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Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast. This week, Cooper Tino Apple has an AI problem. Plus the world is actually a wash in those not so rare earth minerals, especially China. But don't count the US out. As you will hear from the CEO of MP Materials.
And the language app due Lingo is talking up its growth and investors are noticing. The CFO featured in the latest episode of The Chief Future Officer stops by.
Also, Elon Musk speaks a lot on Tesla sales, being CEO, plans for future political contributions, and his massive pay package gets tense at sometimes that's coming up in our next hour.
All that to come. We begin, though with one of the week's most read stories. It features exclusive interviews with Apple insiders about how Apple has been falling short when it comes to cracking AI.
This is a crisis. That's how one senior member of Apple's AI team put it to our team. For all the details, we caught up with our in house Apple expert, Mark German. He's the Bloomberg News Managing editor for Global Consumer Tech.
Mark.
I was struck by this. You know, just at the beginning of your piece, there's a picture of Phil Schiller introducing Siri back in twenty eleven, and there are these thought bubbles and it says will it rain? And Cooper Tino, what's the weather like today? Do I need an umbrella today? I was shocked to look at the small print and see that was from twenty eleven, because in my view, that's kind of what Siri still does.
Uh yeah, that's the problem.
That is a problem. Serie was revolutionary fifteen years ago. It was amazing for its first couple of years because we let's.
See, how do I want to say this.
It wasn't great, but it was still amazing and futuristic and sci fi and better than everything else. Then Amazon came around, Google came around, Microsoft came around, and they
just blew Apple out of the water. The technology is just all legacy technology that they've been using for a long while now for all intents and purposes, we're not talking about a serie that's based on the same large language models and foundation model technology that you're seeing from open AI and Gemini from Google and you know, in thropic you name it, and so yeah, they have fallen way to the way south.
Well, speaking of Google, there was a big hire there from twenty eighteen who was supposed to be the guy who did AI at Apple.
He was supposed to be the guy who did AI at Apple, and he's still the guy who does AI at Apple. That's John gen Andrea. Biggest miss was generative AI. They seem to have not seen this coming, and if they did see it coming, they did little to nothing about it. They really, i'm told, started on the generative aipath after Craig Fedderigi, the head of software engineering, used chat GPT to finish some code for a personal project
he was working on over the holiday break. Did they take this little one week break at the end of December. He was working on some personal software, as one does, and he figured out the power, Yeah, figured out figured out the power of chat GPT and then immediately they set iOS eighteen for twenty twenty four. This is gonna be the big AI release for Apple. From a marketing standpoint, it was. They marketed it really well, AI for the rest of us, just like the computer for the rest
of us forty years ago. And you know, okay, we're good that. Yes, other than the other than the marketing, you know what.
Let's take a step back in the robotics world.
In the humanoid robotics world, the fundamental thing that a humanoid robot has to do is go to your kitchen, pick up a glass of water, and bring it to you without dropping it. Okay, Tim almost dropped his water all over him. So that's where I got the idea to mention this. The problem isn't so much the iPhone and the AI capabilities on today's devices. The problem is is can Apple make AI that's good enough to power a robot that's not going to spill their water like
Tim right there? It is, And so the worry is not necessarily about the technology today, but it's the technology of tomorrow in a decade from now, and so the iPhone, you know, its rain is going to be over at some point but that's not really what matters here. I think that's that's not big picture enough. The big picture is the next set of stuff. We've seen AI already lead to the car cancelation in part. There were many
other factors. But if Apple was able to get an L five car with tiptop AI and great safety features level five, yep, they would have brought it to market. So you know, we've already seen AI cost them one big category. They were supposed to have a big smart home push this year. It's been delayed. It was supposed to happen in March. Now it probably won't happen till the end of this year or next year. The AI
not working cost that. Now they're already having trouble coming up with use cases for AirPods and watches with camera and smart glasses with cameras because you need real good AI to use that. So the iPhone doesn't matter, it's everything that comes after it.
So why can't they get this right? Is it personnel? Is it culture?
Is it?
What is it both?
It's personnel mismanagement, it's culture. Apple's wired in a very specific way. I get into it in the story. They're wired to they sit down, they map out what they want to do, and then they make the investment to get there. AI sort of works the opposite. You don't know exactly where you're going to land. It's a little bit messier, you have to run a little bit faster, it's a little bit you know, more expensive to pull off.
And so it's just a philosophical product development question, right, And so Apple has to change.
AI moves so fast.
You know, there's a new AI provider or a major new AI technology on a weekly basis at this point, even more frequently. But Apple's wired to release one major software upgrade every year and a smaller software upgrade in the spring. So they're going to need to move away from that idea as well if they really want to stay at pace with the rest of the technology industry. So AI and Apple, it's just so interesting. It's like
putting two magnets next to each other. They're just going to push away, right, And so Apple's going to have to change at a very core level to really be able to make meaningful change and to have a meaningful improvement in their GENAI world.
You know, I'm thinking about this and they're mark when when you talk about Apple and you know this better than anyone else. People a common refrain, and I don't think this is true, but it's that Apple stopped innovating after Steve Jobs. And you can go and kind of look at Apple's share price in what has happened with investors in the way that Tim Cook has led the company.
The concern that I potentially would have in a situation like this as an observer, is, is this Tim Cook's legacy here missing?
AI?
First of all, I don't agree with the idea that Apple stopped innovating since Steve Jobs.
I agree with that. I agree with you.
No, no, I know you agree.
If you think about it.
They basically haven't innovated or done something wholly new since the iPhone. Right now, are we really expecting that? I think yes to some extent, But like you look at it, and like the iPad to the iPhone was like the vision pro to the iPhone, right, they're both different reincarnations of that same operating system. You put the Apple Watch in that category as well, So you have sort of the central product of the iPhone and you just kept building and building around it and building it up into
new form factors. And they haven't really done an entirely new product experience from the ground up, and so you know, at some point they'll get there, but right now it's about new form factors. And honestly, I'm not sure Tim Cook, sure anyone would have done a better job than Tinkcook over the last fifteen years or so since.
Steve Jaw has passed away.
So certainly could have they done a lot better, yes, but they've also could have done much, much, much worse.
You I want to ask you, does any of this matter because you write in the story being late to a potentially world changing advance isn't necessarily catastrophic for Apple, but there are risks of being late too.
Well, it's not catastrophic for Apple because being late implies that they're going to get there, and so you know, as long as they're late, it's not catastrophic. But they're going to need to get there because, like I said, they're going to miss so many upcoming technological waves if they don't master this. I said this to someone I was on the radio with earlier, and they were a little surprised. But think about it for a minute. You're
going to agree with me. AI is as core of a technology as the touch screen, right, that's a big bowl claim, right. So Apple is known for taking core technologies and pushing them to new form factors. And so multi touch touch screen, that's the type of touch being that to do multiple gestures at once. Let's you do the pinch and the swipe.
That's called multi touch.
That was a core technology that allowed them to build the iPhone and the iPad, all their macs and iPads and whatever they're releasing these days. The core technology at the heart of that are their chips, their in house process or design AI is the core technology that's going to enable robots the glasses to maybe'll look at cars again in the future. Who knows, It's not something they're looking at right now, to be clear. And so they need to master that court technology to get to the next.
Era of hardware. Apple's a hardware.
Company, right, and if they want to continue making the money they're making, they're going to need to do new hardware. And the way to do new hardware is to come up with new core technologies.
But they hired this guy.
You even printed it out.
I love it, Are you kidding?
But they hired this guy back in twenty eighteen. Yes, it's almost a decade, but getting close.
You're right, and that's that's unbelievable. But yeah, yeah, we're close to a decade since he's been there.
You're right, all right.
So from someone who knows this company so well, I mean, how are you thinking about or who are you watching or what are you watching? Internally? I mean the company?
Yeah, obviously listen to you.
They listen to others, have conversations saying where are you Apple? When it comes to AI John.
G Andrea Jgs, he goes by, I don't think he's long for Apple.
I is that good.
I'm not going to opine on whether it's good enough for a person to no longer be at a company, but I'll put it this way. They've already stripped him of all products related responsibility. They removed Siri from him, right, they remove robotics from him. They're going to probably remove some more things from him. They want to squish him down to a role that's entirely focused on large language model and courts AI technology research, which he's really good at.
And so I mean, if they're taking away seventy five percent of your remit, you know you may decide that the writing's on the wall. It's time to get out of here. I don't think it's going to happen imminently. I don't think he wants it to happen. But I think at some point a change will be made, whether it's because he decided or Apple forces hand. But I don't expect them to fire him. Apple doesn't do that for senior executives of that level unless you really do
something bad and for all intentsive purposes. JG's a great guy. He's very well liked, he's very respected in the machine learning and AI can can.
He get them to where they need to be?
He can be a piece of that puzzle.
Don't forget Apple is constructed by a functional model. So you have design teams, you have hardwer engineering teams, you have software engineering teams that bring together the product at the end of the day. If you dilute JG to only focus on AI research, but you have other people in charge of like AI product development, I think it's possible that that's a winning formula, but clearly him running all of AI was not a good formula.
We only have thirty seconds left. Could Apple acquire its way out of this? They've partnered with chat GPT Opening Eye.
Well, first of all, yes, they need to acquire as much AI talent as possible, but that's also another culture issue where they have this cultural allergy to integrate large scale companies. The Beats acquisition internally disaster, the Intel Modem acquisition for a billion and twenty nineteen disaster. They just have a terrible track record of taking these humongous companies
and pulling them into Apple. So you know, it's a cultural thing through and through that they need to make some shifts on.
That was Mark German, Bloomberg News, Managing editor for Global Consumer Tech.
You're listening to Bloomberg Business Week. Coming up the races on for rare earth minerals.
We'll hear about what's already happening in the US with the CEO of MP Materials. This is Bloomberg.
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Well on Wednesday this past week, Russia's largest oil producer bought a giant Siberian rare earth deposit, which may become an area of cooperation with the United States.
Russia, encouraged by President Trump's talk of economic deals that could follow a peace agreement with Ukraine, has been working on a list of projects and assets that officials hope might interest the US.
Now.
This comes as appetite grows in the US for new sources of critical minerals following China's decision to curb exports of rare earth materials.
For more, we went to the experts. This next company knows all about extraction, refining, manufacturing when it comes to rare earth minerals from A to Z, and it's happening right here in the US.
Jim Latinski is co founder, chairman, and CEO of the three point three billion dollar rare earth mining company MP Materials. He joined us along with Bloomberg News Metal Mining Heavy machinery reporter Jode.
We started by asking about the boom in the rare earth mineral industry.
It's certainly a very exciting time for us as you as you mentioned, you know, we're the only company in the world, and that includes Chinese industry, that has the expertise from the resource all the way through to the magnet. And what I stress again and again when we think about rare earths, because it's very topical. A lot of
times people talk about extraction. You know, you hear Ukraine, Greenland deep sea mining, or even with the President of South Africa getting you know, a stern dress down in the Oval Office talking about how he has rare oaths too. We could have all the rarests in the world, but if you can't refine them and turn them into magnets, you don't have a solution for the issue.
So, Jim, do you have that solution right now? Because we spoke with Joe a little earlier this year, he reminded us that it kind of doesn't matter if you can extract it here in the US. You got to be able to refine it. And in some cases, with some of these elements, ninety percent of that is happening in China. What exactly can you do on the refining level here in the US, so great question.
There are two places in the world that you can refine at scale, the Chinese of influence predominantly China, a little bit Malaysia, and then in California in Mount Pass, California, which is our site. We actually I think some people would be surprised by this, but we refine today more than half of the concentrate that we produce. So we are refining at scale as we speak, and expanding that rapidly.
So we have brought this capability back to the United States of America, and we're the second largest producer of rare materials in the world today.
So one thing I just want to follow, because I think you guys know this world so well, Jim Into, But I mean when you say refine at scale, what exactly are you talking about. I'm just saying that people are listening like, okay, what does that mean?
You know?
A simple analogy, Carol would be think of oil and gasoline. Right, You could get oil out of the ground, but you can't put it in your car until it's in the form of gasoline.
Right, you refine it.
In this case, you basically take an ore out of the ground, you concentrate it so it's a highly concentrated ore with the rareth in it. But then to get the separated rare earth that you would then turn into a magnet, refine that concentrated or into an oxide, and then not to lose the audience. But you take that ox side, you turn it into a metal and alloy and then a magnet and so and just last point
on that that I think is really critical. At Mountain Pass today we not only mine and refine, but we now send that or to a magnet factory that we built from scratch at Greenfield in Fort Worth, Texas.
I'm actually talking.
To you from our factory and it's on a street called Independence, So we called Independence, but we are making auto grade magnets here at our factory in Independence in Texas, with material that we mine and refine in California. And we're in the process of scaling up this facility. We have a foundational contract with General Motors, and so we will be providing General Motors with magnets at scale at the end of the year, with material that is mined and refined in California.
Jim, I want to kind of get away from the nerdy science. I know you and I can talk about that all day, but I do want to talk about what does matter to the average person here in the USA, which is you can't do all of this on your own. You cannot. While you might have the full supply chain, you cannot be the sole supplier of critical materials, specifically rare earths and the magnets. You've said that to me
for years. One of the things you said to me years ago was listen, the point is not overnight being the sole provider to yourself domestically. It is slowly pulling market share away from China. What are the kind of conversations you're having right now on this front, on the staatecraft front, and maybe you could tell us a little bit about THEMU You signed with Madden, the Saudi Aribbian mining company just last week on this front.
Yeah, sure, thanks, Joe. Well, it's a great question.
We've said all along our mission is to restore the full supply chain to the United States. We've obviously done that in small scale and we're scaling that up, but we really want to be part of a broader solution
to eliminate the single point of failure. As you mentioned, I was in Riad last week as part of the delegation of business leaders from the United States with the President and in the presence of the President and Crown Prince MBS, we signed an MoU with Modern, which is the Saudi mining company, to explore the process of essentially building a vertically integrated rare earth magnetics business in Saudi Arabia. And so what that would mean is we would mine, refine,
and make magnets in the Kingdom. And I think from from their standpoint, it's a really exciting opportunity to be to create a mid East hub that could receive feedstock from from there certainly, but also Africa and some other places and really position them well geopolitically. But more importantly, I would also say that, you know, it really solidifies what we've been saying we are and I think, you know, each step of the way are showing is that we
are America's national champion. We're the only company in the world that can provide a solution in house to mine, refine, and make magnets. And so I think the vertically integrated approach that we've had is starting to be recognized by the world as you know, something pretty extraordinary that we've built inside MP And so it was nice that the President and the Crown Prince recognized that.
So, yeah, you know, we'll run that.
I mean, I mean it's interesting you're very much saying it's partners, we don't go it alone. It's not just the United States figuring it out. We'll work with the
trade partners to figure it out. I think another question I have as you came out of the gates guns a blazing on your earnings call recently with investors, and you pointed out, listen, it is very important that we work at the administration to figure out the solutions to basically getting a hold of these rarers and these permanent magnets that are domestically or friendshored produced.
Can you tell us a little.
Bit about the kind of conversations you're having with the administration or even the Defense Department.
Sure, so, a really important just background context, if we go back about a month ago to Switzerland with the trade talks with China.
At that point, we were and a lot.
Of people don't know this or maybe don't appreciate this because you know, we're they're not in necessarily the rare with magnetics niche, but we were weeks away, in my opinion, from a shutdowns across our economy in aerospace and in auto because the Chinese had essentially stopped shipping rare with magnets and our supply chains were really starting to break down, and so Obviously, Fortunately we came away with a deal there and we're not gonna see those kinds of shutdowns.
But we were really close, and that is a leverage point that the Chinese have in any negotiation. And again, whatever your view is on the relationship with China, whether it's you know, sort of going to be a collaborative relationship moving forward that gets reset or something much worse, we need to take this leverage point off the table, you know. That's that's our view at MP. That's what our mission has been. We've been at this for years. Is let's make sure that the United States of America
can produce our own rare with magnetics. And the reason Joe, that that is so important and you mentioned DD is because as we've seen around the world, physical AI is the future of warfare. We're talking robotics and drones, and I think we see that from whether it's Elon Musk or Jensen Wong talking about the scale of robotics and how large that industry is going to be. It is not acceptable for American companies downstream. We're talking about trillions
of dollars of enterprise value. Our great leading companies as well as our Department of Defense to be relying on a single point of failure in the Chinese supply chain, and so we serve a critical role in alleviating that risk.
All right, So it sounds like you're making the argument for why the US government should be involved, But is the government US government? Is there appetite for the US government to be a partner in rare earth projects and doing it from A to Z, from mining to processing to permanent magnet production.
There is no question that the United States government recognizes this. And I think that these things take time, but there's no question that they recognize. And Joe was referencing our perspective on the earnings call, which is this is actually very doable. We are, you know, in a very short period of time away from solving this challenge in a large scale, and frankly, MP can lead that effort. And what we said is that MP, you know, we've been
at this for a number of years. We've invested over a billion dollars of private capital, and you know, since we went public and then prior to that, we we had the good fortune, I guess of taking control of several billion dollars of previously invested capital. So we have billions of dollars of invested capital, and what we've said is we'll lead this solution, but it's not fair on
our shareholders to expect them to take the risk. We're going to need to do this in a capital light way for MP it should be very rewarding for our shareholders for being in this position. So, so the to answer your question, you know there will be movement forward. In my opinion, I think it's a question of getting these solutions don't happen overnight, but there's no question that there are a lot of conversations happening with government and industry and we're leading those.
Okay, so it sounds like government's involved, they're listening and we should maybe stay tuned for news. What kind of money is needed to be committed to do the proper buildout in your view, whether it's public private partnership, and just about thirty seconds on that.
Yeah, the really simple answer is we're talking single digit billions. This is a really simple problem to solve. Actually, I jokingly say for the coffee budget on the F thirty five, we probably could have solved the rarer issue.
This is really small.
Wow, And so I do think that the United States government is going to step up. I think you're going to see industry players step up as well, because this is just it's an issue that affects our national security and trillions of dollars of enterprise value, and it's actually a small problem.
You mentioned that we could do this in a short period of time, give us years or some sort of timeline that we could actually move away from a single point of failure when it comes to this problem.
Well, we're bringing that online now in Texas. So where I'm sitting is a factory. You all are welcome to come see it, and so we'll be making magnets at scale here at the end of the year. And then the question is what percentage of the industry do we need to satisfy to remove this single point of failure risk, Because we don't need to solve one hundred percent, but
we need to do a material percentage. And so I think the next step would be for us to lead a solution where we're building something significantly larger and then rinse, repeat to add a number of facilities both here and as we announced with the MoU, potentially in the Saudi Arabia and other places. So it really is not a huge issue. It's just an issue that requires capital and execution.
Right, And I think on that point, like it's not just going to be you, it does still require a lot of other actors to come into the space. And I guess the quick follow up again is what are we going to see from the government this year in terms of commitments to help this space, your company and others build out the supply chain on rare earths and permanent magnets.
Well, just to be crystal clear, as we all know, the capital markets can satisfy this problem if the existential issue of the industry is off the table, and the existential issue is Chinese mercantilism, right, is pricing. We've got to get proper functioning economics, proper functioning market economics for the price of these materials and the price of the downstream products. And so those are a variety of ways
that the government can can force that solution. You've heard a lot of them in the news, and certainly we're working on them. I think you'll see a variety of things across investments, tariffs, tax credits, and so there isn't you know, sort of one fits all solution it's really going to be a question of, you know, the preferences of government, and certainly you'd have to get some of them on here to ask them directly or stay tuned for you know, a solution that you see us present
one day. But I do think we're going to see something you know, sooner than later, because we've got to solve this problem.
That was Jim Litinski, co founder, chairman, and CEO of the three point three billion dollar market cap rareth mining company. It's called MP Materials. He joined us along with a Bloomberg News metal mining heavy machinery reporter Jo Dell and just.
To say I'll go to when it comes to rare earth minerals and so much more. All right, Still head on Bloomberg Business Week, how learning a new language translates into a growing business big time over a dual lingo.
We hear from CFO Matthew Scarupa, the subject of the latest episode of Bloomberg's Chief Future Officer. This is Bloomberg.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and the Android Auto With the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play.
Bloomberg eleven thirty Dual Lingo plans to use artificial intelligence to significantly expand its course offerings beyond languages and reach more learners globally. All according to its Chief financial Officer, Matt Scarupa. He's featured on the current episode of Chief Future Officers on Bloomberg Television, which you can get on the Bloomberg Terminal and on Bloomberg dot com as well. And Tim you hosted the episode You like you will get into this company and the CFO, Yeah, we did.
We talked to AI. We also talked how Dulingo is betting heavily on global markets. They've got this particular focus on China, all about the opportunity of teaching people English as a second language. We also had Matt on Business Week Daily this week. We started by asking him about the growth of the language learning company.
You know, we've done a great job of growing this year. Our Q one performance was strong top to bottom. We saw a really strong user growth. That user growth translated into a really strong top line and bookings and revenue, and we were able to keep control of costs like we historically have been able to to expand margins, and it wasn't just a Q one story. As we guided on our last earnings call. We believe we're in a
really strong position for the rest of the year. We feel good about Q two and the rest of the year, and it's going to continue to come from the same sources. We're a company that grows primarily organically by word of mouth, and we expect that to continue.
Hey, Matt, good to have you join us. Thanks for doing this today, and thanks again for participating with us for the CFO Show. Ten point three million paid subscribers as of the end of the first quarter of twenty twenty five, it's growth of forty percent year over year. How much can how long can you continue that growth? I mean, when we're talking the growth at that percentage, like that's pretty substantial.
No, I appreciate it was great to do the show with you, and I look forward to seeing that. In terms of growth, we've done it for several years. I mean, we went public in twenty twenty one, and if you look back from then to now, we've grown the top line really nicely. So i'd say that you know, you look back and you think that we have a strong path going forward as well. I'd also just call out that the ten point three million sub ubs is great.
We're excited about that. We feel really good about that growth. But we're also seeing really nice diversification of subscribers. So we have continued strength in our Family Plan, which is a subscription where multiple friends and family can join, and as of the last quarter, seven percent of our subs we're on our Max tier, which is our highest tier service, which has features like video call with Lily, and it's
doing really well. So it's a great story not just on the overall top line numbers, but on how we're growing the subscribers.
I mean, that's wild, almost fifty percent year every year growth. Matt, I am curious, who are these people that are signing up? How long do they stay with you? And what's the cost to acquire an individual user?
Yeah, So one of our core business model advantages is that when we acquire a user, we acquire them mainly for free. We do spend on performance marketing and some brand spend, but it's relatively small as a percentage of revenue, and so most of our growth comes from people telling their friends and family that they've had a great and
engaging experience with our app. That's why Luis is so focused on engagement as a core driver of growth for us, is that if you have this wonderful, joyful experience, you're going to tell people about it and they're going to try it. And then the other way is we have a really amazing social first marketing strategy where we you know, insert ourselves into viral moments on online TikTok, Instagram, other platforms, and users create their own content which goes viral, and so on any given day, a.
Lot of what people are talking.
About on dual Engo isn't generated by us, It's generated by our you know, beloved fan base.
You know.
When you have that type of viser acquisition and it is global, we're seeing strong user growth around the world. We get a lot of opportunities to then convert folks from free subscribe to paid or from free user to paid subscriber, and they stick around on the platform and they come back frequently, and so we get multiple chances
to convert them. And while we're doing, while time is progressing, we're making the subscription product even better and better so that's how we grow the subscriber base.
Well, we'll talk a little bit in a minute about the social first marketing, because something kind of wacky seems to be happening right now if you look at the social channels for dou a Lingo. But I'm wondering specifically mad about growth and about you know, at the end
of the day, the efficacy of the product. And I'm wondering how you measure to what extent the product actually resonates and works for people who are trying to learn English as a second language, for example, to be able to do business in the US, or to be able to do business in English. How do you measure that?
Yeah, well it is core to our mission.
So our mission is to you know, build the best education in the world and make it universally available. And so to do that, we need to prove to our users and to ourselves that we're teaching really well. We've had some studies done that show just how efficacious we are. So you know, if you compare us to learning a language in a university, we are on par with that.
You can probably do it faster on dual lingo.
And you know, there's plenty of evidence we've put on our website that shows those studies in detail. I think the bigger evidence is that we're continuing to add features that just really address some of the core desires of particularly English learners like you reference they want to practice conversation, and so what we've done over the past you know several quarters, is add this feature called video Call with Lily, where you can practice your conversation with one of our.
Characters, Lily. She's a bit passive aggressive, she's not impressed.
I've yet to impress her with my Spanish, and I don't think I'm going to, but I'm going to keep trying.
Well, she's the.
Thing, and yeah, I just want to say, she's over your right Well, we're looking at pictures of her on the screen right now. There's also a next she's next to duo over your right shoulder. So that's the Carol. That's Lily, who's not impressed you. By the way, in the last couple of months, has unfortunately become a member of my family.
It seems like with doing this with that.
Acual love, it's passive aggressive.
Yeah, Lily is not impressed with me, and so that kind of practice, though, is really helpful for folks.
Who are trying to learn English. They're trying to.
Learn how to speak it, and that's what we've been able to do over the past little bit.
So you use AI in a few different ways. Lily is certainly one of them. When you think about the cost associated with this. You're not using AI that a platform that you developed actually at dual Lingo, you're outsourcing the technology. How do you keep those costs in control because that's pretty expensive tech, Matt, and you know you're watching the bottom line and you're watching margins here.
Yeah.
Absolutely, And you know it comes down to the fact that we have been using forms of AI, machine learning and what not for a long time.
In our company. The lesson you get served up, you.
Know, has for many many years been based on a machine learning algorithm. And now with generative AI, with video call with Lily and in some of our content creation, we are seeing that there's an amazing advancement in this technology that helps us do these things much quicker and more even producing more content that we thought was possible.
You know.
For example, you know, it took us about ten years to create the first hundred courses and then in less than a year with this new technology, we created more than one hundred more and so this technology is really powerful. The good news about it is that the costs are coming down naturally. You know, we don't have to do much internally, although we are still doing things to optimize the costs. But just by the nature of this technology, we're seeing rapid declines in the cost and we don't
know for sure that that's going to continue. But if it does, you know, I think that you know, the use of this will go up and margins will be will be good.
I just want to know. I'm one hundred percent Slovak, and I just want to know how long would it take me to learn a language with you guys? I know a few keywords, you know, your parents, your grandparents teach it, the squear words and all that good stuff. But how long does it take for someone to learn certain languages?
Sure, well, you know, I don't know that I've ever met anyone else or talked to them live on air. But I am also Slovakian, which is which is quite the coincidence, But I think, yeah, that's that's a very nice coincidence. It turns out more will depend on your ability to put in the time. You're learning a language takes practice, and that's why we're so focused on engagement. We want you to enjoy our app and come back every day because it's going to take time to learn.
So if you're really committed and you want to learn any language on du or Lingo, and you put in a bunch of time, you're going to learn it much faster. And that what the research shows, and so it's really motivation dependent. What we find is that the hardest thing about learning a language isn't verb conjugation or grammar or speaking.
It's your motivation to keep practicing and keep learning.
And that's why most of our company is geared around bringing you back every day and making sure you're engaged in the product, because if you're engaged in the product, you have a chance to continue to learn.
Yeah, the gamification, the alerts, the emails like the friends Streak, all the stuff that brings you back into the program. Matt, I promise that we would go to this unhinged marketing and social media strategy because you got to shed some light on what exactly is happening across duelingos social channels right now. I checked in on it yesterday and this morning, and it looks like Duo has been taken hostage. There's like some sort of hostage video. Everything else has been wiped.
What can you tell us, Well, I can only tell you that our owl is truly unhinged.
You can never predict what that guy is going to do.
I was like my co host, I'm just gonna tell you, Matt, never know what he's gonna do. Anyway, go ahead.
I've only spent a little bit of time with him, but you know, I kind of can see it. Love O our AWL mascot earlier this year, right after the Super Bowl, decided that he was going to fake his own death and then you know, return and so like, you just never can predict it. I would just encourage everyone who's watching and listening to check in again tomorrow.
You'll you'll get some interesting insight.
That's Matt Scarupa, the chief financial officer of Dua Lingo Carol. What's interesting about this company? It's a tech company. Yeah, Hi, margins Ai first not based in Silicon Valley. They are in Pittsburgh. They've got this DNA with Carnegie Mellon University, Luis van On. That's where he came from. He's been working with AI for decades. He won a Genius Award the MacArthur Foundation.
Genius Aqua with those low achiever types, right.
Yeah, back in like the early two thousands and two thousands for his work on AI.
What struck you about this company? Because you've been talking about it a lot since you talked to them, the CFO, the CEO, and did the profile for chief Future Officer, and you even played around with it big time.
Oh yeah, I mean I'm now actually hooked. I mean yeah totally. We language are learning well, learning Spanish with my son. We do it together every night. And then we also are using doing chess on the program too. So they do chess, they do music, they do math.
All right, everybody. That wraps up our first hour of the weekend edition of Bloomberg Business Week from Bloomberg radio Head. In our next hour, he's easily one of the most talked about individuals of our time, whether he is sending rockets into space are bringing stranded astronauts home.
He also drills tunnels, he sends satellites into space. He disrupted the auto industry. He's even implanted computer interfaces into a couple brains and yes, he was once known as President Trump's first buddy.
Yes, indeed, folks, we are talking about the one and only the world's richest individual, Elon Musk, who spoke with our own Michelle Hussein at the Qatar Economic Forum in Doha this past week. That forum program by Bloomberg News.
That full conversation up next.
You're listening to the Bloomberg Business Weekdaily podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Plenty ahead in our second hour of the weekend edition at Bloomberg Business Week, a holiday weekend edition. I should say so this is something special, and by that when we say plenty, we really do mean plenty and plenty from Elon Musk. This past week, he gave a wide ranging interview to Bloomberg's Michelle Husain at the Qatar Economic Forum, which was programmed by Bloomberg News.
They spoke for about forty minutes and really touched on everything from his political spending, the Department of Government efficiency, and his relationship with President Trump.
And of course Michelle started the interview where else, but on Tesla.
The company is offered in recent months what you've called blowback. So what is your plan for turning that around? The declining sales picture? And by what stage do you think you're going to be able to turn it around?
Oh, it's already turned around.
Give me some evidence for that. I've just been looking at the sales figures for Europe in April, which show very significant declines in the big markets.
Europe is our weakness market. We're stronger everywhere else. So now our sales are doing well at this point, we anticipate any any meaningful sales shortfall and the you know the obviously the stock market recognizes that since we're now back over a trillion dollars in market cap, so really the market is aware of the situation. So it's already turned around.
But sales still down compared to this time last year in Europe.
In Europe, okay, and yes, that's that's true of all manufacturers, there's no exceptions.
Does that mean that you're not going to be able?
Does that mean you're quite weak?
Okay? But you would acknowledg wouldn't you that what you are facing? Okay, let's just take it as your What you are facing is a significant problem. This Tesla is an incredibly aspirational brand. People identified with it, it saw it, They saw it as being at the forefront of the climate crisis. And now people are driving around with stickers in their cars saying I bought this before we knew Elon was crazy.
And there are also people who are by buying it because Elon's crazy, or however they may view it. So, yes, we've lost some sales perths on the left, but we've gained them on the right. The sales numbers at this point are strong and we've seen no problem with them had So what I mean? You can just look at the stock price if you want the best inside information.
The stock market analysts have that and us it wouldn't be trading near all time highest if it was not, if things weren't in good Jake, They're fine, don't worry about it.
Okay, I was citing sales figures rather than share price. Well, tell me then, how committed you are to Tesla. Do you see yourself and are you committed to still being the chief executive of Tesla in five years time? Yes, no doubt about that at all.
Well, no, I might die.
Okay, sure to that.
Let me see you if I'm dead. So slight mode.
Does that mean that the value of your pay doesn't have any bearing on your decision?
Well, that's not really sort discussion in this forum. The I think, obviously there should be a conversation for if there's something incredible is done, that compensations should match that something incredible was done. But I'm confident that whatever the whatever some activist posing as a judge in Delaware happens to do will not affect the future compensation.
This is the judge who twice struck down the fifty six billion dollar pay package that was awarded to you. I think the value on the basis on the current value of stock options.
Yeah, not a judge, Not a judge, the activist who is cars playing a judge in a Halloween costume.
Okay, that's your characterization. I think the on the current value of stock options. I think the.
Actual justice according to the law, on the current.
Value of stock options. I think the value of that pay package stands at about one hundred billion dollars. Are you saying you are relaxed about the value of your future pay package? Your decision to be committed to Tesla for the next five years as long as you are still with us on this planet is completely independent of pay. No, it's not independent, So pay is a relevant factor then to your commitment to Tesla.
A sufficient voting control such that I cannot be ousted by activists investors is what matters to me. And I've said this publicly many times, but let's not have this whole thing be a discussion of my list pay. It's not a money thing. It's a reasonable control thing over the future of the company, especially for building millions, potentially billions of humanoid robots. I can't be sitting there and one're going to get tossed out by for political reasons
by activists. That would be unacceptable. That's all that matters. Now, let's move on.
Okay, Well just one question, well one question before we move on to other companies, which is that I wonder if some of what you've has happened to Tesla in the last few months, did you take it personally?
Yes?
And did it make you regret any of you all think twice about your political endeavors.
It is I did what needed to be done.
Uh.
The violent antibody reaction and I'm not someone who's ever committed violence, and yet massive violence was committed against my companies, massive violence was threatened against me. Who are these people? Why would they do that? How wrong can they be? They're on the wrong on the wrong side of history, and that's an evil thing to do, to go and damage some pointocent person's car, to threaten to kill me. What's wrong with these people? I have not harmed anyone,
so something needs to be done about them. And a number of them are going to prison and they deserve it.
You're well, you're referring to the attacks on Tesla showrooms, but I.
Think, well, it's into showrooms and burning down cars unacceptable. Those people will go to prison, and the people that funded them and organized them will also go to prison.
Don't worry, wouldn't you coming from you, wouldn't you, hm, wouldn't wouldn't you acknowledge that some of the people who turned against Tesla in Europe were were upset.
At your politics, and very few of them would have been violent in any way. They just objected to what they saw you say or do politically.
Well, it's certainly fine to object to political things, but it's not it's not fine to resort to violence and hanging someone in effigy and death threats, that's obviously not okayh you know, that's absurd. That is in no way justifiable at all in any way, shape or form. And some of the the legacy media and nonetheless have sort of justified which is unconscionable. Shame on them.
Let's talk about your other companies then, in other business areas SpaceX. I saw that you said in a speech at the West Point Military Academy recently that the future of warfare is AI and drones, And obviously defense is an increasingly booming sector with the state of the world at the moment, do you see SpaceX moving into weaponized drones?
You certainly ask interesting questions that are impossible to answer. So SpaceX is is the space launch leader. So SpaceX doesn't do drones. SpaceX builds rockets, satellites, and Internet terminals. So SpaceX has a a very dominant position in space launch.
So of the mass launch to orbit the year, SpaceX will probably do ninety percent, China will do the half of the remaining amounts, so of five percent, and the rest of the world, including the rest of the US, will do about five percent, so SpaceX will do about ten times as much as the rest of the world combined, or twenty times as much as China, which is in China is doing actually a very impressive job. The reason
for this is that we're putting it into orbit. The largest satellite constellation the walls I've seen by far, so I think at this point about maybe approaching eighty percent of all active satellites in orbit are SpaceX and they're providing high vand with global connectivity throughout the world. In fact,
this connection is on a SpaceX connection. So I think this is a very good thing because it means that we can provide low cost my bandwidth Internet to pots the world that don't have it or it's very expensive. And I think the single biggest thing you can do to lift people out of poverty and help them is giving them an Internet connection, because once you have the Internet connection, you can learn anything for free on the Internet, and you can also sell your goods and services to
the global market. And once you have knowledge by the Internet and the ability to engage in commerce, that this is going to greatly improve quality of life from people throughout the world. And it has, and i'd just like to think anyone in the audience who may have been helpful and you know, with starlink and getting it to approved in their country. And I think it's doing a lot of good in the countries that have approved it, which is I think this point one hundred and thirty
countries are very happy with it. I don't currently into spaceally getting into the weapons business. That's certainly that's not an aspiration. Were frequent, we're frequently asked to do weapons programs, but we have does a lot of client.
Do you envisage SpaceX or indeed, starlink is a separate end city publicly listing in the near future or at all.
It's possible that starlink may go public at some point in the future.
And what would be the what would be the time frame, what kind of time frame you consider?
I mean no rush, I mean no rush to your public. The public is I guess a way to you know, potentially make more money, but at the expense of a lot of public company overhead and inevitably a whole bunch
of lawsuits which are very annoying. So there's really something needs to be done about the share shareholder shareholder derovative lawsuits in the US because it allows plaintiffs law firms who don't represent the shareholders to pretend that they represent the shareholders by getting a puppet plaintiff for a few shares to initiate a massive lawsuit against the company, and the irony being that extreme irony that even if the class they purport to represent were to vote that they
don't want the lawsuit, the lawsuit will still continue. So how can it be a class action representing a class if the class what against it? And that's the bizarre situation we've got in the US that needs into a dire need for form. As anyone's running public company, you've experienced this, it's an absurd situation that needs to change, will be really helped with frivolous lawsuits.
That was Elon Musk with Bloomberg's Michelle Hussain at the Katar Economic Forum.
You're listening to Bloomberg business Week. Coming up more from our Elon Musk interview, focusing on things like artificial intelligence and yes, his battle with open AI.
That's next. This is Bloomberg.
This is the Bloomberg Business Week Daily podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and the Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
We bring you more now from our interview with the world's richest man, Elon Musk. This past week, Elon spoke remotely at the Qatar Economic Forum, which was programmed by Bloomberg News.
We pick up with Elon addressing his lawsuit against open Ai after the company announced plans to restructure as a for profit business. He was part of the conversation with Bloomberg's Michelle Is saying.
Look, I came up with the name open ai as an open source and as a nonprofit, and I funded AI OPENINGI for the first roughly fifty million dollars. And it was intended to be a nonprofit, open source company, and now is they're trying to change that for their own financial benefit into a for profit company that is closed source. So this would be like, let's say you funded a nonprofit to help preserve the Amazon rainforest, but instead of doing that, they became a lumber company, chopped
down the forest and sold the word. He'd be like wait a second, that's not what I funded. That's open AI.
They've made some to their corporate instructure, though, haven't they since in recognition of of what you've said?
And now that's just what they told the media.
Okay, part they have part they have partly walked back their plan to restructure the business. I guess that's made no difference to how you feel about it. So you determined to see them in court of course. Okay, Well
that's certainly going to be one to watch. I also wanted to ask you about AI and regulation because when you were here last talking to John Micklethwaite, you had some pretty strong words about the risk that AI poses and you said that you really felt what the US was missing was a federal AI regulator, that you know, something along lines of the Food and Drug Administration or
the Federal Aviation Administration. Now you're clearly now in a zone where you're more on the cutting regulation side than wanting new regulators. So has your view changed on the need for an AI regulator?
Well, something, I don't think there should be regulators. You think of regulators like referees on the on the field in sports. There should be some number of referees, but that you shouldn't have so many referees that you can't kick the ball without hitting one. In many in most fields in the US, the regulatory burden has grown over time to the point where it's like having more referees than players on the field. And this is a natural
consequence of an extended period of prosperity. It's very important to appropriate appreciate this. This has happened throughout history. When you have an extended period of prosperity with no existential war, there's no there's no cleansing function for the for unnecessary
laws and regulations. So what happens is that every year more laws and more regulations are pasted, because you know, legislators are going to legislate, regulators are going to regulate, and you will get the steady pile of more and more laws and regulations over time until everything is illegal. And let me give you an example of a truly absurd situation. Under the Biden administration, SpaceX was sued for
not hiring asylum seekers in the US. Now, the problem is it's actually illegal for SpaceX under itard in National Traffic and Arms regulations to hire anyone who is not a permanent resident of the United States, because the premise being that they will take advanced rocket technology and return to their home country if they're not a permanent resident.
So we're simultaneously in a situation where it's illegal to hire slum SEUs and is also illegal to hire asylum seekers, and the Biden's partner of justice chose to prosecute us despite both paths being illegal. Down if you do, down if you don't.
Well, my question was specifically about a regulator for AI, which you said three years ago was needed, and you said we need to be proactive on the regulation of AI rather than reactive. Have you changed your mind on.
That, No, of course not. What I'm saying is that there should be some referees on the field, a few referees, but you shouldn't have a field jam packed with referees such that you could not kick a ball in any direction without hitting one. So the fields that have been around for a long time, such as automotive aerospace, if the sort of food and drug industries are overregulated, but
the new fields like artificial intelligence are underregulated. In fact, there is no regulator at all, so they should be Do you still think that yes, I'm simply saying, which I think is just basic common sense, that you want to have at least you want to have a few referees in the field. You don't want to have an army of referees, but you want to have a few referees on any given field, in any given sport or any given arena, industrial arena, to ensure help that public
safety is taken care of. But your already have, so there's there's a proper number of referees. Like I said, it's actually very easy to visualize this when compared to sports. If the whole field is packed with referees, that would look absurd. But if there were no referees at all, your game is not going to be as good.
Okay, So let's then talk about your new world, your your role advising government. You are in this unique and unprecedented position of having billions of dollars worth of contracts with the federal government yourself, mostly through SpaceX, and also now an insider's knowledge of it because of Dot. Can you see that there is a conflict of interest or a potential conflict of interest in broad terms, just through that very fact, I don't think so.
Actually, there have been many advisors throughout history and the US government and others who have had economic interests, And I absolutely an advisor. I don't have a formal power, and that's a president can choose to accept my advice or not, and that's that's how it goes. If there's a single contract that any of my companies that have received that people think is somehow not was awarded improperly, it would immediately be front page news, to say the least.
And if if I hadn't mentioned it, certainly my competitors would. So if you're not seeing that, then the clearly is not a conflict to interest.
The Yeah, there's another way though to look at it. That For example, you have many competitors, whether it's companies like Boeing or companies who would like to do more of the kind of work you do for NASA Blue Origin Rocket Lab. And because DOGE is in every federal government department, you or people who work for DOGE and you are the driving force behind it, have an insight into those companies' affairs and those companies' relationships with the federal government.
Now, all we do is we review the organization to see if the organization has departments that are no longer relevant. And then are the contracts that are being awarded good value for money? In fact, frankly, the bar is not particularly high. Is there any value money in a contract? And if there's if there isn't, then we make recommendations to the secretary. The secretary can choose to take those
actions or not take those actions, and that's it. And then any action that that is as a function of DOGE is posted to the DOGE website and to the DOGE dog govt at dog handle on the x platform. So it's it's complete transparency. And I have not seen any case where the best min not has even been an accusation of conflict because it is completely and utterly transparent. That's it.
And what about the international dimension. Now, let's think about Starlink. Starlink is obviously a very very good internet service. It's sought after all over the world. It's critical to the frontline in Ukraine. It has also had more contracts coming its way, and there is some evidence that companies are allowing access to it because they want to be close
to the Trump administration and send the right signal. So Bloomberg broke news today that the South African government is working around the rules on black ownership in order to allow starlinkin and that is being done on the eve of the visit the President Ramaposa is going to make to the White House. Do you recognize that as a conflict of interest?
Now? Of course, first of all, you should be questioning why is there why the racist laws in South Africa. That's the first problem. That's what you should be attacking. It's improper for the racist laws in South Africa. The whole idea with what Nelson Madella, who was a great man, proposed was that all races should be on an equal footing in South Africa. That's the right thing to do, not to replace one set of racist laws with another set of racist laws, which is utterly wrong and improver.
So that's that's the deal, that all races should be tweet equally and there should be no preference given to one or the other, whereas there are now one hundred and forty laws in South Africa that give that basically give strong preference to you if you're black South African and not otherwise. And so now I'm in the subsided situation where I was born in South Africa but cannot get a license to operates in starlink because I'm not black.
Well, it looks like that's about It looks looks like that right, It looks like that's about to change.
I just asked you a question. Please answer. Does that seem right to you? Well?
Those rules were designed to bring Those rules were designed to bring about an era of more economic equality in South Africa, and it looks like the government has found a way around those rules for you.
Ask your question?
Is this is your interview?
Everyone wants to hear from your question, yes or no?
Not for me to answer. I have got a question for you about about your government works and the amount of savings.
Do you like raceless loves?
This is not for me to answer. Come on now, you wouldn't be trying to dodge a question.
Do you have to answer this question? Answer you answer mine?
I say, I think if you I'm sure you can have that conversation directly with the South African government if you want to. I want to ask you about the total believe. I want to ask you about the total allound. I want to ask you about the total amount that you're planning to save through Doge's work before the election, you said it was going to be at least two trillion. The number currently on doze dog gov is one hundred and seventy billion dollars. That's a big change. What happened to the two.
Trillion or do you expect it to happen immediately?
Well? Is it going to happen because those is supposed to run till next July.
I mean your question is episode in this fundamental premise? Are you assuming that on day you know, within a few months this an instant two trillion saved?
No, I'm not sure. I'm just asking you, is that still your aim?
Then?
Is it still your aim to get the amount of time?
Have we not made good progress given the amount of time?
That's exactly what I'm asking. So, is it's still your aim to go from one hundred and seventy billion to two trillion?
The ability of those to operate is this function of whether the government and this includes the Congress, is willing to take our advice. We're not the dictators of the government. We are the advisors, and so we can advise. And the progress who made thus far I think is incredible. Those team has done incredible work. But the magnitude of the savings is proportionate to the support we get from Congress and from the executive branch of the government in general.
So we're not the dictators. We are the advisors. But thus far for advisors with the George team, to their credit, has made incredible progress.
That was Elon Musk with Bloomberg's Michelle Lusain at the Guitar Economic Forum. The full conversation is on the Bloomberg podcast page on YouTube. Also check out the annotated transcript. Yeah, it's really really cool. It has really good contexts. You can get it at Bloomberg dot com and also on the Bloomberg terminal.
You're listening to Bloomberg Business Week coming up even more from our Elon Musk interview, focusing on Elon's plans to listen up everyone pull back on his political spending.
Okay, we'll see TV with the Brain of Salt.
That's next.
This is Bloomberg.
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Let's get back to our interview with the world's richest man, Elon Musk this past week. As we've been noting, he spoke remotely at the Guitar Economic Form, which was programmed by Bloomberg News.
We pick up with Elon addressing his recent time in Washington and putting together the Department of Government Efficiency. Here's part of the conversation with Bloomberg's Mishalie Saint Dosh.
Is an advisory group. We are doing the best we can as an advisory group. The progress made thus far as an advisory group is excellent. I don't think any advisory group has done better in the history of advisory groups of the government. But we do not make the laws, nor do we control the judiciary, nor do we control the executive branch. We are simply advisors. In that context, we are doing very well. Beyond that, we cannot we cannot take action beyond that because we are not some
sort of imperial dictator of the government. There are three branches of government that art some degree opposed to that level of cost savings. Unless let's not criticize whether there's four trillion. Instead look at the fact that that our sixty billion has been saved and more we save two.
And as I said, I think everyone can agree that cutting waste and indeed fraud in any government and being responsible with taxpayers money is a very good thing. Finally, political, your political influence. I wondered whether you have decided yet how much you're going to spend on the upcoming mid terms. You spent a lot more money on the last US election than you envisaged when you were speaking here three years ago. Are you going to continue to spend at that kind of level on future elections?
I think in terms of political spending, I'm going to do a lot less in the future.
And why is that?
I think I've done enough?
Is it? Is it because of blowback?
Well, if I see a reason to do political spending in the future, I will do it. I don't currently see reason.
What about political influence beyond the US? How often do you speak to President Putin?
I don't speak to President Putin.
You've never spoken to President Putin.
I was on a video caller with him once about five years ago. That's the only that's the only speak president President Putin. Oh, you must I get it.
Speak. Actually, I've heard you. I've heard you speak about it, for example, in your West Point speech. You said, oh, I challenged President Putin to uh to was it an arm wrestle? And I know the Wall Street Journal has reported your reported conversations. If you're if you're saying they haven't happened other than once, I'll take that as red.
Is there a worse publication on the face of the earth than the Wall Street Journal. I wouldn't use that tolign up my cage for character things that that newspaper is the worst newspaper in the world. You know, if there's one newspaper that should be pro capitalist, it's the one with Wall Street in the name. But it isn't. So I have the very lowest opinion of the Wall Street Journal. Absolute answers, and you clearly have believed the tripe that you've written. That you've written in those papers.
I read, I read very widely, and I'm putting these questions to you so that you have an opportunity to respond to them, which you are and for which we're all grateful to hear your responses.
You mentioned to be challenging. I did so on the X platform. I challenged Vladimir Putin to single, but I didn't talk to him. That was a post on the X platform. That's why.
That's why I asked you, and you've and you've clarified and explained, thank you. That's that's why I was asking whether you have had reported conversations, and you've said you have.
Ad okay, legacy media lize.
Okay, listen. I actually thought I might give Grock the last word, because when I ask Rock what your hardest challenge is, it said the strain of managing multiple high stake ventures made financial, regulatory and public relations crises. And I wondered whether you recognize that characterization and whether you do think that this is a pivotal year in your life.
Well, every has been somewhat pivotal, and this one's no different. I mean in terms of interesting things that hopefully our coverers this year, the getting Starship to be fully reusable, so that we catch both the booster and the ship, which will be the first fully reusable orbital rocket ever in history, which is the essential breakthrough necessarily to make
life multiplanetary and ultimately become a space faring civilization. We've got neural link which is now helped by patients restore capability using the telefty implant, where they're able to control the computers by thinking, we'll be doing our first patient to restore bland resource site with our blind site implant, which is the at the end of the show early next In fact, that that first patient might be in UEE, since we have a relationship with YOUE and the Cleveland
CMIC there. I think what's running on the AI front, we are close to what you might call AGI or digital superintelligence. We are seeing an explosion of digital super intelligence.
Here was Elon Musk talking about pulling back on political spending with Bloomberg's Michelle Assan at the Qatar Economic Forum. We've got Max Chafkin with us. He's the co host of the new Bloomberg podcast, Everybody's Business. He's also the co host of the not so new podcast but still pretty great podcast. It's called Elon Egg. I'm glad that's what we played because that's getting a lot of attention
right now. And I heard that, and I went back to Elon's Twitter from March of twenty twenty four, and that's when he posted on X this is overgo. I will not contribute to either political candidate. And we all saw what happened. A few months later, My point is he says stuff and doesn't necessarily commit to it.
Yeah, and even here he's building himself an out Right, he's saying less money, which you'd kind of expect anyway, Right, midterms are not as expensive as presidential years, So like, it would be very surprising if he dropped another three hundred million dollars, which is roughly what he spent in twenty twenty four, on twenty twenty six. And he's also saying, you know, I would It's I don't see a reason now, but if I did see a reason in the future,
I could I see this as a public negotiation. Right, this is the audience here, well, aren't There are several different audiences. One of course is Tesla shareholders trying to say, like, look, I'm I'm focused on the company. I'm not getting sucked into Washington, going to try to deal with some of the brand damage that my political presidence has caused. But of course the other audience is Republicans. Right, He's putting it out there that if they want money from him,
they're going to have to do stuff. And you know, there's lots of stuff that has happened in Washington since Donald Trump took office. That I think has made Elon Musk really happy. But Elon Musk is a very long list and not all those things have happened. There are lots of opportunities for him to get contracts. You know, the Golden Dome as you're discussing like that's a potential revenue source for SpaceX. There are lots of areas that Elon Musk stands to benefit. You also have this in
the bill right now, like they're plan cutting these EV subsidies. Now, we will see where that ends up. But if those EV subsidies are cut completely, that could really hurt Tesla. So I think I think it's to his advantage to say, hey, I'm you know, I'm not a gimme for twenty twenty six.
You have to win my support.
Talk to us about robotaxis. Elon told CNBC that Tesla plans to begin operating a fleet of about ten self driving robotaxis in Austin next month, before growing to one thousand VA within a few months. His words, sending the company stock story.
So the robotaxi thing, I think part of the challenge. One of the challenges for Tesla is there's so much sort of assumed in the stock. The Tesla bulls basically believe that almost overnight they're going to be able to
turn this thing into a massive, massive business. And I think everything we know from the history of other companies trying to launch these robotaxi things, and I'm thinking particularly of Waimo, Google's driverless car division, which has been doing this for like ten years and has really struggled to commercialize,
is that it's going to take a long time. And when you look closely at what Musk is saying is going to happen in Austin, if you are not paying that close attention, if you're just sort of buying this, like on robin Hood, you hear Elon must say, you know, robotax going to heal over the world. You think they're going to turn this on they're going to be huge fleets. It's going to be very small.
You know.
On the during the earnings call, we learned something like ten to twenty robotaxis with tel operation. So that's people, you know, sitting in command centers making sure the cars don't hit anybody.
That's going to be curely. What Weimo does by any means no, it's it's.
Closer to it's maybe what weimo did you know years ago, and it's just it's a realization.
I think that this is going to take a long time.
So I don't know. Elon Musk has this kind of amazing ability to spin stories about the future to get people excited about the future.
And he may be able to do that.
But like Tesla stock has gone up a lot in recent weeks, you know, I know some of that has to do with you know, terriff expectations and so on, but this is a very valuable company relative to the number of cars it sales.
Max in the interview that he gave to our team at the Guitar Economic Form, he was asked about protesters or the Tesla brand damage, and what he answered was he said, quote, they're on the wrong side of history and that's an evil thing to do. That's referring to people damaging Tesla cars and showrooms. Something needs to be done about them, and a number of them are going
to prison and they deserve it. It seems like he's certainly there were reports of damage to Tesla vehicles and damage to test Tesla' shrooms, but there have also been these protests that have been happening at Tesla showrooms all over the country, especially during his work with Doge, that we're not violent. Yeah, it seems like he's He's also in the past talked about these people being part of some bigger movement. He's referred to them online as being paid. Have we seen any evidence of that.
No, there's no evidence, no good evidence that the people who are showing up at these Tesla protests are paid. You know, I would say that there's a he's conflating a couple of different things. But you know, and having talked, we did a podcast episode on Eline a week and a half ago with a former Tesla sales manager, and who he's talking about is like, the real danger is not these protesters, not somebody's showing up to a protest.
It's just somebody not buying. And and like that is a thing that even if you remove the protests, the protests are of course not good for the brand. They're an expression of unhappiness and so on. It doesn't lead to good headlines. Obviously protests can sometimes get out of hand. But also it's just a lot of people, I think do not want to be associated associate their car with
something this controversial. And what he was saying is that when Musk started, what this Tesla manager was saying is that when must started getting involved in politics a couple of years ago, they had people come into the Tesla stores and argue and say, you know, I like the car, but I don't like this. You know, still very engaged. And what he said what changed as Musk became more and more engaged is they just stopped coming. They just decided, you know, screw this, Like I don't want to be
associated with something this controversial. And when you look at what's happening in the sales, like that's what's showing up. It's not the protesters, it's just the people not buying. And that's the thing that's going to be hard to turn around, I think.
Our thanks to Max Chafkin, co host of the new Bloomberg podcast Everybody's Business of corresponding for Bloomberg Business we Can, co host of the Elon Inc.
Podcast.
He's a busy dude, but he is definitely a go to when it comes to Elon Musk. And that wraps up the weekend. A Bloomberg Business Week from Bloomberg Radio. Thank you so much everyone for joining us.
I'm Tim Stenerbeck and I'm Carol Masser.
Have a good and safe weekend.
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal