--:-- Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. Today, we've got a bonus episode from our Code Conference. It's my conversation with Elon Musk. I've talked to Elon many times, and I have to say this one was really good. We talked about the size of rockets and more.
--:-- [The interview begins]
--:-- Kara Swisher: All right, we have a lot to talk about.
--:-- Kara Swisher: Where do you want to start?
--:-- Elon Musk: Anywhere you'd like to talk.
--:-- Kara Swisher: All right. China. Cryptocurrency, what they're doing. That's my safe word, by the way.
--:-- Elon Musk: Okay, good.
--:-- Kara Swisher: What they're doing or cryptocurrency?
--:-- Kara Swisher: Cryptocurrency. Yeah, it'll kill any five years. Good to know for later for us, but go ahead.
--:-- Elon Musk: Cryptocurrency in China?
--:-- Kara Swisher: Yes. What they're doing around Bitcoin, et cetera. And then I'd like to pivot to what the US is going to do around regulation.
--:-- Elon Musk: Well, it would appear that they don't love cryptocurrency. It appears like that.
--:-- Kara Swisher: Yeah, it's subtle, but you're hinting in that direction.
--:-- Elon Musk: I can't speak to exactly why they don't like it that much, but people can speculate for various reasons. China, by the way, is having some significant electricity generation issues. So actually, I think part of it may actually be due to electricity shortages in many parts of China. A lot of South China right now is having random power outages because the power demand is higher than expected. So crypto mining might be playing a role in that, I'm not sure.
--:-- Kara Swisher: This is further than that.
--:-- Elon Musk: It is further than that. Well, I suppose cryptocurrency is fundamentally aimed at reducing the power of a centralized government. And they don't like that. That's my guess.
--:-- Kara Swisher: Okay. So what do you think is going to happen? I mean, maybe the audience has... The shares went up. It didn't matter after they announced this. They went down and they went up. You can change the shares of cryptocurrency more than China can.
--:-- Kara Swisher: Is that a good thing?
--:-- Elon Musk: If it goes up, I suppose it is. But I mean, I think there's always a long-term role for crypto. People should think of any kind of money system, whether it's a store of value or currency, as really a form of information. If you apply information theory to money, whether it's cryptocurrency or some other form, and view it in terms of how good it is at bandwidth, latency, jitter, dropping packets—which is fraud, like losing packets on the network—and its overall security, then I think a lot of these things make a lot of sense. Any form of money has no power in and of itself except as an exchange of value between people for goods or services or to translate things in time, like a loan.
--:-- Kara Swisher: So is this the right thing for governments to do, to take control of it? Is it possible?
--:-- Elon Musk: It is not possible to destroy crypto, but it is possible for governments to slow down its advancement.
--:-- Kara Swisher: So what should the US government do? We had Gary Gensler on earlier, SEC chairman. He was calling it the Wild West of finance. What should they do, if anything?
--:-- Elon Musk: I would say do nothing.
--:-- Kara Swisher: Okay. They're not saying that.
--:-- Elon Musk: Yeah, I mean, I wouldn't just let it fly.
--:-- Kara Swisher: Because?
--:-- Elon Musk: Well, what do you think governments can do? I think they can ruin it. I don't think they can just slow it down. I think they can stop it. I don't think they can control it, and therefore they may want to stop it. I wouldn't say I'm some massive cryptocurrency expert. I think there's some value to cryptocurrency. I don't think it's like the second coming of the Messiah, which some people seem to think. It will hopefully reduce the error and latency in the legacy money systems and reduce the... Governments have a habit of editing the money database, which is probably some ancient mainframe somewhere in Virginia. It's kind of bleak to think about that. So when governments can't keep their hand out of the cookie jar and edit the money database, there's probably some value to that.
--:-- Kara Swisher: Okay. So you're saying you're not an expert, but you spend a lot of time tweeting about it. Now, you tweet about a lot of things. We'll get to that in a minute. But why is that?
--:-- Elon Musk: It's true. It's true.
--:-- Kara Swisher: Why is that of interest to you, crypto? Because you've become, I wouldn't say the crypto messiah, but you're close.
--:-- Elon Musk: Crypto messiah. That's going to be a treat.
--:-- Kara Swisher: Oh, no.
--:-- Elon Musk: Well, I mean, I mostly don't tweet about crypto. It's a minority of a small number of tweets. I do know a lot about the money system and payments and how it actually works, as opposed to how economists think it works on a practical basis. Money is basically the monetary system is a series of heterogeneous databases that are not real time, with the exception of PayPal and a few others, and they reconcile on a batch basis that may take anywhere from 24 hours to several days. So it's slow. That's a lot of latency and jitter, and the ACH system has basically no security. This has been that way when PayPal started in '99, and it's still that way 22 years later. So it needs reform.
--:-- Kara Swisher: Yeah, yeah. Got it. So I want to move on to China. I want to stick with China for a second. You're operating there, selling there. What do you make of what they're doing to the tech entrepreneurs there, the tech moguls? Where is Jack Ma?
--:-- Kara Swisher: Do you know?
--:-- Elon Musk: No, I'm just curious.
--:-- Kara Swisher: Who has some means to find out, I'm guessing?
--:-- Elon Musk: Well, maybe. I don't know. I think there are some changes afoot in China. I think part of this may be actually COVID-related, in the sense that it's been quite difficult to have in-person meetings in China, and China really runs—the whole system is set up to run on the basis of in-person meetings. The absence of these meetings for the past 18 months, I think, has probably led to things being worse than they would be if there were more in-person meetings. I think as COVID lifts and the in-person meetings return, there will probably be an increase in the trust level, and things will probably start heading in a more positive direction.
--:-- Kara Swisher: The trust level between tech and the government?
--:-- Elon Musk: Yeah, both internally within China and with respect to people from the US and other countries going and visiting and meeting with officials in the Chinese government. China is very much set up to work with in-person meetings. COVID has impeded that. So I think things will improve most likely as the in-person meetings resume.
--:-- Kara Swisher: So they did these antitrust actions because they couldn't say hello?
--:-- Elon Musk: I think not all of it can be ascribed to that, but some of it can be. I suspect things will improve next year because of just more interaction.
--:-- Kara Swisher: Are you nervous about what you're doing there? It's a big market for you. You operate there.
--:-- Elon Musk: Yeah. We've got a big factory in Shanghai, which is doing very well. The Tesla China team is doing great work. We do well with selling in the Chinese market as well as producing cars for China and for export to Europe. So overall, things are going pretty well, frankly.
--:-- Kara Swisher: You're not worried about US-China relations?
--:-- Elon Musk: Not especially right now.
--:-- Kara Swisher: Not especially. All right. So let's talk about space. You had a recent space... You sent up a bunch of civilians into space. You did not send yourself up.
--:-- Elon Musk: No, I have not sent myself up. I suppose I will at some point. But my goal is not to send myself up. My goal is to open up space for humanity and ultimately set us on a path to becoming a spacefaring civilization and a multi-planet species.
--:-- Kara Swisher: So you don't want to go up yourself?
--:-- Elon Musk: It's neither here nor there. I will go at some point.
--:-- Kara Swisher: What do you think of the other efforts to go to suborbital?
--:-- Elon Musk: Suborbital is a step in the direction of orbit. But just to put things into perspective, you need about 100 times more energy to get to orbit versus suborbital. And then to get back from orbit, you need to burn off that energy. So you need a heavy-duty heat shield because you're coming in like a meteor. Orbit is roughly an order of magnitude more difficult than suborbit. But it's still good to do something in space.
--:-- Kara Swisher: What did you think watching both Richard Branson and Jeff Bezos doing that?
--:-- Elon Musk: I thought it was cool that they're spending money on the advancement of space. I think we ultimately want to be—humanity should want to be—a spacefaring civilization out there among the stars. I think we really want all these things that we see in science fiction movies and books to be real one day, not always fiction. So I think it's good that people are spending their money advancing space technology.
--:-- Kara Swisher: So last time we talked, we didn't talk a lot about space. We talked about a whole bunch. We talked about meat flaps, which was Elon's word for speaking.
--:-- Elon Musk: Yeah. We're flapping our wings.
--:-- Kara Swisher: Yeah. Slow tonal wheezing.
--:-- Elon Musk: Yes, that's right. When I sound like it right now. That's what we sound like to a computer. Like whale sounds, slowed down.
--:-- Kara Swisher: Right. So we didn't talk about space. So let's talk a little bit about where you think you've advanced with what you're doing, because I think you're probably the most fast forward of all these efforts.
--:-- Elon Musk: Yeah, so with respect to SpaceX, let's see. Besides orbiting a space flight and providing transport for NASA of astronauts to and from the space station, which we've been doing for a while now, over a decade, we have something called Starlink, which is a global internet system. This is going to have some profound positive effects on the world because Starlink is really designed to serve the least served.
--:-- Kara Swisher: You have 1,300 satellites up right now, is that correct?
--:-- Kara Swisher: And you want to put 30,000?
--:-- Kara Swisher: We'll get to space pollution in a minute, but explain the reasons for it.
--:-- Elon Musk: In order to provide high bandwidth, low latency connectivity to a large number of people, you need a lot of satellites, and they need to be at low Earth orbit so that latency is low. The problem with satellites that are at geostationary orbit is that they are around 36,000 kilometers, whereas we are at 550 kilometers. That's a gigantic difference in latency. For the Starlink system, you could play a competitive video game that's latency-dependent and still be able to play it. It's like browsing a terrestrial system, essentially. But Starlink is not a threat to 5G or terrestrial fiber or anything like that. It's very well suited to low to medium density regions of the Earth, places where it is too expensive to trench fiber or put 5G cellular base stations. It takes care of the people that just didn't get internet, or the internet is too slow or too expensive or they just don't have it at all.
--:-- Kara Swisher: How big a part of your space business is it from your perspective?
--:-- Elon Musk: I think it's quite significant. The launch side of things—just launching other people's satellites and serving the space station—probably tops out around $3 or $4 billion a year of revenue. Whereas if we can get to say 3% of global internet traffic, and that's roughly a trillion-dollar-a-year business, then we can increase our revenue by an order of magnitude to more like $30 billion or something like that. Then we can use the proceeds from that to develop the rocket technology necessary to get humanity to Mars and to the moon and elsewhere in the solar system. Starlink is good in and of itself for providing internet access to the least served in the world. It's a fundamentally good thing in that respect. And it also offers a little bit of competition in the cities, although Starlink can really maybe serve less than 5% of people in a city because the way the spot beams from space are very big. It's a very nice complement and a necessary complement to 5G and fiber. And like I said, it'll provide a revenue stream for us to develop our next generation rocket, which is Starship.
--:-- Kara Swisher: With Starship, we're trying to achieve a fundamental breakthrough that is the holy grail of rocketry: to have a fully reusable orbital rocket. This is extremely fundamental. With Falcon 9, we have a mostly reusable rocket.
--:-- Kara Swisher: She recently proved it landed, correct?
--:-- Elon Musk: We've been landing for quite a while now. A number of our boosters are on their 10th reflight. So we've shown that reusing the boost stage can be done and that it is economically sensible to do so.
--:-- Kara Swisher: What's the difference in price? Between our Falcon 9 competitors? And using a reusable rocket.
--:-- Elon Musk: Oh, yeah, sure. It's really gigantic. With Falcon 9, we still have to lose the upper stage. You can think of each stage being like the equivalent of a jet airplane. The boost stage is like the big jet airplane. The upper stage is the small jet airplane. We still throw away the small jet airplane every time. Falcon 9 is able to be the most competitive rocket in the world because we recover the boost stage and the fairing, but still our best case marginal cost of launch, not taking into account overhead allocation, is about $15 million.
--:-- Kara Swisher: Per launch?
--:-- Elon Musk: Yeah, for 15 tons to orbit, which is quite big. SpaceX over the last year or so has delivered roughly two-thirds of all payloads to orbit of Earth. Most of the remaining third is China, and then everyone else is kind of miscellaneous. But we still have a $15 million cost, mostly because of the...
--:-- Kara Swisher: What's the cost differential between that and what you're aiming for?
--:-- Elon Musk: Falcon 9 is effectively about half to a third of the cost of alternatives because of the reuse of the boost stage. With Starship, we should be able to get to the point where it's maybe 1% the cost of an expendable system.
--:-- Kara Swisher: So that would be a million bucks, right?
--:-- Elon Musk: Yeah. The marginal cost of launch, we think, could be potentially under a million dollars.
--:-- Kara Swisher: Is anybody close? For over 100 tons to orbit. 100 more than 15, you said 15.
--:-- Elon Musk: Yes, 100 tons likely, and with refinement of the design, probably 150 tons. So it would be 10 times the payload of Falcon 9 for 15 times lower cost.
--:-- Kara Swisher: When is that happening?
--:-- Elon Musk: 100-fold better is really profound. With Starship, it is possible to make the economics close for creating a self-sustaining city on Mars and a base on the moon for those who want to go there. It's a very profound development. That's what I'm spending most of my time on: driving the development of Starship.
--:-- Kara Swisher: Starship so you can go to Mars? Or you want civilization on Mars?
--:-- Elon Musk: Civilization on Mars.
--:-- Kara Swisher: So what's first, the moon base first, correct?
--:-- Elon Musk: I mean, the moon is close, so we might as well.
--:-- Kara Swisher: You might as well. It's practically right there.
--:-- Elon Musk: You got a contract with the Defense Department to do a lunar lander.
--:-- Kara Swisher: From NASA.
--:-- Elon Musk: From NASA, which is being disputed by Jeff Bezos.
--:-- Kara Swisher: How do you feel about that?
--:-- Elon Musk: Well, I think I've expressed my thoughts on that front. I think you should put more of his energy into getting to orbit than lawsuits. You cannot sue your way to the moon. You know how good your lawyers are.
--:-- Kara Swisher: So why isn't he doing that?
--:-- Elon Musk: I don't know. I also like to make fun of his rocket.
--:-- Kara Swisher: Y'all make fun of each other's rockets.
--:-- Elon Musk: I mean, I think it does have... It could be a different shape potentially.
--:-- Kara Swisher: Could you explain from a technological point of view why it's that shape?
--:-- Elon Musk: Well, if you are only going to do suborbital, then your rocket can be sort of shorter.
--:-- Kara Swisher: So have you called him and said, "Cut the shit, get bigger"? What?
--:-- Elon Musk: I have encouraged him to emphasize getting to orbit.
--:-- Kara Swisher: Do you talk to him?
--:-- Elon Musk: Not verbally.
--:-- Kara Swisher: What is it, mind-meld?
--:-- Elon Musk: No, just... Tweet at him.
--:-- Kara Swisher: Subtweet if you want.
--:-- Elon Musk: Subtweet.
--:-- Kara Swisher: So you do subtweet at him. So what are you going to do with the lunar lander, and how do you get the moon base there?
--:-- Elon Musk: Starship is designed essentially as a general purpose transport system to anywhere in the solar system because it is a propulsive lander. With a propulsive lander, you can land anywhere that's got a solid surface. It's also designed for orbital refilling. You can get the Starship to orbit and then send tanker flights to refill it so that it has tremendous delta velocity. Basically, it can go very far from Earth orbit because you can refill propellant.
--:-- Kara Swisher: The moon base is important because?
--:-- Elon Musk: Well, I think the moon base... Certainly there's a lot we could learn scientifically if we had a proper laboratory on the moon about the nature of the universe and where we all came from and the early history of Earth and that kind of thing. We have a science station in Antarctica, and we're still learning a lot from our activities in Antarctica, and I think we could learn even more on the moon. There's a lot of value to having a... I think it'd be just freaking cool. I mean, come on. We've got our humanity. We've got to represent here for humanity. Just have a base on the moon. I think everyone would be like, "Hell yeah, we've got a base on the moon. That's cool."
--:-- Kara Swisher: What do you think? No, I'm sorry, the science.
--:-- Elon Musk: I think a lot could be learned if you've got a science station on the moon, like we've got a science station in Antarctica and many other places. I think there is value that shouldn't be denigrated for people who want to experience going to orbit or going to the moon. When they do so, to some degree, vicariously, we all go with them. In the Apollo program, when they landed on the moon, it was just a handful of individuals on the moon, but we all went with them vicariously. Humanity went with them. If you asked a random person on Earth and said, "What do you think is humanity's greatest achievement of maybe ever?" It's landing on the moon. That's inspiring to kids everywhere.
--:-- Kara Swisher: We'll be back with more from Elon Musk after the break.
--:-- Kara Swisher: Welcome back to this bonus episode of Pivot. Here's more of my conversation with SpaceX CEO Elon Musk at this year's Code Conference.
--:-- Kara Swisher: So you just sent up four civilians. Is that space tourism you're doing? And by the way, you have to be kind of rich to do it. From what I understand, I cannot afford to go to the moon, for example.
--:-- Elon Musk: Yeah, I mean, I think it's got a bit more gravitas than simply tourism. It's not like going to Disneyland. It's more profound than that. Sometimes people use tourism in a negative way. Especially with the Inspiration flight, they filmed the whole thing in real time. They shared their experiences with the world. There's a really cool group of people. I recommend watching the Netflix show "Countdown." Mark Penioff talked about it. It's awesome. I don't have anything to do with it. The production value on the Netflix "Countdown" documentary is amazing. You learn about the back story of the people. It's actually super awesome.
--:-- Kara Swisher: You don't like this is for science and for saving humanity, presumably.
--:-- Elon Musk: I think there's an element of tourism to it, but I think the technology is expensive at first. You can't just—when you try to develop brand new technology, it doesn't instantly become cheap and affordable. Think of cell phones. The only cell phones were really expensive and sucked, frankly. You think of "Wall Street" where he's walking down the beach with the shoebox-size cell phone talking into it. It was really expensive and the tech wasn't that great. But if some number of people didn't pay for the expensive cell phones, they would not become the inexpensive cell phones that everyone can afford.
--:-- Kara Swisher: So thank billionaires for going into space.
--:-- Elon Musk: I mean, it doesn't have to be top of your thank you list. But I'm just saying that when there's new technology, it is necessarily expensive until you can refine the design and scale things up and then make it more affordable. There's a common misconception that with new technology, especially if it's a physical object, you can just suddenly make it cheap and available. But you have to have many design iterations, scale up production, and get economies of scale. We had this argument against Tesla for a long time. People would say, "Why are you building this Tesla Roadster back in the day? It's basically an expensive toy sports car for rich people." We're like, "Yes, it is. But there's no way we could build an affordable electric car as our first car." We didn't have the capital. We didn't have the experience. We needed to go through several technology iterations to get to something like the Model 3. I actually wrote a blog about this because I knew people would be like, "Why are you making sports cars for rich people?" as though we thought there was somehow a shortage of sports cars for rich people. We're obviously not. But you've got to figure out the technology. You've got to go through multiple design iterations, many different versions of the technology, a lot of hard work, and then you've got to scale up the production rate so you get economies of scale. Those two things are what make any given technology available to the public. Basically every technology that we take for granted today has gone through that evolution.
--:-- Kara Swisher: So the idea of getting to Mars will be affordable someday?
--:-- Elon Musk: Yes, absolutely. It has to be. In order for Mars to be a self-sustaining civilization, it has to be affordable.
--:-- Kara Swisher: When you say that, why do you want people to go when you just keep saying that? Because you're worried about this planet? Are you just betting the odds that we'll either blow it up or it'll be the day after tomorrow?
--:-- Elon Musk: No. I think if you look at the big picture, if we just step away from our sort of antinecine squabbles and say, "Let's look at the big picture here. What set of actions can we take that maximize the probability that the future is going to be good for civilization and for consciousness?" I think we should regard consciousness on Earth as delicate, not just fragile. What sort of actions can we do to ensure that it continues and that the scope and scale of consciousness expands? I'm in favor of expansion because if we want to understand what the universe is about and what the meaning of life is, we need to get out there and find out. The more we expand the scope and scale of consciousness, the better we will be able to understand what questions to ask about the answer that is the universe.
--:-- Kara Swisher: So when you get a lot of criticism about Starlink, space pollution—you see a lot of stories about space pollution. Why is Elon putting so many... astronomers get mad at you. Or with the rockets, you have these big defense contracts that you're doing. Correct, first time someone's broken into the area. How do you meet those criticisms? This is just small potatoes.
--:-- Elon Musk: Well, first of all, with respect to the astronomers, we are in constant dialogue with the leading astronomers of the world and taking great pains to ensure that our satellites do not interfere with their telescopes. I believe at this point they are satisfied that they will not. We're taking great pains to ensure that the satellites do not reflect or otherwise interfere with the telescopes, including the most sensitive telescopes. There may be a few amateur astronomers who aren't happy, but the professional ones are satisfied that we're taking reasonable steps to ensure that we are not standing in the way of science, nor would we ever want to. We're also looking at launching some new telescopes using Starship because Starship is a much bigger vehicle. We can launch satellites that have 10 times the resolution of the Hubble, which would be great for science. There's an exciting program working with Sol Perlmutter at Berkeley on a big new space telescope. I think we'll do more of those. At the end of the day, Starship and SpaceX are going to do a lot to advance our understanding of astrophysics and astronomy.
--:-- Kara Swisher: You still want to—you said to me a couple of times ago, we talked—you want to die on Mars. You still want to die on Mars. Just not on landing, right?
--:-- Kara Swisher: It's not an impact.
--:-- Elon Musk: Well, that would be spectacular.
--:-- Kara Swisher: Yes, but you wouldn't get to enjoy it much. Just a second or so. Talking about a narrative for the rest.
--:-- Elon Musk: No, I was just asked, "Do you want to die on Mars?" and I was like, "Well, I suppose if you're going to pick Earth or Mars, it'd be cool to be born on Earth and die on Mars." I'm not trying to make a beeline for Mars and just dive or something. You've got to pick one. You're going to die somewhere.
--:-- Kara Swisher: Okay. I've interviewed a lot of astro—I guess they're biologists—they're worried about, essentially they said you have to be under the earth a couple hundred feet.
--:-- Elon Musk: No, no, no. You get short and stupid.
--:-- Kara Swisher: Definitely not a couple hundred. All right, or 10 feet.
--:-- Elon Musk: Yeah, you just need—first of all, half the time you're shielded by Mars itself. That's half the radiation is just the planet shielding you. And then you want to maybe have like three feet of dirt on the roof or just a thick roof. I think it'd be fine.
--:-- Kara Swisher: So you're not worried about becoming shorter and stupider by moving to Mars?
--:-- Elon Musk: No, I think we might become taller actually on Mars. A little bit taller, yeah, because the gravity is roughly 40% of Earth's.
--:-- Kara Swisher: Okay, that would be good for me. When you think about...
--:-- Elon Musk: I do think there's an important thing. If you think of the various great filters—if you're familiar with the great filter thought—one of the filters is: do we become a multi-planet species or not? That is at least one of the great filters. I think it would be great to pass that and be a multi-planet species. The critical threshold is for a Mars city. If the resupply ships from Earth stop coming for any reason—whether that is civilization on Earth, it could be a mundane reason or could be World War III—does Mars prosper or die out? If Mars is missing anything at all, like the civilizational equivalent of vitamin C, then it will eventually die out. You need to get to the point where the Mars city is self-sustaining, even if the ships from Earth stop coming. Then you have passed the great filter, or at least that particular great filter. I think we should endeavor to pass that great filter as soon as possible.
--:-- Kara Swisher: When? You said pretty soon last time we talked.
--:-- Elon Musk: Yeah, I mean, I think we should really try hard to make it happen this century, before the end of the century.
--:-- Kara Swisher: You'll be pretty old.
--:-- Elon Musk: I'll probably be dead.
--:-- Kara Swisher: Not on Mars.
--:-- Elon Musk: Well, I mean, I'll pop over there when I'm old or something.
--:-- Kara Swisher: OK. So one of the things you're doing is a lot of government deals. You're doing this lunar lander. You did the rocket one. You're getting billions from $2.9 billion. Is that right?
--:-- Kara Swisher: Well, right now we're not getting anything because we're being sued.
--:-- Elon Musk: Right. That's right.
--:-- Kara Swisher: I'm sorry. OK. Yeah. But you're getting a lot of money.
--:-- Elon Musk: Hopefully we'll get it.
--:-- Kara Swisher: Right. Right. It's over. Yeah. Any fixes? Most of our launches are commercial, to be clear.
--:-- Elon Musk: Yes, I understand that.
--:-- Kara Swisher: But you're doing a lot of government work. What is that like working with the government? Is that important to your business?
--:-- Elon Musk: Yeah, I mean, it's an important part of the business. Just bear in mind, if you're in any industry, like let's say you're a pencil manufacturer, about 40% of your pencils are going to go to the government. The government's about 40% of the economy. If you're a shoe manufacturer, you've got 40% of your business is going to be with the government. So it's to be expected that any company is going to have, most companies are going to have a percentage of business with the government, state, federal, and local, that is proportionate to the GDP of the government.
--:-- Kara Swisher: So one of the criticisms of you is you'll pay enough taxes, if any. Can you address that? Because here you are getting money from the government. You obviously want a functioning government to be able to build all kinds of things and services. How do you look at that trade-off?
--:-- Elon Musk: Well, there was a bunch of very misleading stuff that was published by ProPublica. And really that was some sort of trickery and they did themselves no good service by doing that. First of all, with respect to the government contracts that SpaceX wins, our aspiration is to do the most for the least. And if you look at all the contracts we've won, we've won them because we have a better service at a lower price. They weren't just handed to us.
--:-- Kara Swisher: I don't think they were. That's what I'm saying. In fact, you called me and said we finally got in after years of this back sloppy. I think it's a great thing.
--:-- Elon Musk: That is a great thing. Absolutely. For the lunar lander, just taking that as one example, our bid was half the price of the Blue Origin Lockheed bid, half. For a vehicle that does basically 10 times more or eight times more, perhaps, our price was half. NASA has a mandate to get back to the moon, so we save taxpayers like $3 billion relative to that contract. So I think that's a good thing.
--:-- With respect to my personal taxes, I don't actually draw a salary or anything. My cash compensation is basically zero.
--:-- Kara Swisher: Which is a good thing because income is a problem for most people, because they pay taxes on income. That was the whole point of the story, I think.
--:-- Elon Musk: Yeah, yeah. So I do have stock options that vest. And so in the years that, but I basically with Tesla and SpaceX, I have just not really bothered to take money off the table, which is common. Most people do, they sell some of their stock and they take money off the table. For me, I just, like I said, my mind will be the sort of, it was the first in and it will be the last out. And the success of SpaceX and Tesla was far from assured. There were many times when it looked like the companies would, and they did, they skirted bankruptcy many times, but I never tried to take money off the table. And now this has been trying to be turned around and made into a bad thing. And this is messed up.
--:-- So when my stock options, just before my stock options expire, then I am forced to exercise and my top marginal tax rate is 53%. So I don't think that's particularly low, and it's going to go up next year. It's like probably 57% or something like that.
--:-- Kara Swisher: And you sell.
--:-- Elon Musk: Yes. And I have a bunch of options that are expiring early next year. So a huge block of options will sell in Q4, because I have to, or they'll expire. And my top marginal tax rate is 53%.
--:-- Kara Swisher: So you eventually will pay a lot of taxes.
--:-- Elon Musk: Massive, yeah. I mean, basically, the majority of what I sell will be tax.
--:-- Kara Swisher: I don't think it was alleging illegality. It's that wealthy people got to borrow against their stock.
--:-- Elon Musk: Yes, they were saying that somehow borrowing is a trick to get away from paying taxes. But it's more important to bear in mind that we've had a very long expansion in the economy, maybe the longest ever. And borrowing against stock is all sort of fun and games until you have a recession. And then you get the margin calls, and then you go to zero, which happens basically every time there's a recession. Stocks don't always go up, they go down.
--:-- Kara Swisher: Yours seems to. Most stocks have gone up, including some questionable stocks, frankly. Are you talking about yourself? I'm sorry. Are you surprised by how much has gone up and how wealthy you've become?
--:-- Elon Musk: I have literally gone on record and said I think our stock price is too high, in my opinion. It did nothing to stop the rise of the stock price. So what am I supposed to do? I'm not the one making it go up. But I think it's important to bear in mind, my actual tax rate is 53%. They're trying to make it sound like it was a big increase in the value of the Tesla stock. And then they added up, they're just very selectively poked the numbers to make it sound like I was paying very low taxes, but in fact, my taxes are very high. They're like over half.
--:-- Kara Swisher: When you pay them, when you will pay them.
--:-- Elon Musk: Yes, and a huge amount will be paid in the next three months because of expiring options. And there was like one year where I think my taxes were basically zero. The reason for that was because I had overpaid taxes the year before. I forgot to mention that.
--:-- Kara Swisher: You didn't call them back.
--:-- Elon Musk: I'm not going to call them back. They have no interest in the truth.
--:-- Kara Swisher: Oh, okay. All right. We'll be back with more from Elon Musk after the break.
--:-- Kara Swisher: Welcome back to this bonus episode of Pivot. Here's more of my conversation with SpaceX CEO Elon Musk. Let me ask you a question. Twitter. Let's finish with Twitter and then let's get to questions from the audience. What's going on with you and Twitter? I am a Twitter addict. I say the wrong things all the time. What is it? Someone explained it to me, it was very close to you, saying it's your release valve. This is where you feel better.
--:-- Elon Musk: Yeah, I think I said some people use their hair to express themselves. I use Twitter.
--:-- Kara Swisher: Do you regret any of it or not? You are kind of prominent.
--:-- Elon Musk: Yeah, I mean sure.
--:-- Kara Swisher: Walk us through when you decide to do a tweet. You go no no no.
--:-- Elon Musk: Well, I think about it for hours.
--:-- Kara Swisher: Do you? And I consult with my strategy team. You just literally go, yeah.
--:-- Elon Musk: Yeah. Yeah. Or maybe I'm wasted enough. Gone. Let me shoot myself in the foot. Now let me shoot myself a little bit, bam.
--:-- Kara Swisher: Yeah. That describes some of my tweets. Yeah. Are you worried about any SEC involvement in your tweets going forward?
--:-- Elon Musk: What does that stand for again? I mean, I know the middle word is Elon's, but I can't remember the other two words.
--:-- Kara Swisher: You need to answer me. You need to answer me. Are you worried they're going to say, Elon, stop fucking tweeting?
--:-- Elon Musk: You're talking about the Shorter Seller Enrichment Commission?
--:-- Kara Swisher: Yeah.
--:-- Kara Swisher: Short seller. That's the new name.
--:-- Kara Swisher: Yeah. I asked about the particular recent tweet you did about, you did one great tweet about time, saying time is the currency, which I thought was beautiful.
--:-- Elon Musk: Time is the ultimate currency, yes. No matter what resources you have, you can't wind back the clock. It's true.
--:-- Kara Swisher: Yeah. No matter how rich you are. Yeah. But then you did the Biden tweet. Can you explain that one?
--:-- Elon Musk: Oh, well, yeah. So Biden held this EV summit, didn't invite Tesla, invited GM, Ford, Chrysler, and UAW. The EV summit on the White House, didn't mention Tesla once and praised GM and Ford for leading the EV revolution.
--:-- Kara Swisher: So you were pissed. Does this sound maybe a little biased or something?
--:-- Elon Musk: So, you know, just not the friendliest administration. Well, it seems to be controlled by the unions as far as I can tell.
--:-- Kara Swisher: So are you waiting to get Trump back?
--:-- Kara Swisher: Who would you like to be president besides yourself?
--:-- Elon Musk: I would not want to be president at all. Sounds like no fun being president.
--:-- Kara Swisher: What do you think is going to bring our country together, if at all? Moving to Mars, what?
--:-- Elon Musk: Well, I think if there was some moderate sort of centrist president, then I think that would help. I think most people want a president who is just a very competent executive, not too far left, not too far right. And most people would prefer that.
--:-- Kara Swisher: When it comes out the election, you've got two choices. Maybe you don't love either choice, but you've got to pick one. Do you think that will happen?
--:-- Elon Musk: Do I think that will be what?
--:-- Kara Swisher: Centrist.
--:-- Elon Musk: I hope so. I hope so.
--:-- Kara Swisher: Are you worried about democracy?
--:-- Elon Musk: I'm not super worried about democracy.
--:-- Kara Swisher: Are you worried about democracy? A little smidge. What concerns you? A lot of the dialogue is getting a little... I study propaganda.
--:-- Elon Musk: Oh, yeah.
--:-- Kara Swisher: It's worrisome. The fact that it can happen here, it certainly can. I'm a Philip Roth kind of person, so. Yeah. But we're both having a lot of children, so we must believe in the future.
--:-- Kara Swisher: We have 10 children between us, correct? I believe, yes. You're slightly ahead, but you've got to rock it. Anyway.
--:-- Elon Musk: I do think there is, I think a lot of people think that there's too many people on the planet, but I think there's, in fact, too few. And that possibly the single greatest risk to human civilization is the rapidly diminishing birth rate. The facts are out there for anyone to look at. But a lot of people are still stuck with Paul Ehrlich's book, Population Bomb. It's like, that was a long time ago. That is not the case today. And there was a massive notch in demographics last year because the birth rate plummeted. And also this year. So, no babies, no humanity. You've got to come from somewhere.
--:-- Kara Swisher: Okay. We're going to end on that. We're going to get questions from the audience because there's a lot of great questions. Hey, Alana.
--:-- Ronan Levy: I'm Ronan Levy from Field Trip. We spent a lot of time talking about outer space. We want to ask you about inner space. The question specifically is, do you spend time thinking about humanity's somewhat destructive tendencies before sending people to Mars? And specifically, you've talked about the subject of DMT. I'm curious to know what role you think psychedelics may have in addressing some of the more destructive tendencies.
--:-- Kara Swisher: We're going to talk about this tomorrow. Okay.
--:-- Elon Musk: I think generally people should be open to psychedelics. Yeah. So, yeah. A lot of people making laws are kind of from a different era. So I think as the new generation gets into political power, I think we will see greater receptivity to the benefits of psychedelics.
--:-- Kara Swisher: Does humanity's tendencies right now concern you? Like about before we go to Mars?
--:-- Elon Musk: I mean, humanity's tendencies, we are at a very peaceful moment in history. You've got to separate the news headlines from the reality. I think Steven Pinker has really pointed this out, we're actually at the lowest violence per capita in human history. It may not seem like that, but objectively, those are the statistics. That's not to say there's no violence or there aren't things to be improved, but it's actually quite good. Big picture wise, I think we want to take the set of actions that maximize the probability that the future is good and that civilization continues and that the small candle of consciousness in the void that is humanity continues and the candle does not go out.
--:-- Kara Swisher: Okay, next. Over here.
--:-- Audience Member: Hi, Techno King. How do you respond to allegations...
--:-- Kara Swisher: You call him Techno King?
--:-- Audience Member: Yeah.
--:-- Elon Musk: That's just my formal title, I filed that with the SEC.
--:-- Kara Swisher: You've got to be respectful, Kara.
--:-- Audience Member: How do you respond to allegations that you're a living cyber genetic organism sent from the future to save us, and secondly I can either I confirm or deny that.
--:-- Elon Musk: He's good. He's good.
--:-- Audience Member: And secondly, what do you think the probability is that general purpose blockchains that have greater utility will eclipse the value of like a finished product in Bitcoin?
--:-- Elon Musk: Actually, I'm not sure how to answer that last one. I think just generally public ledger stuff is good because I'm a fan of open source and sunlight being a great disinfectant and the less things occur in the dark, the better. Blockchain is just a cryptographic ledger, an open ledger. So I think there's probably a lot of good things that can be done with that.
--:-- Kara Swisher: The first question?
--:-- Elon Musk: I said I could neither confirm nor deny.
--:-- Kara Swisher: Oh, good. Right here.
--:-- Alex Heath: Hey, Elon, Alex Heath with The Verge. The question's on the self-driving beta you guys are rolling out. Curious why you're encouraging people to not share videos and making them sign NDAs?
--:-- Elon Musk: No, I mean, there's a lot of videos being shared.
--:-- Alex Heath: But the NDAs?
--:-- Elon Musk: Pardon me?
--:-- Alex Heath: The NDAs for the full self-driving beta?
--:-- Elon Musk: I don't know. People don't seem to listen to the NDA. I'm not sure there's... Yeah, I don't know why there's an NDA. We probably don't need it. And people just are ignoring it anyway, so I'm not sure it matters.
--:-- Kara Swisher: All right. I'm going to ignore this. I'm going to keep getting questions.
--:-- Zia Yousuf: Hi, I'm Zia Yousuf from BCG. Could you talk a little bit about AI and robotics? You've expressed concerns in the past, but building some as well. What do you see as the issues that we do have to solve on that front?
--:-- Elon Musk: Well, I've said for a long time, I think AI safety is a really big deal. And we should have some regulatory agency that is overseeing AI safety. But there is not yet currently any such thing. And just generally, any kind of regulatory agency done by the government will usually take years to put in place. So, after the population collapse issue, I think AI safety is probably the second biggest threat to the future of civilization. And I'm not quite sure what to do with it.
--:-- Tesla is arguably the world's biggest robot maker because we have basically semi-autonomous cars that will ultimately be fully autonomous. And we are building a humanoid robot that will be basically like the car but with legs. I kind of held off on doing that for a while because I certainly don't want to hasten the AI apocalypse. But clearly, if you look at Boston Dynamics, those humanoid robots are going to happen. So they're really going to happen with or without Tesla. So Tesla has a lot more ability to ensure robotics safety and AI. And I'll try my best to do that.
--:-- Kara Swisher: Okay, last question. Sorry.
--:-- Rick Cutter: Rick Cutter with Cloud for Utilities. Thank you so much for the guard work you've done with Tesla driving the EV market. As we move towards more green energy, utilities are getting rid of their fossil plants, coal plants, investing in renewables. There's a difference in economic output they can deliver. Are you concerned at all as the growth of EVs continue? Do you think we could have a supply chain problem with energy?
--:-- Elon Musk: Yeah, that's a very good question. The full answer is lengthy. I'll try to give this the short version. If we shift transport to electric, then electricity demand approximately doubles, maybe a little more than doubles. And this is going to create a lot of challenges with the grid, especially for distribution to neighborhoods. This is why Tesla has the solar roof and solar retrofit, because even if you increase sustainable power generation at the utility level, you're still going to have a distribution problem where you need new high power lines, new medium power lines. You need to dramatically increase the size of the substations, which means you're going to have to start knocking down houses to increase the substation size. This is really unworkable unless you have significant local power generation at houses. I think it's actually very important that a necessary part of the solution is local power generation on the homes.
--:-- And then of course, we need large sustainable power generation developments, primarily wind and solar, but it needs to be paired with battery packs for steady state to provide continuous power. A lot of good things are happening in this regard. The growth of solar in the last several years has been incredible. I think it's like a 40% compound annual growth rate in solar and also a big growth in wind.
--:-- I'm also kind of pro-nuclear. And I'm sort of surprised by a lot of the public sentiment against nuclear. I'm not saying we should go build a whole bunch of new nuclear plants, but I don't think we should shut down ones that are operating safely. They did this in Germany, for example, and I think that was, and then had to create a whole bunch of coal power plants. I don't think that was the right decision, frankly. So one way or another, we're going to have to have a lot more electricity generation. And this is primarily going to come down to solar and wind.
--:-- Kara Swisher: That's going to be our next conversation. Okay. Our Tesla pouring solar. Sounds good. Okay. Can I ask you one more question? One time we talked a couple of years ago, Code, you said we were in a simulation. This past couple of years has seemed truly fucked up.
--:-- Kara Swisher: It feels like a bunch of teenagers from the future are just really smoking a lot of dope and fucking with us. Are we in a simulation?
--:-- Elon Musk: I mean, my heart says no, and my brain says yes.
--:-- Kara Swisher: Elon Musk. Okay, that's the show for today. Stay tuned for more bonus code episodes in the Pivot Feed.
