? Is just simply the fact that they are still These are just baby steps for them, and they're being You have to be super cautious at this at this stage.
I mean, yeah, it's the first time they're doing this. You're putting electrodes several millimeters deep into somebody's cortex. You're slicing open their skull to do it, You're cutting into their dora. You want to make sure that the first one goes pretty well before you even try patient too. Then you want to make sure patient two is doing pretty well before you try patient three, and then you need to start actually doing the stuff you're trying to do, get the patient to move cursors and so on, control external devices. Then you have to build all that data, collate the results, present it to the FDA, let the FDA review it. And this is assuming that every thing goes well. If you have a setback like some patient who's scarring, heals in a weird way, or that could delay everything by months.
More sure, listen last question before we let you go here. So Neurlink in the musk constellation of companies isn't certainly isn't the most valuable or I don't even think towards the top end of those. But this is a big step right where roughly has it's a privately held company, where has its valuation roughly been, and what if anything does this development do for that valuation?
Yeah, I mean it'll probably increase the valuation. And as to where it is in the constellation of musk companies, it's toward the bottom, but toward the bottom for a musk company. In this case, Neuralink's worth three point five billion dollars For a medical device company that just implanted its first device in a human That is huge, just unbelievable. So that's the must fact driving up the valuation. And then you know, if they make it to the next trial, it'll have another outsized jump that'll make every other medical device company jealous. And you're seeing it already. I said the CEO of a rival company called Synchron last night. I just think he couldn't help himself. He had to post a tweet of one of his I think it was one of his patients manipulating Pong with his mind, just like, we're still here, don't forget about us. We've got devices in patients, still there and.
In many ways, as you report it many times, in many ways many steps ahead of of Neuralink.
Actually right, yeah, exactly, Well, in some ways they're in patience, but in other ways their device isn't as sophisticated as the Neuralink device. Neuralink has a thousand electrodes more than a thousand on its device, and Synchron doesn't have that many. So you can go back and forth and debate the pros and cons. But yeah, they were in patients for Nearlink.
And way they're way behind on names because, like I mean, because a normal sober minded medical device company would not just like go around, like you know, marketing a highly speculative brand name on their you know very much in development. Maybe it works, maybe it's safe. We don't know yet product, but you on, he'll it's difficult to go ahead and do that. And investors, you know, for better worse, they like that, they love it.
Okay, Sarah, listen, thank you very much for being with us. We will have you on as soon as we know more. As soon as you know more about our first patient.
Here sounds good. Thanks for having me.
Max and are now joined by Kurt Wagner, a tech reporter here at Bloomberg covering social media and the author of the soon to be released book Battle for the Bird, about Twitter and the battle for control of the company. Kurt, I know there's something tailor about Taylor Swift and deep fake porn, and then Musks people came back and they knew they hit the nuclear option, and you suddenly couldn't search it all for her. What the what the heck happened? Yeah?
I mean, you had all the ingredients right there of exactly what happened. So the end of last week we saw that there were some there was deep fake porn of the most arguably the most famous woman in the world right now, Taylor Swift, circulating on x and this violates several of the company's policies, first and foremost. And so what we saw was naturally people seeking it out, sharing it, commenting on it, outrage of course from swift E's and other fans of not only Taylor, but just people who realized that this is not a good thing to be happening on any platform. And then you saw the companies sort of scrambling to try and figure out what to do about this, right, and David you mentioned they ultimately for a couple of days literally blocked people from having searched results when they searched for Taylor Swift's name. It's sort of happy to get into sort of how extreme that.
Is, right, Why did they take such an extreme step? Why could they not be more precise in there and their crackdown on this?
So you do something like this when you're having trouble cleaning up all of the stuff on your own, right, this, this is I would consider a last resort or close to a last resort. And to me, the fact that they simply had to block people from even searching for Taylor Swift is a sign that they were not able to get the problem under control on their own, and so they had to take a drastic measure like this. I've covered Twitter for ten years. I don't remember this happening before in terms of the search ban, certainly not as it relates to a high profile user like this.
And that tells you what then about the current state of.
X Well, that the trust and safety function over there is not operating in the way that it was before Elon took over, and then it's not operating very smoothly, right, I mean, presumably how something like this would normally be handled is it would be flagged to the company, you know, oftentimes maybe even by the not Taylor directly, but probably her team. Right, They'd have a partnership's contact at the company that they would go to. The company would not only immediately take down the original tweet, but they would probably take those photos or videos and start to scan the rest of the service for either identical matches to them, or other photos or videos that look very similar. Maybe it's the same photo but it's been a watermark has been added or something like that, right, And they would sort of automate the process of taking the stuff down as quickly as possible. What we know is that the original content was up I believe for something like seventeen hours.
It's now down. Ultimately, the original content is down.
It's now down.
That's right.
And they've and to be clear starting last night. So Monday night they started letting people search for Taylor Swift again. So they feel like they've gotten the process or they excuse me, the problem under control. But it took several days on that.
You mentioned the NFL game. The NFL game is, as all of basically mankind knows, Taylor Swift is dating the tight end for the Kansas City Chiefs. Travis Kelcey Kansas City Chiefs played on Sunday in the semi finals of the NFL playoffs. They won, They're going to the super Bowl. So this band though on Taylor Swift searches is happening as this playoff game, this Kens City Chiefs game is going on, and Kurt, the NFL has been right one of the few bright spots for X of late in terms of generating buzz and content and all that horrible timing.
No terrible timing, I mean, imagine how many people are watching that game Sunday and see, you know, CBS cutaway to a shot of Taylor Swift jumping around in the you know, the Kelsey box or whatever and want to go to X and search about it or to talk about it or whatever. Right, and suddenly a huge part of the service is not working for that exact use case.
Kurt, So the nuclear option, somebody there at X hit the button. There was a very very large button that just says nuke, and they hit it and Taylor Swift disappeared from X for basically a day. Is that what we're going to expect going forward is that the blueprint then as this comes up in coming days and weeks, including perhaps during the Super Bowl in two weeks.
I mean, that can't be the long term blueprint, right. That's just not a good strategy, is not a good business model. It's a bad way to handle this, but it's what you do when you're desperate. So my hope is that there were a lot of learnings from the past couple days that the team that is there figured out, Okay, you know, here's what we did wrong, or you know, maybe add some new level of kind of monitoring for some high profile accounts. As you mentioned, the Super Bowl is two weeks from now. If this stuff starts to circulate again, like well, they have made enough of it change in the next two weeks, I'd be surprised. So it may be that we see something like this happen again. What I will point out real quick is that they did say, and they're they're announcing this very intentionally. This week they're going to open a trust and safety office in Austin, Texas. I claim they're going to hire one hundred full time employees to Now one hundred is a small amount, to be clear, but full time employees at X one hundred is actually a pretty decent size. And they're announcing this because Linda Yakarino is going to be speaking before Congress on Wednesday about protecting children online.
Is it actually meaningful or is it just simply pr and for disappearance.
I think it's more pr than it is meaningful.
What would a reasonable number be for a task like that?
Kurt, Well, it's tough because so many of these companies, like Meta, I think, was touting tens of thousands of content moderators, but most of them are contractors, right, They're like basically just sifting through this never ending wheel of terrible content and clicking allow or not allow or whatever. Having one hundred full time employees working on this could be meaningful if those people are, you know, writing policy handling high profile accounts like Taylor Swift. I need to see what these people ares jobs description are going to be before I can really say how meaningful it is.
But okay, but what if you are a much lesser public personality and do not have the influence or the deep pockets that Taylor Swift has. When if you too are targeted in something like this, what is your fate?
I think you're in trouble in that situation. Quite frankly, I mean, if it takes seventeen hours and several days to figure this out for Taylor Swift, you know, what chance does someone who has one hundred followers, or maybe someone who's not even on X right, but yet their face or their content or their body has been posted to X right. They might not even really be aware that it's up there. This is not just an X problem. So I don't want to continue. You know, we're talking about X because of the situation over the last couple of days, But like this idea of you know, women in particular, having their bodies shared online without their consent, Like this happens on websites all over the place, and it's not okay, right, But you just hold a higher standard to some of these larger companies because they have so much power, so much money, so much influence. You hope that the Metas and the x's of the world can get this right. Because if they can't get it right, what kind of hope do we have for anybody?
Yeah, we should say there's been reporting suggesting this was a Microsoft tool that was used to create this or could at least create some of these images. There have been Google alphabet has had its own battles with basically deep celebrity deep fakes. So yeah, I mean a lot of big companies, a lot of big companies that have you know, gigantic vast teams of people you would think trying to stop this stuff, have also struggled, But they just haven't struggled in such a spectacularly comic way. The banning of Taylor Swift. Also, the risk isn't just like getting sued by Taylor Swift. It's like upsetting your users. I don't know if other people have noticed this, but like sometimes you're just searching for something on Twitter and there will just be like porn that that'll just like find its way in that has found its way past the filters and into your feed. Like it's very and again when you're talking about like the Taylor Swift fandom, I don't probably don't have to tell people people feel very strongly about it, Like I don't think they want to see normal people don't want to.
See Taylor Swift revenge porn.
And that might be enough to turn you know, large numbers of people off of X permanently.
And advertisers max right, Like we could have an hour long conversation about advertisers fleen X and Elon, but this type of thing does not help them at all because Coca Cola, Apple, Disney, pick your brand. The last thing they want to do is be handing over their money to a platform that is, you know, known for Taylor Swift.
Well, it's quite the advertising decks like Linda on Madison Avenue being like, listen, we've got some great products for you.
We've got the NFL, we've got deep fake porn on one side, exactly.
Yeah, yeah, Kurt, we will see how they do in two weeks when the Kansas City chiefs, Travis Kelcey and Taylor Swift take on to San Francisco forty hours and we'll see how X holds up. Then. Thanks for joining us, Yeah, my pleasure.
Thank you.
We are now joined by our ace Tesla reporter, Dana hall Low. Dana, thanks for having me. Okay, so last week and we previewed this on the show. Tesla released fourth quarter earnings and the market gave it, I said earlier thumbs out. I actually think they gave it two thumbs down. The stock cratered towards the end of last week. Actually, in all of the S and P five hundred index, there are only two companies year to date that have fallen more than Tesla, and they are two companies it mired in major crises. I know the stock is bouncing back some now, but still it seems like this was a flop. Dana tell us why did it fall so much? Was it something that was actually in the earnings report or was it something that was said that unnerved investors so much?
Well, it was both. The January earnings call is all about forward looking guidance and this was a company that did not really give any guidance. They just said that things were going to be lower and that they're in between two waves of growth. Tellesla is currently between two major growth waves.
Were folks on making sure that our next growth wave driven by next gen vehicle, mpgy, storage, both self driving and other projects is executed as well as possible.
And you know, there was not a number like how many cars are they going to deliver in twenty twenty four. They didn't say two million, they didn't say two point five million. They just said that growth could be lower and that they're in between two waves. And that was sort of a nerving And then as the call went on, like things just sort of you know, Elon was very like sunny and optimistic and upbeat in terms of his tone, but the lack of guidance was really disturbing. And yeah, the stock is now down twenty two percent so far in twenty twenty four.
You know, Max, My take is, as I was looking at this briefly, was that you have a company in Tesla. It has along been this great growth stock. Right, All stocks investor CEE stocks in two categories, neither a growth stock or a value stock, and a growth stock is a stock that you were buying an anticipation of great growth going forward. In the last few years, you know, around sixty percent a year that is slowed to twenty percent, and that seems to be roughly what people are forecasting going forward. So I guess, you know, when you're valued as much as it was eight hundred billion dollars at one point not too recently, I guess this is just sort of like a gravity moment here, right, Yeah.
I mean I think that's and Elon himself kind of said that, you know, he's sort of in attempting, as Dana says, to kind of lower expectations. Said, you know, at a certain point, you know the growth is going to like we the law of large numbers comes in and and you can't grow fifty percent a year. I think that it's part of what's going on here is it's not just that Elon Musk is giving these predictions or non predictions that are dower, but when he's trying to tell the growth story, it's getting harder and harder to kind of conceptualize. Like during the call, he talked about optimists, the Tesla robot as this kind of be all end all.
He said it is going to be the most valuable product of.
All time, And on the call itself, you had like one of Elon's own employees kind of jumping in and saying, well, the big problem is for now, we can't figure out anything to do with optimists. So there's kind of this gap between Elon's version of what the company is and the kind of Wall Street version of the company.
Do we believe that that employee is still employed at Tesla?
It did not sound good because there was you know, when you're getting into an argument with the boss on the call, it's.
There's a pretty big gap between the greatest product of all time and we have no I did what to do with this thing?
I think what's really interesting is that, Okay, so Tesla fundamentally is a car company. Most of their revenue comes from cars. However, they don't really have a car right now, Like the cyber truck is barely in production. I mean, the why is this bestseller, but like the Why is getting old. So you're not going to see this like big wave of growth until they come out with their next generation platform, which they basically said would be like late twenty twenty five maybe. So in the meantime, what do you tell Wall Street about? You talk about, Oh, we're an AI company, we're a robots company, and they've got this optimist robot. We've got this Dojo computer which is now a long shot. We have an energy business. So they're gonna they have to talk about their other products because the core automotive product is just like, you know, they barely talked about the cyber truck on the call at all. I mean, it was it was like a huge emission.
But having said that, I do see on my Tesla earnings Bingo card here the cyber truck box was. And I want to talk about this Bingo card. I missed this last week. I didn't play, and I'm a little disappointed. But it seems like that we came close to getting Bingo but came up short. Here is that right? We didn't quite we couldn't quite pull it off.
No, And I will say that Elon Musk's you know, frantic, you know, citing all the future products, trying to come up with some kind of groc story was gold for Bingo because we had Dojo, we had optimists, we had you know, demand for Tesla's that are unlimited.
This was good for Bingo, but there was.
A bad for the stock. Good for Bingo, bad for the stock, which is which has been a hypothesis of mine for many.
Their hedge funds all over the building models that you know correlate.
But I'll also say this, and I don't know, Dan, if you, if you played a hand in formulating this Bingo card here, I feel like it was slightly rigged for us not to get it. I mean, audibly Puff's joint was only put on the card to block. There was no chance he was going to audibly puff a joint. No, no, no, no, no. Hold on also digging our own grave. I mean those are the two that blocked you hitting bingo. He wasn't going to repeat your own You guys rigged this thing. It was written.
No, he repeats himself all that. He repeats himself all the time. I mean, that's the thing about Elon's as as our former colleague Sean Okayn used to say, he's like a comedian practicing his bit, Like he says a lot of stock phrases over and over and over again.
But I want to direct your attention to I believe it's n five Uh reproduction is hard, which is something that Elon Musk has reiterated over and over and over again recently, and he very easily could have said that on the UH call you don't need audibly puffs Joy, and I want to remind you audibly puffs joyd was realistic, you.
Know, I recogrect him first. Can you give me my bingo car back? All right, let's end it there. Thank you for listening to Elon Inc. And thanks to Dana and Max.
Great to be here.
Always a pleasure.
This episode was produced by Stacy Wong. Naomi Shaven and Rayhan Harmanci are our senior editors. The idea for this very show also came from Rayhan Lake Maples handles engineering, and we get special editing assistants from Jeff Grocott. Our supervising producer is Magnus Henrickson. Huge thanks to Angel Rascio and Joel Weber. The Elon Inc. Theme is written and performed by Taka Yasuzawa and Alex Sugiura. Sage Bauman is the head of Bloomberg Podcast and our executive producer. I am David Papadopoulos. If you have a minute, rate and review our show. It'll help other listeners find us, see you next week.
