"Making Money on Space Is Still Extremely Difficult"

Published Nov 14, 2023, 9:39 PM

On Friday, SpaceX is scheduled to launch its Starship spacecraft for the second time. The first time yielded… mixed results. It was detonated within minutes of launch. In this episode we look back at what went wrong the first time, look ahead to the coming launch, and figure out what’s so difficult about space travel anyway. We also take a look at some recent statements from Elon on things like OpenAI and freedom of speech.

This episode is hosted by Bloomberg executive editor David Papadopoulos, who is joined by Bloomberg Businessweek senior reporter Max Chafkin, Bloomberg editor Sarah Frier and space reporter Loren Grush.

Well, Elon Muski is 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 fast corporate empire, his latest gambits and antics, and how to make sense of it all. I'm your host, David Papadopolos. On Friday, SpaceX is scheduled to launch its starship spacecraft for the second time. The first one went well until it didn't. It was detonated within minutes of launch. A lot in space travel, of course, can go wrong, and has gone wrong. But we also now know from a new Reuter's investigation that even when things go well behind the scenes, they can get very messy. To discuss this and more, we brought in Lauren Grush, who covers space for us here and is the author of the six The Untold Story of America's first women astronauts. Welcome, Lauren, Hello, thanks for having me. Sarah Fryar, who oversees our coverage of Silicon Valley's biggest companies. Hi, Hello, Sarah. And Max Chafkin, senior reporter at Bloomberg Business Week.

Hey, how's it going? Hello? Max?

All right, but we're gonna start back in Texas with you.

Lauren.

Just remind us why Starship is so important to the company and two Musk's multiplanetary vision.

Sure, so, I guess you could say Starship is what Elon has been working towards since the very beginning. He founded SpaceX to start a civilization on Mars, and in order to do that, you need quite a large rocket to get people there. And so Starship is ultimately that transportation system that will take people to deep space destinations. Right now, they're kind of working toward the Moon, as NASA is looking to go back to the Moon, and Starship holds a multi billion dollar contract with NASA to take the agency's astronauts to the Moon first, but eventually the goal is to take upwards of, you know, hundreds of people to Mars and then you know, bring them back at some point as well.

And so back in April you were there. What happened? What went wrong?

Well, a lot of things didn't quite go as planned. As I could see as I was watching it launch. Multiple Raptor engines on the rocket flamed out. As I was watching it, I turned to the person next to me and I said something like.

Uh, is that supposed to happen?

But the rocket kept climbing, so I just kept filming it and watching it. But as it turns out, that was not supposed to happen. So multiple engines either failed or didn't even start up during the launch, and then as it climbed towards space, there's a portion of the flight where the vehicle intentionally separates. It's known as stage separation. And there are two stages on Starship. There's the Starship spacecraft itself, which is the top portion of the rocket and that's what would presumably carry people and cargo someday. And then you have the booster, what's known as the super heavy booster. It's a very long piece at the bottom that is needed to really get it out of the Earth's gravity and get it into orbit. Well, at some point, you know, the stages are supposed to separate because it gobbles up all the fuel in that super heavy booster. When that time came, the vehicle started to spin out of control, and then inly SpaceX opted to intentionally destroy the vehicle.

They shut it down essentially, right, Yeah.

Yeah, it's a precautionary measure with a system known as the Flight Termination System. It's embedded in every rocket and it's used for this exact scenario. So in case things don't go according to plan, they intentionally blow up the rocket to make sure it doesn't veer into a crowded area and cause unintended damage to public and property.

After that explosion, they fixed their problem. Since then they're ready to go.

That's what SpaceX says. The FA came up with a list of corrective actions that they need to implement. One of the biggest updates that you'll see during this flight is the addition of what's known as a water deluge system. So the way Elon described it is basically a shower head but pointed upward. So they've installed these steel plates underneath the launch pad or the launch mount that will gush water underneath the rocket when the engines fire, and that's meant to mitigate and lessen the forces that are created when those engines ignite. I mean, you have to remember, this is thirty three raptor engines that are supposed to ignite, and they're very powerful engines. So and that was ultimately what caused all of the destruction. Last time. They really didn't have any mitigation measures in place. And so I was actually watching the live stream from the original Starship launching. I could see the chunks of concrete kind of flying everywhere during that initial takeoff. So hopefully the DILUTIONE system will prevent that from happening this time.

Launchpad basically blew up max, yes, which I mean happens when you're launching experimental rockets and like these. You know, I almost feel like this is the area where Elon Musk is sort of most comfortable, right where he's sort of trying to develop a new technology, where he's able to like lower expectations sufficiently, where a little explosion is just kind of like a bump in the road, right, because they were they were celebrating, Yeah, and I think you can argue, I mean, Lauren, correct me if I'm wrong. I feel like you could argue that it was a success. I mean, right, this is they achieved something that hadn't yet achieved and again experimental vehicles, like they don't need to get to Mars in one boom.

Yeah, no, absolutely. SpaceX has been very clear that their approach to testing and development is very iterative, and you know, they like to go and fly things and push them to their limits until they break, and that helps them to learn and then they come back and do it again. The issue that they have though, is that they built Starship and star Base, this launch facility that in Boca Chica next to a wildlife refuge, and so you know, they can blow up their own launch pad as much as they want, but you know, when it crosses into potentially harming animals in the area or you know, causing damage to uninvolved public and property.

And it did, right, I mean, it would cause tremendous of damage.

Yeah, I do want to be clear, it was just the intense force of the launch itself that caused the most damage on the ground. They hadn't put in enough mitigation measures that most orbital flights normally do. And this is the potentially the largest and most powerful rocket ever developed.

What does SpaceX say, So, what would its response to all this be.

I would say the response is that they it happened exactly as they hoped, you know, they wanted to learn, and they are happy to damage and destroy their own launch pad as much as possible. I think they obviously don't want to cause any unintended consequences to the nearby environment or But at the same time, I think they they would blow up their launch pad as much as possible if it meant learning, you know, new things about their vehicle, and they'll happily, you know, rebuild again and again. I think in the long term they don't want to continue blowing up their launch pad, but in these early days of testing, that is just a side effect of learning and pushing the envelope forward.

Now Max More recently, Reuter's published a long investigative piece looking into the raft of injuries sustained at SpaceX facilities, and so it's pretty much a look at the human toll of what we call musk speed, right, that relentless drive to get new products ready, get them out the doors as fast as possible. I mean. Among the findings in their story, there have been six hundred injuries of SpaceX workers since twenty fourteen. More than one hundred workers suffering cuts or lacerations, twenty nine with broken bones or dislocations, Sementine whose hands or fingers were crushed, nine with head injuries. You had five burns, five electrocutions, eight accidents that led to amputations. One man is in a coma, and one man is dead. Is this of course at any industrial site there will be injuries? Is this abnormal?

Well?

I think so two things. One is, like you said, SpaceX is going to say that they're doing their best. You know, they're taking appropriate precautions. But we have read stories like this about Tesla, and in some ways it's not surprising, especially given what we know about Elon Musk. If you know, if you've looked at the Walter Isaacson book, you've seen scenes in which SpaceX engineers are sort of like drinking heavily, doing things in the middle of the night. It doesn't Now again, I don't think there's any allegation that any of that played into these injuries. And even when you listen to things that Musk says about this, you know, Musk talks about, you know, the distinction between sort of regulations that don't have anything to do with physics and laws of physics. You know, laws of physics are requirements. Everything else is a recommendation. Is a line that comes up over and over again in the Walter Isaacson book. The other thing is, I do think this is pretty damaging. Aerospace is an industry where safety standards really matter and where accidents can be super problematic. You know, the long term goal is, as Lauren's talking about, is to send regular people up in these rockets, and and anything that sort of dents that the aura of safety or reliability or anything like that can be long term damaging.

I would also mention that, you know, the reason that this I think these things happen it stems from the culture and the frenzy that Elon creates about the need to get to Mars as quickly as possible. He said many times before that the window to Mars is open now, and it could close, so we need to work as quickly as possible to get there, and so that creates I think a kind of crazed environment to work as quickly as possible to at all costs, you know, And that's why we know that SpaceX has a bit of a burnout culture, and that you know, people like you said, are working through the night and have a lot of anxiety just to try and get these things done to fulfill that mandate that Elon has.

I mean, I think that the Mars rush is sometimes, as we saw in the in as the same book another reporting, sometimes he just gets in a mood and he thinks, I have this new idea, I want to fix it now, or I want to change this now. We are you know, we had this as our priority, but our priority is now this and it starts tonight on a Friday night.

You know.

It is just it's just the way he works, and I think some employees find that extremely exciting.

Now, Lauren, if I'm correct here. SpaceX did not comment for this story. Did not comment to Reuters for this story. In general, their public posture in terms of how they treat safety workplace safety at SpaceX is.

What and I imagine they would say that it is, you know, a high priority. SpaceX is one of, if not the biggest partner with NASA right now, and when it comes to how they work together with the Space Agency, you know, safety is very a top priority for NASA and so when it comes to at least how they certify their vehicles to carry people to space, what is involved with making sure that their vehicles and their rockets and their capsules are up to NASA's standards. That is very heavily oversighted. And so you know, there is definitely regulation and oversight and a lot of things that SpaceX does. It's you know, but there are other things. I'm sure you know. NASA isn't there every single day.

As I was thinking about this, you know, I was thinking about when you when you take a few steps back from the Elon Musk, like the Elon Musk story, right, it's all about applying the lessons of software to hardware, and that is like super useful, I think to a point, right, because software is very iterative. You can fix it. You can have little issues, you can have little things break and no one cares.

Right.

So we're companies all the time, including really big ones like Apple, ship products that are not fully baked or that have problems that are being fixed kind of in real time, and that is like a recipe for innovation. I just think like this kind of gets at the limitations of this approach and like you can talk about, you know, the fail fast mentality or whatever. But when you're you know, there's an anecdote in there about somebody dropping like a very heavy piece of untund yeah, one hundred pound chunk of something not concrete, you know, down and like at a normal company.

And like landed at somebody's face. Yeah, it didn't hurt anybody, but they were like, my god.

And the story says that a normal company, they will get you fired. At SpaceX, it doesn't. And I think like that is telling and that that allows obviously allows you to move faster, but it it it.

Reaches a faster and also by the way, race ahead of Boeing, race ahead of Blue Origin, right, and when they are, they are in many ways dominating the space race.

We talked about Elon Musk's relationship with workers last week as it applies to Tesla, but you know, you kind of see it here too. When you're dealing with like big industrial plants with heavy equipment and things that can kill or maim you very easily, it requires a different approach.

One last bit of SpaceX news here. So we had a story last week showing that revenue it's starlink, the SpaceX unit that puts small Internet satellites up into space. That revenue there is growing, and apparently growing quite a bit, so fast that it'll count for more than half of SpaceX's total revenue by next year. Lauren, this strikes me as surprising. What do we make of this?

Well, I think from the very beginning, Starlink was meant to be a bit of a money maker for SpaceX. I think there were some early documents that came out a few years ago before they even started launching, that projected very high revenues for Starlink. They're also very tenacious about finding new businesses for Starlink's so while they have the customer consumer facing business, they're also very eager to get Starlink government customers and to planes, onto cruise ships, things of that nature. So I think if you read the tea leaves, it's clear that Starlink is very important to SpaceX in terms of being kind of this money maker to help generate funds to, you know, for that ultimate goal of.

Sure that they can keep blowing up rockets as they push sure higher and hire.

And find demand for all of these rockets that they want to launch, like they're launching these gigantic, as Lauren's saying, giant, bigger rockets than anyone's ever launched. You know, these enormous, enormous number of launches of the earlier generation of rocket, right, they kind of need something like Starlink to to fill up their boats.

And I think one thing to keep in mind is that while SpaceX is this very successful company and does all of these amazing things, it still remains to be seen if space is a profitable business. The truth is, making money on space is still extremely difficult, and so I think SpaceX is trying to find kind of where they can create that revenue stream through space so that they can support all of these other endeavors. And we're still kind of seeing if Starlink will be that money maker that they hope it will be.

The one last thing that's interesting on this though, is there at the same time we're talking about potentially spinning off Starlinks and an IPO, at which point, sure, you get an influx of cash, but I guess your cash cow to fund your rockets sky way.

And it's not totally clear that it is. I mean, can it clearly is you could generate a lot of revenue, but it's not clear that this is a super profitable business.

Apparently it's breaking even this year and last year.

You know, Musk was complaining that they were losing huge amounts of money in the context of the sort of argument over whether he should deploy more devices to Ukraine.

Welcome back.

Now.

Elon is a pretty busy guy. He's running six companies and yet he's been spending his time giving multi hour podcast interviews, although not to this one. Elon, if you're listening, you are always invited. He talked to Joe Rogan for close to three hours, and then to Lex Friedman for over two Sarah amid all this talk. Tucked in there somewhere there were comments on the political evolution of Twitter as it became X.

What did he have to say?

Yeah, between the talk of aliens and everything else, there was a pretty interesting quote about X and it encapsulates what he said before. Take a listen.

That's what it was controlled by far left activists. Objectively, they would describe themselves as that. You know, so if sometimes feel like well hasn't moved to the right, well it's moved to the center. So from the perspective of the far left, yes, it has moved to the right because everything to the right from the fall left, but no one on the fall Left that I'm aware of has been suspended or banned or de amplified. So, you know, but we're trying to be inclusive for the whole country.

And so what's interesting here is that Bloomberg has actually reported, based on third party research that in the month since Musk took over Twitter and turned it into X and loosen the rules that he thought were liberal activist rules, you actually saw an uptick in hate speech and racist speech, anti Semitic speech. And that's not so much a thing that people care about in terms of politics as much as they care about in terms of the user experience. People don't want to come to a social network and feel bad. They don't want to experience, you know, hate and racism in Advertisers don't want to spend their money there. It can be you know, a chilling effect on people who feel like they're in the minority or being being attacked to speak there, and we've seen that migration away from X and and so I think I think it's just worth thinking of those comments in that framing where it's like it is a it is a business decision and one that's actually gone poorly for him.

Okay, So in this interview Sarah, he also rekindled an old feud with Chatchept Sam Alton, and former business partner of Musk.

Now arrival. What's the deal there?

Oh, there's some history here. So so open ai started, as Musk says in his his chatter about it, and the.

Name the opening, Opening is supposed to be an open source and I was created as a nonprofit open source and now it is a closed source for maximum profit, which I think is not good comma.

So the the thing to understand here is Musk was a large backer of this open ai project back when it was considered a nonprofit, back when they were trying to you know, solve solve the issues with with AI taking over and doing harmful things and and yeah, it has become a for profit company. But the context there is is Musk just launched his own for profit version of of Grock, which we spoke about in the last episode. And so now we've seen this this very public brawl between Sam Altman and Elon Musk where they're throwing shade on each other through memes on Twitter. You know, Sam Altman made fun of of Elon Musk's grock as being like the dad joke, the cringey dad joke version of Ai and in Musk responded in a way that sort of confirmed his hypothesis.

So, Max, where does the Altman feud rank and the Pantheona Musk future? I mean, is this like Zuckerberg level, AOC level?

I think this is like a top to top twenty feud. It's definitely one of the one of the key and at the moment, I'd say it's like in the top five. But when you when you step back and look at the you know, panoply of Elon feuds. I want to offer one update from the world of sports on this on this podcast interview, Lex.

Freed a very broad definition of sports.

Lex Friedman trained or or you know, maybe wrestled with Elon Musk and Mark Zuckerberg grappled. There were some pictures on Twitter and there was no mention none of the cage fight during this entire two and a.

Half hour podcast. Is that possible?

Unforgivable? If you ask me.

So, it's the case.

I promise an update, but it's it's sort of a non update.

It's sorry, I can't say.

I remember it's always about the cage fight for our final segment. Today, we've got this biopic coming out, uh timeline unknown. But in Muska, I'm sure they're saying it's going to come out in two weeks and it'll come out in three years.

It's all about his life.

Director Darren Aronofsky is said to be working with a twenty five were on it, based on the new Walter Isaacson biography of Musk. And you know what it's got us thinking here is I mean, we need a cast, we need a dream cast for this. Okay, So I'm gonna start with you Max, Okay, who will play?

Okay? I just very quickly want to explain my thinking here because Aronofsky is not a funny guy. His movies are very dark, surreal, very dark. And I think that's kind of a problem because I think the Elon Musk story needs a little levity. I mean, this is somebody he's not always funny, but he tries to be. And so I think the key here to marry Aronofsky's dark aesthetic weirdness is to cast a comic actor in a serious role, which often is Oscar bit So I have two thoughts here. One is I want to start with Linda Yakarino, and I think Amy Poehler is the idea. And for Elon, this is very poor casting decision. I think there's going to be lots of other ideas. I'm suggesting Tim Robinson, who's a comedian. If you haven't heard of him, but you've seen the gift of a guy in a hot dog suit saying we're all looking for the guy who did this. He's a sketch comedian, does a lot of cringe comedy, and I think both in spirit and in content, he would be perfect.

I could go with that.

Sarah.

So, I am really really bad at casting decisions. So I phoned a friend on this one, and my friend Walter Hickey, who just wrote a book on Hollywood, I liked his casting decisions for Grimes. He brought up Anya Taylor Joy or Lady Gaga. I think they both would be really good Grimes. We need someone a little edgy.

I think Grimes being the on again, off again partner of Musques.

And mother of some of Musk's children.

I'm not sure that we know the number. If we're honest, well, I.

Think the latest three as far as we know.

Okay, Laurene Grush, who do you got Yes?

So I've been thinking about this for a while because I put together in terms of just pure likeness, I've thought about this one actor for a long time. I know he probably has done more, but I know him predominantly from the show Lost. If anyone remembers at his name is Kevin Durant, and if you google him, I think he's the one that looks most like Musk. I don't think I'm the only one that's come up with this connection either, So just in terms of pure looks.

I go with I got you.

I gotta say also, I am not the only one to suggest Tim Robinson. I saw that on Twitter.

But I think it's like whoa, whoa, whoa you came?

You stole it from somebody.

It seems like Sarah stall I did.

I'm not going to count Sarah.

At least sighted her source mine. For what it's worth, I only have one. I've got someone for Musk, and we're gonna have to bring someone back from the dead, though, which if anybody could do it, Musk. I fear like Musk will create a company which he brings back people from the dead and then sort of in the same vein as Mat. I've got Robin Williams.

WHOA, that's interesting.

I think we're gonna need a cameo here, and I was thinking, you kind of want like a really hot cat turd if you ask me, and so Timothy chalamey as cat turd, just come in and out.

Enough with the enough with the casting.

We'll take your ideas though. Listeners, all right, that's it.

Thanks for listening to elon Ink and thanks to our panel Lauren, Sarah Max, thank.

You, thank you for having me. Thanks so much.

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 Blake Maple's Handles Engineering, and we get special editing assistance from Jeff Grocott. Thanks a bunch Tolda de Carley and to Bloomberg BusinessWeek editor Joe Weber. Our supervising producer is Magnus Hendrickson. The elon Inc. Theme is written and performed by Taka Yasuzawa and Alex Subjia. 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.

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