Elon, Inc.Elon is the New Rush Limbaugh... No, Warren Buffett... No, Howard Hughes...
This week, the crew is joined by Bloomberg tech reporter Davey Alba to discuss how Musk is increasingly engaging with memes and misinformation favored by Donald Trump and his supporters. In recent months, Musk has shown an openness to Trump’s claims that the 2020 election was stolen and that the Jan. 6 attack on the US Capitol was a not a failed insurrection, but instead a government conspiracy. He’s also promoted the idea that white people are under threat from Black people and immigrants—popular fixations among Trump’s supporters.
We also break down the current drama over at Tesla.
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. I mean 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, Joel Webber, sitting in for David Papadoppolos.
I know I must be incredibly racist if I just want someone who knows how to fly the damn play, not someone who got in because they checked a couple of boxers and maybe there's a big boy in the room to teach them how to do it in case something goes wrong.
What is Donald Trump Junior talking about and what does it have to do with Elon Musk? More than you might think to discuss Elon's recent French posts about undocumented immigrants and corporate diversity initiatives and more. Will convene Davy Alba, who covers tech and misinformation here at Bloomberg News. Hi, Dana Hole, the world's most meticulous Tesla reporter, Good morning, and Max Chafkin, senior reporter at Bloomberg BusinessWeek.
Hello.
Later this episode, we'll also talk about the latest Tesla drama. But first, what has Elon been posting about on X Davy Alba?
Oh boy, I mean, there's been a lot recently. He's been talking about how HBCU grads have lower IQ, how sis is a heterophobic word.
He's been talking a lot.
About quote illegals, particularly you know, sort of illegal immigrants and their voting patterns, and that this idea of meritocracy that is very prevalent in tech, that competence must win over racism and sexism. And yeah, there's a lot to dig into there.
What's also interesting, he seems to be noisier lately than usual.
Yeah, I mean I would point to a report by the Institute for Strategic Dialogue that I read recently, and they basically tracked Elon's you know, sort of pattern of posting and topics that he's been writing on X from before he was the owner of the platform to the months after.
And before, you know, most of his rhetoric was around.
Crypto, it was around Tesla and SpaceX and.
The other companies that he owned.
And then once he was the owner of Twitter, he started interacting very frequently with right wing users. And you know this is not anecdotal, It's based on an analysis of his most popular posts and you know, just kind of like who he follows, who he replies to, and you know, we see that that changed after he acquired Twitter, which I think is notable. I think that says something about his information bubble kind of like.
What he's up to in some ways.
And you know, gives us a sense of like where this is all.
Leading Max, What is happening in Elon's information bubble? And let's bring back that that Don Junior reference that we started the show with. What's he being exposed to?
Yeah, so the latest thing Davey kind of hinted at it and that Don Junior clip gets at it is basically the idea that somehow diversity caused the door of the Alaska Airlines flight to to blow off. Now, again, this doesn't make a lot of sense. It's based on, as far as I can tell, a right wing influencer sort of doing a kind of a tortured reading of a Boeing sec proxy that talked about executive compensation and linking executive compensation to meeting diversity metrics in addition to safety. And so you go through like several logical leaps, and the suggestion is that somehow diversity is hurting the ability of airlines and plane companies and regulators to hire competent people, and like you know, hopskipping a jump to somehow DEI is to blame for these in air issues.
It is nonsense.
It's nonsense both in the sense that you know, it's there's no evidence that like air travel has gotten less safe, right air travel is historically extremely safe, So that part doesn't make any sense.
The other thing is there certainly.
Is a critique to be made of Boeing, And but I think if you talk to of Boeing that what they will talk about has more to do with sort of the need to meet quarterly earnings challenges and so on. And what I also think is that basically what we're seeing is like Elon Musk. He's sort of broadcasting these existing right wing memes, but he's bringing them to a much wider audience.
Right.
He found this boeing thing.
He didn't create it himself, but it goes from Elon Musk into Don Junior and to a much much wider audience than it otherwise would have had before.
Just to connect the dots a bit more, United Airlines Program partners with Hampton University in Virginia, elizabeth City State University in North Carolina, and Delaware State University.
Those are historically black.
Colleges, and the partnership allows graduates to get an interview with United Airlines Pilot program. And Elon's tweet if we look at it for beta, he's and it will take an airplane crashing and killing hundreds of people for them to change this crazy policy of d I E a play on DEI. There's so many problems with that argument. First of all, this kind of partnership is just kind of like a chance to interview. And the idea that HBCU grads have lower IQ on just in general is completely baseless, and I think it's worth just stating that as fact. As we lay this out for our audience.
One thing that really that I just keep thinking about whenever I see these posts, that really struggle with like how much to call Elan out on them, because calling them out also kind of like shares them, right, So it's like that whole thing of like amplification, like unwitningly amplifying as a journalist. And so I always I'm on the fence about how much to even talk about it, because I feel like we're doing Elon's work for him, of injecting these horrible ideas into the mainstream. But the thing that I always think about is his companies are incredibly diverse, and it's so striking to me that he is on this rampage about DEI when Tesla, for example, is a minority majority company, Like those factory workers are overwhelmingly LATINX black, you know, Filipino. I mean, there are erg groups at all of his companies. There's women at SpaceX, there's black at Tesla, There's LGBTQ at Tesla, or there was, And I just have to wonder if he is actively trying to dismantle those groups, or if the people who are leading those those employee groups are just going to leave in frustration and not be replaced. It's a real slap in the face to his workers.
We should also just like keep in mind the context here is the twenty twenty four presidential campaign, and you know much of what Elon Musk is tweeting. You know, it's tempting to be like, well, why is he saying all these horrible things about migrants or why is he sort of suddenly fixated on these kind of white nationalistic tropes around you know, black crime and things like that. And the answer is is because it's what Donald Trump and many of the Republican presidential candidates are talking about right now.
We are now on the heels of Iowa, the Iowa Pracus where Trump ran away with it, frankly right, And so you think all of these recent tweets from Elan over the past week totally was part of the build up to a political moment in Iowa.
I'm just saying that Elon Musk now operates within a conservative media political ecosystem like he is, like basically, in addition to being the world's richest man, in addition to running a bunch of companies, we say that all the time he is a political figure he's like simultaneously like Rush Limbaugh and I don't know, like Warren Buffett.
It's really and so.
And I was actually before this podcast, I'm trying to think back, like have we had somebody like this in American history? And it's like pretty hard, Like maybe go back to Charles Lindbergh, Like where somebody who has the level of celebrity and power and money that Elon Musk has alongside the political interest and you know, influence and demagoguery, Like it's pretty unusual.
And Howard Hughes will stick with their aeronautic theme. Maybe well, I don't think.
Howard Hughes, though, had quite the ambition to be an influencer in the same way, right, And Lindberg of course was like this celebrity, very admired and also leading up to World War Two, you know, an isolationist and giving these big speeches and so on. I was saying, like Ronald Reagan in the in the mid seventies, you know, before he ran for president, but like Reagan by that point was I think maybe more of a has been a as a celebrity than Elon Musk is today.
So it's I don't know, it's very hard to look for a historical peril. Most right wing and left wing.
Political figures who are sort of doing this kind of you know, weird stew of conspirac size, conspiracy theorizing and so on, they don't have this kind of money, right, Like, like there are checks on their ability to spread crazy ideas, which is that like media networks won't air their stuff and they start losing money.
Elon Musk has, at least so far.
Neither of those concerns, right, he owns a media platform and the value of Tesla, while you know the stock actually hasn't been doing great or the last a week or so, he's obviously still very wealthy.
Davie. One of the other themes that came up in some of his tweets was around immigration. What do we know about Elon's views about immigration and how do these recent his recent posts and comments jibe with that.
You know, I think that Elon has been, like I said earlier, kind of building up to this argument of you know, illegal immigrants kind of getting the ability to vote in the upcoming election will lead to Democrats being elected.
And you know, if you look at just the last.
Few tweets, he had about these quote unquote legals. The dozens of replies to his tweets are about you know, oh well now we have mail in ballots, we have you know, all of these ways to commit voter fraud that has been enabled by democratic people in power. And so I think that this is all kind of part of mosque courting controversy, which has been the shift since he became owner of x Max. Was saying that there isn't really a good comparison to a public figure, But what keeps coming to my mind is Trump. You know, the way that Trump courts controversy and the way that people are forced to report on him as you know, first a presidential candidate and then the president, and you know this idea of misleading information coming from the top, and just because it is a person in power, people are forced to pay attention to it. That gives that person and all the platforms he controls, and you know, for muskets X way higher profile.
I would also say, you know, we've talked about the possibility that Musk would sort of move towards Trump.
You know, originally he backed Ronda Santis.
He sort of played foot see with RFK and Vivek Ramaswami, who dropped out of the race shortly after losing the Iowa caucus. You know, Elon by sort of going, you know, stop the steal or stop the steal curious. He's he has in a bunch of different ways, you know, basically endorsed the idea of being open minded to Donald Trump's view that the twenty twenty election was being was was stolen, and that you know, it's a way for him to kind of, you know, maneuver himself to where, you know, the heat of the Republican Party is like I think he misjudged, you know, where Republicans were going initially and now as a part of what's going on with this misinformation is like an effort to tack closer to the sort of heart of the MAGA.
Movement, where there is certainly a lot of engagement.
I also like this phrasing, Max, that you said, stop to steal curious, because a lot of folks who spread misleading stuff on social networks often toe this like very delicate line of not exactly crossing directly into misinformation, but are in this space of well, we're just asking questions about what's going on here, what might be behind you know, say, like this airplane malfunctioning, Could it possibly be that we are hiring unqualified pilots? Could it possibly be because these these pilots are you know, from historically black, and you know these sort of just like swirl of just asking questions about it introduces the topic into the public sphere without exactly stating something that is provably false.
Dana how as a close watcher of Eland for a long time, and just to kind of connect all the things that we've talked about, from the undocumented immigrants to the political ambition perhaps or interests, how do you think his views Elon's views have evolved in the time that he's owned X Now.
Well, I think, yeah, as Max and Davey have pointed out, we definitely see a more open pivot to the right, But I don't think it's been like a hard pivot. I think he's always been frankly like a right wing libertarian. He just was politically astute about where the winds were. And when President Obama was president, you know, he very he kept those ideas under wraps and just like was the green clean energy person, like you know, ushering in the shift to the electric vehicle revolution. Now that we're in an election season, and you know, I think he's been emboldened by his wealth and has seen so far that nothing has really stopped him. And the other kind of context that is always in mind here is that his empire is under investigation by several agencies. And when it comes to diversity and racism, like remember that Tesla first was sued by the State of California Civil Rights Division and then by the federal EEOC for rampant, systematic, widespread anti black racism at their factory in California. And so everything that he does to kind of to sort of call into question DEI, I mean, you know, as a as an ethos is the backdrop is that his companies are really being like sued by the federal government for that. And so the more that he can kind of amplify his concerns about DEI, the more sort of populist support he gets for whenever the EEO c levees a fine or you know, whatever the EEO does. And so it's like a two track thing of him closing up to Trump but also really portraying himself as this victim of big government overreach.
These lawsuits are ongoing by the way, and Tesla says that in California, the Department of Fair Employment and Housing conducted a bare bones investigation without interviewing key witnesses, requesting key documents, or ever stepping foot in the Fremont facility, and that the agency has abandoned its founding purpose in favor of making sensational headlines. Anyway, Max, what's.
Different here is that in previous elon Musk has as Dana said, he's been pretty politically savvy, right, He's in prior elections, including in twenty twenty, has seemed to try to keep his options open. You know, in twenty twenty he had sort of backed away from Trump and in some ways turned critic though he was also saying that, you know, there were things about she was trying to serve, trying to have it both ways a little bit on Trump. And now what we've seen is a much more sort of full throated embrace of the Republican Party and and and he's basically trying to navigate to whoever is going to be the Republican nominee for president.
And I think it's because of what Dana is saying.
He perceives that the Biden administration has turned against him, is you know, and is and feels that he needs to make a more you know, like a full bet on the election, which of course comes with a lot of risk. There's a reason most CEOs like don't do this, and it's because, you know, you pick a side and your side loses that that is not always great for you, and both either in terms of kind of like a from a regulatory perspective or from just like a brand perspective, right like you're you're potentially alienating like half the country.
Okay, So last week there was news that Hurts was selling twenty thousand evs to shift back to gas powered cars, has about a third of its EV fleet. This comes after in twenty twenty one, Hurts announced it would buy one hundred thousand Teslas, also without a discount full price for those Also in Tesla news. On Monday night, Elon posted on x that you'd like to own twenty five percent of Tesla he currently owns about thirteen percent, or you just pivot into AI and robotics elsewhere. So let's start with the Hurts news, and then we're going to talk about Tesla ownership and maybe even a little bit of board Talk, Dana, any particular meaning to what these EV numbers at Hurts are about.
Yeah, so this is super interesting to me. When Hurts announced that they were buying all these Teslas, that was like a big moment that led Tesla to get this trillion dollar valuation, and it was this sign that like EV's had finally really gone mainstream and it was a big part of like the Tesla stock rise. And I've rented Tesla's for her several times and it's been a great experience for me. But I think that like for the average person who maybe has never driven an EV before, you have to learn some things about charging, and you know, like it hasn't been a seamless experience for everybody. And what happened was Tesla really dropped their prices, which meant the resale value was lower, and then Hurts was kind of left holding the bag because now they own all these cars that have appreciated, and rental car companies typically like they sell off their cars pretty quickly.
Max. What's the response been from Elon on this?
Has Elon brought it up?
I think he has attempted to, as as a kid, say like tweet through it or whatever. This is kind of a this is a nothing issue compared to, you know, the question of will CNN ignore Vivek Ramaswami's chances of winning the Iowa caucus, which he was on you know, for days prior to to what happened last night, and now as congratulated Vivek on you know, going quietly and with dignity or whatever. I think Dana has brought up the kind of hurt side of this. I do think there is a Tesla demand side of this. You look at what Hurts is saying, and it to me, it seems like they're kind of trying to be nice about it, and they're saying, well, you know, the demand wasn't there the repair They're they're sort of saying a bunch of things that make it sound like, you know, people aren't as excited about EV's as we thought. But of course people are not as excited about Tesla EV's as they thought. I think that may partly be a result of Elon Musk's crap posting of his of his weird tweets, which we talk about all the time, and we've been looking for sort of signs like, are is this you know, gonna maybe hurt demand for the cars.
I think we're seeing it here.
Okay, Dan, let's connect this into the ex post that Elon had Monday night, where he currently owns thirteen percent of the company, says that he wants to own twenty five percent or he's taken his aspirations for AI and robotics elsewhere. What do you make of that?
So it's hilarious, Like here, it is like Martin Luther King weekends, like most people are like trying to you know, honor doctor King and enjoy a long weekend, but always does stuff on the weekends when like the Beat reporter is not working and the Beat reporters on his companies are not working. So this is like sort of classic Elon. So there's two things going on. Musk used to own like twenty two percent of Tesla, and then he sold shares to buy Twitter. So he's like in this position of not having this like controlling stake because of his own folly of buying this social media platform. So that's one piece of it. The second piece of it is that he got incredibly wealthy because of this crazy moonshot compensation package that Tesla's board approved in twenty eighteen where he basically like met these milestones and tranches and then got like more shares as the company hit this market cap and it was crazy at the time, but like everyone won, right like Tesla did Gangbusters. Elon got all this money, He's met all the tranches, and he's basically signaling to his board that he wants a new comp plan to stick around. But the current compensation plan is like been the subject of this huge lawsuit in Delaware chancery court and the judge has not ruled on that yet, so like there's no way that like the board is gonna do another comp plan while they're still waiting for the last one to be decided on. But it's clear that there's something happening there. And then finally, what just cracks me up to no end is he's like, Tesla is an AI and a robotics company. It's not just a car company. We're an AI company. I don't know, Guys, like, I don't If I don't have twenty five percent, I might just have to take my marbles and go do AI and robotics elsewhere. And it's like, dude, come on, I fight It fascinating and hilarious and I would love to know what the people of a compensation committee of Tesla's board are thinking. But it seems to me like they've got another plan ready to go, but they're they're waiting for the ruling from Delaware Chancery Court before they spring it out.
Yeah, normally you wait till like you're doing something really good before asking for like a massive pay increase, like a like you know this would amount to a compensation increase.
I don't know.
It's like hundreds of billions of dollars, conceivably over over some period of time. The thing that's funny to me is like, so if I said, you know, guys, yesterday I was thinking a lot and if Bloomberg chooses not to double my salary, I might have to do a different Elon podcast. You guys would laugh at me, because I am there's no other problem Elon. There's no other credible Elon podcast for me to do. But but in the case of Elon Musk, of course there is a credible threat because you know, he's done this thing with X and Grock right like it. It doesn't sound so crazy to think that the board might be like, oh geez, like, we better watch out or Elon's gonna get all the AI value and and stick it in Grock.
Forgive me if I'm like wrong about this, but I also wanted to maybe ask Max and Danna. The AI that Elon is doing with Tesla has nothing to do with Generative AI and Grock, right, these seem to be completely different spheres, And so is this.
Somewhat of an empty threat? Like this is just like words rhetoric.
It's like like with everything with Elon, everything is related, right, So he is training Tesla's cars to you on AI, like the data they're you know, they're they're using AI vision data sets for the cars. But then he's got Optimists the robot which he's which is also sort of AI ish. But then he's probably using like the language on X to train something. But and then he's going to need like data centers to do all this, and like I could see all the companies intertwine in various ways. But yeah, I mean I think you raise a good point. Like when he says AI and robotics, I mean I'm assuming he's, you know, he seems to be clearly talking about Tesla, but then what is he going to do like spin off the Dojo Computer to like a separate company, like if he doesn't get the twenty five percent, Like, that's what I'm wondering about.
This comes down to the board, right, Like you've asked for a pay increase. The board is waiting on Delaware and a decision in Delaware. Wouldn't the board, I mean, the board is friendly, we know this with Elon, but wouldn't the board just push back and say no, we don't need to pay you any extra. And also, anything that's AI and related to Tesla, you can't take out and go put it in your other company if you're not working for Tesla anymore.
Right, Hahaha, Joel, you think the Tesla board is going to you know? I mean it's like the funniest thing about this to me is the stated reason for this why Musk said he needs, you know, a bunch more equity, a huge amount of equity, is the risk of a takeover of Tesla without if he doesn't have twenty five percent, you could have a hostile takeover could happen, somebody else could get control of Tesla, which is hilarious because like Musk, there's absolutely no way and I mean Musk can literally do anything he wants. On the board at least so far, has basically gone along with it, you know, owning multiple companies, posting crazy stuff, basically ignoring all sorts of government rules and regulations.
You know, the board basically says yes to everything he does.
So the idea that that somehow, like some hostile some investor could get a few percentage points and somehow, you know, takeover is kind of insane.
But of course the board.
Historically has just has basically rubber stamped everything Elon does because they've understood that a lot of the company's value is in this guy's personal brand and his personal identity, and.
It's unclear that Tesla would be better off.
In fact, it's very likely that Tesla's stock price would you know, sink like a rock if Elon Musk left.
So like the board is sort of in a bind.
Tesla always discloses the key man risk. They are highly dependent on his services, and until they have a clearly named number two, they always will be. And I think what's interesting about Elon and Tesla is that anytime anyone has kind of risen to be a potential number two, that person has been AXD JB Strabo, Zach Kirkhorn, Doug Field, John McNeil, Jerome Giam like all of the executives who were always kind of like rising stars. You thought, oh, maybe this is going to be the COO they've always needed. Once they've risen to that height, they've always left. And so I think secession planning remains a huge issue. And basically, yeah, Elon seems to be indicating like give me more, give me twenty five percent control, or I'm out of here, or I'm going to start another startup. And that puts the board in a really difficult position.
And like if Elon Musk left, this would cease being an AI and robotics company.
Like right now, Tesla is in a car company. It's an Elon Musk company.
Because you know, the shareholders believe that like somehow Elon Musk is going to you know, you know, swallow up other industries. You know, at various points, it's been different things, self driving robotaxis or whatever. If if you just put an auto industry executive in charge of Tesla, it would be worth a lot less, Like way way less.
It sells fewer cars than.
The big car companies, and it's worth many times more and so like that's like Tesla does the value only makes sense if it's an Elon Musk company. And I mean we could we talk about why that is maybe a questionable assumption, but it's one that investors, you know, buy and large and brought into at the most.
Dann Can I just ask a stupid question, like what doesn't Ethon's got tons of money? Why did he use his money to go buy more shares?
He's not liquid?
I think that's the thing that we've all deduced, right, Like he he's sort of this oddly he's this odd person and that he's the wealthiest person on the planet, but he does not have like liquid assss. He doesn't have like cash in a bank account.
And he sold all his homes already, so that's not an option.
Yeah, he doesn't.
He doesn't have homes.
I mean, he's got a jet, but he doesn't have homes. He doesn't have a yacht he owns, he's running six companies. He had to sell Tesla shares to complete the deal on X. Now he's got to service the debt, and you know he's like basically banging his fists like I want more control, Like you know, he's bummed out that he's down to twelve percent. Well that's his own fault, and it's like just crazy to me too, Like okay, Like does Tim Cook have five other companies? No, Like you know, usually the CEO is like singularly focused on the company in hand, and Elon never is. And yet that's it's been okay because the stock has largely done well over these past several years. But like no other planet does someone basically say I want more control of this company. But by the way, like I'm not gonna be a full time CEO and I'm gonna do all these other things and you're just gonna have to live with it, all right.
We'll leave it there, Davey, Max Danna, thanks so much for joining us on this episode of Elenink.
Always a pleasure, great to be here.
Thanks for having us.
This episode of elin Inc. Was produced by Stacy Wong. Naomi Shaven and Rayhan Harmanci are our senior editors. The idea for this very show also came from Rayhun Blake Maples Handles engineering, and we get special editing assistants from Jeff Grocott. Our supervising producer is Magnus Hendrickson. The Elon Inc. Theme is written and performed by Teka Yazazawa and Alex Sigira. Sage Bauman is the head of Bloomberg Podcast and our executive producer. I'm Joel Weber, filling in for David Papodopolis, who will hope we be back next week. If you have a minute, please rate and review our show and we'll help other listeners find us. See you next week.
