Why We Need to Pay Attention to Elon Musk Again

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From the Vox Media Podcast Network, this is Channels with Peter Kafka. That is me. I'm also Chief Correspondent at Business Insider. And today we are focusing on Elon Musk. Which feels a little weird to say, since we have already spent an enormous amount of time focused on the world's richest man, you could argue we've spent more than enough. But now Musk is approaching a truly meaningful moment for him and maybe for the rest of us.

via the IPO of his SpaceX conglomerate. It could be the biggest IPO in history. So yes, it is time to talk about Elon again. Specifically, what is SpaceX in 2026? Is it a rocket company or an internet company or an AI company or all of the above? What does Musk want to do with it and why is he taking it public? And what does Musk in 2026 mean for everyone else? Remember, just a year ago, Elon Musk was co-president of the United States. He was selling Teslas on the White House lawn.

And yes, he and Trump broke up, but they seem pretty chummy again these days. Just recently, for instance, he was reportedly sitting on a call between Trump and Indian Prime Minister Narendra Modi over the future of the war in Iran. Seems like someone we should pay attention to.

Here to focus our attention is an actual Elon expert. That's Bloomberg's Max Chafkin, who has spent years reporting on Musk and the ecosystem around him. He's smart, he's perceptive, you are gonna like hearing from him. So here's me talking to Max Chaffkin. I'm joined by Max Chafkin, who is an excellent Bloomberg Business Week columnist focused on the intersection of power, money, and the tech industry. He wrote an excellent biography of Peter Thiel called The Contrarian.

He podcasted exclusively about Elon Musk for a year and he has now moved on to a new podcast which is called Everybody's Business. Everybody's Business. So go check that out as soon as you finish listening to our conversation. Welcome, Max. Hey Peter. You know, some of us did not stop paying attention to Elon Musk even when he left the White House. You were required

Had to by your employers to keep paying attention. It is weird. Like he's omnipresent, I feel in my life, but it definitely feels like the volume and the attention he was getting Uh certainly during Doge, that has gone away. It's kind of

remarkable. We can talk about sort of why he's lower he's lower profile, but the profile is going to get very big. There's gotta be this giant SpaceX IPO, which is the reason for us to have this discussion, but it's really a jumping off point to talk about Elon broadly.

Um and congratulations to you for surviving a a year of exclusively podcasting on Elon. That's I don't know if that is acceptable OSHA requirements. Um here's a basic question for you. What is SpaceX? SpaceX is Elon Musk's rocket company. But when you ask that question, you're kind of asking, like, how do they make money? And there are like

three different businesses inside of this company space area. This used to be a simpler question, right? Exactly. So it was originally founded by Elon Musk in the early 2000s. As a NASA contractor. NASA at the time was looking for basically cheaper ways to get. supplies up to the International Space Station. Elon Musk in in very audacious fashion, y you know, not not a huge amount of outside belief in this company early on.

Said, how about me? I'll do it. And he built this rocket company that makes a very reliable. relatively inexpensive way, primarily for NASA, also other parts of the Defense Department. Also some private companies. to send stuff into and out of into orbit. And this is one of the reasons everyone in tech used to and I think and many of them still do swoon over Elon because they were doing photo sharing apps and stuff like that. And this guy was doing electric cars and then rocket.

And that impressed the heck out of everyone in Silicon Valley. Yeah, not just rockets, but this like very kind of easy to get your arms around business, right? He's he's just operating essentially like an airline, but for space.

uh on a on a very different scale, obviously it's it you know, rockets are much harder to send up and you can't send as many of them and so on. That's one business that is the most stable part of of Elon Musk's entire business empire. Like even across Tesla and X and the Boring Company, these other uh ventures that he has going on at the same time. But SpaceX now has these other additional sort of revenue streams. And the the most significant one is called Starlink. This is a satellite internet.

Provider. It competes with companies like VISAT, you know, the which does the internet on your airplane, although it does so. in a sort of very audacious way that allows it to deliver internet not just to airplanes and to the Defense Department, but also to regular people. They have something like nine regular people, armies. Armies, yeah. And so so it's partly a defense contractor kind of looks in certain ways

like Elon Musk's normal rocket business, but then there's this sort of growth industry of adding residential subscribers. No one knows how big that could possibly be. I I you know I think Getting broadband to your home delivered by Elon. And that used to be a fantasy, and people talked about that for a long time. But there are it's called what fixed.

fixed wireless providers, T Mobile, Verizon, so the telcos are now getting into this. Um and now he's getting into it as well. Uh but as a bracket used for people in rural areas. Like you live in somewhere where the cable lines Don't go. My my in-laws, for instance, the only way you could get internet was from companies like Hughes. And the internet was pretty slow. It was you couldn't really upload. You couldn't do video chat. It was and it was pretty expensive.

SpaceX because the satellites are lower in space. uh the internet essentially works better and there are more of them. It's a it's a really audacious thing with a huge number of satellites. If you're a astronomy buff, you know that if you're stargazing now, you will see starlights, Starlink satellites all the time. So he has

He has sending rockets into space business, part of SpaceX, that is connected to putting satellites so we can have satellite internet. All right, I kind of have my head around that. But over the last year Twitter SpaceX has also become other things as well. Yeah, so SpaceX has now merged with this company, XAI, which is sort of like a uh overgrown version of Twitter, the company that Elon Musk.

took over in this, you know, forty four billion dollar acquisition a couple of years ago. He used that to spin up an AI, like an AI chatbot. It's called Grok. It's famously His version of open AI. His version of of anthropic, his vers uh he's entered himself into the LLM fight. Absolutely. And and Elon Musk's LLM is, you know, supposedly anti woke. He's his he's sort of positioned it as as the right wing version of anthropic. Uh I I I would say most of what Grok is used for right now.

is by people who are on X But but he is inserting itself and he's he's competing for the same business that OpenAI and Anthropic are competing with enterprise, with the governments. Yeah. So you have this V super high leverage, potentially like high reward, but extremely money-losing company. Uh XAI, just like Open AI, just like Anthropic, it's losing billions of dollars a year.

And just Because you're spending all this money for data centers and all the associated costs and there's very little money coming in in in his case in particular there's very little money coming in. Aaron Powell Yeah, very little money coming in and even less, you know, Twitter actually had as you know Peter a Like a not a great but like an okay advertising business.

Uh before subscale was how it's doing about five billion a year before Elon bought. Now it's sub subscale. It's about half as big as it was Be you know, largely because Elon Musk did a bunch of things that alienated the advertisers and we could have a whole conversation about that. But that weird money losing chatbot company is also now SpaceX because Elon Musk merged them. So he's he's done this financial engineering to roll up many, but not all of his companies.

into this thing called SpaceX, which is supposed to go to public sometime later this spring. Um we don't know what the actual numbers are yet. He hasn't filed publicly yet. Um by the time you hear this podcast he may have done a confidential filing and numbers will leak out.

But what you hear bandied about is he wants to raise fifty to eighty billion dollars, which would be the most ever raised in an IPO. He's would like the company to be ra uh valued at one point five trillion, give or take, which would make it Not the biggest company in the world, maybe one of the top ten biggest companies of the world by by market cap. When that IPO eventually comes to market and people can invest in this, w what will they be buying? Are they buying

the rocket company, are they buying Starlink? Are they buying the idea that this is a this is a AI company that they can get in on the ground relatively early? Or is it just it's an Elon company? If Elon is running it, I want to invest in it. I mean if the valuation were lower than what you just said, any of the explanations you offered would be plausible.

Uh SpaceX, as I said, the the sort of rocket part of SpaceX is a good business. It is not worth anywhere near, you know, two trillion dollars, which is as high as it could go. You also left out the last bit, which is that if this happens, Elon Musk will probably be a trillionaire if we get to those high valuations, be the world's first trillionaire. I'm rooting for him. I think we all are.

The thing that people are buying is essentially the wild futuristic visions of Elon Musk. So, in tandem with announcing this merger between XAI and SpaceX. Elon Musk said, We are gonna build data centers in space. He actually it's it's weird as somebody who's followed, you know, I I I wrote the first story that I wrote about Elon Musk was like in two thousand six. It's been a while since I've talked to him, but I knew him for a very long time.

And for all that time, the big goal was Mars. He was everything about Elon Musk. Colonize Mars. Colonize Mars. We know build a Mars colony. And and that was part of you brought up the fact that A lot of people in Silicon Valley had have this had and have is kind of like extreme crush on Elon Musk and it it's really about the it's the Mars thing. It's like this guy, he's not just building photo apps, it's it's not just that he's building real stuff. It's that he wants to

Take humanity to the stars. He has this big crazy goal and remember when no no one remembers anymore, but you know, remember when J F K said we're going to the moon and and and it's that sort of like romance of the big swing and we're gonna explore and what a cool idea. Now He's kind of pivoted in the last couple of months. He you know, he still says Mars is a long-term goal, but now the goal is data centers in space. and a moon colony.

And the reason for that, the moon colony is because the US government is not gonna pay for a Mars mission anytime soon. We are doing a very expensive program to to bring people back to the moon. So that's that pivot. But the real pivot is data centers in space. This is what Elon Musk does really. He like reads

what people are interested in and then he and what's hot right now and what investors in particular are likely to value highly. And right now, that is data centers. There's also this concern and you're you're seeing kind of like a political backlash. to data centers being built in particular places. You're seeing local opposition. There's also, you know, Iran war. We've got power concerns. And and so there's all of this

anxiety about are we gonna have enough data centers and where would we put them? And Elon Musk is offering Uh I think what he sees and his an an enthusiasts would see as a perfect a answer. So there's plenty of room and space for data. There's kind of some logic. I own a rocket company. I own an AI company. I need data centers. I can put the data centers in space with my rocket company. And you can find I you know much more about this than I do. You can find reasonable people to say

That's not th the dumbest idea in the world. There's lots of issues with it, but it in theory could maybe work. So there's the it's it's tethered to some kind of reality. But also it just sounds like wild, crazy shit, which is something that people like hearing from Elon. And I think I think whether you're a critic of him or his biggest fan, you say, Yeah, he throws stuff out there that's pretty crazy and wild and a lot of it's not gonna come true.

But some of it has come true. He did build this rocket company. He did build uh essentially an electric car company from zero and essentially created that market and you can quibble with all of that. But he's done these amazing things. So before you say Data centers in space, that's stupid, or going to Mars, that's stupid. He might pull it off.

Yeah, that's that's the theor that's the theory there. And and what's also kind of nice about data centers in Mars as opposed to launching rockets or operating a large residential broadband business. Is there there's no financials really to look at on this one. You know, one can just imagine Yeah, one set of things exists today and the other things could exist one day. So to bring us all the way back to the IPO, when you imagine them selling the story.

Are they are they selling the story of we have a great business today and who knows what could happen in the future, or is it let's be clear, this is all about future and you're just going to come along for the ride. And people told us that Tesla couldn't support the valuation it had for a car company. And we said it's not a car company. It's a tech company. Just trust us.

And maybe that's worked, maybe it isn't, but it has worked financially for it. So I mean, you know, i we're still in Elon Musk is still selling this to investors. So I think to some extent this is an open question. But I I I I think it's pretty easy to answer this because he's done the exact same thing with Tesla. So my expectation is he will say we have a dominant space business, which is true. He has a near monopoly.

the launch business. When when he threatened to stop working with the when the y when he had his butt dust up with Trump, and we'll talk more about that later. There was a period where Trump said, Oh, we're gonna cut off your contracts now, Elon. And Elon said, All right, well I fine. I'm no longer gonna work with NASA and good luck getting your your satellites. And then there was an immediate like, Oh, we didn't really mean that. We're gonna keep working together because literally

the US government depends on his business at this point. Yeah, it would be hugely disruptive. It's not like they couldn't, they could, but it would be hugely expensive, hugely disruptive. and it would require us to make nice with the Russians, which is the other way you can get stuff to and from the International Space Station. Um He's saying we have a dominant business in lawn. We have a very good and and fast growing business.

in Starlink. Who knows how how big that could get? I think there are real important questions that you could ask about how good this Starlink business is. The r the these low earth earth orbit satellites, Essentially fall back down. They burn up, they they won't land on our heads, but you have to keep sending new satellites up.

pretty much continuously to keep the the Starlink network going. It's going to be very expensive to maintain. There are also questions about the bandwidth, like how many customers can this network support and how much better can the th sort of the technology for sending internet to individual people get so you could support, you know, instead of nine million people, maybe ninety million or nine hundred million.

But you're he's gonna say this is a big and growing business, which is true. And then you have this essentially multi-trillion dollar opportunity. And that's kind of that zone is where the Elon Musk enthusiasts. are are sort of focusing. And it's where all the attention is with Tesla. It's why you look at Tesla, his car company, It's had a disastrous

couple of years. It's sa it was supposed to be this super fast growing electric car company. Elon Musk makes nice with Trump, becomes kind of a right-wing influencer troll and alienates a huge number of Tesla's customers, turns this fast growing car company into a ac into a shrinking car company. Growth has kind of leveled off. Maybe it's it's taking up a tiny bit, but it's it's lagging the rest of the electric car industry. He hasn't released any new products. The company like by normal

sort of Wall Street metrics. If this were like a normal company He said, You have here's your car company, we're gonna evaluate it based on the way we evaluate any car company. It would be worth way less. You know, I probably would be worth more than GM and Ford, but you'd you'd have an argument about it because it makes fewer cars than the big car companies.

But with Tesla, everybody's focused on number one, robotaxis, this kind of futuristic technology that has essentially been a futuristic technology. for like half of my journalistic career, more than half of my journalistic career for like fifteen years. and and and is still kind of out there in the future somewhere. And now humanoid robots. Tesla has a a robot that is that Elon Musk has said is gonna be everything.

from a uh you know, a worker in his factories all the way to your friend. Your buddy. Your buddy he calls it. Need uh normal human friends because you've got your optimus. And again, they haven't sold any of those. I I I there are huge questions about the economics of that, whether anyone wants a robot friend, and so on, but that is where investors are. So the common theme here is there's a thing that exists that you could evaluate.

Um as a business, whether it's Tesla or SpaceX and that's one that's one thing. And then there's the future. And again, all companies sell themselves on the future, but Elon takes it to a crazy extreme. I'm gonna I'm gonna make the most audacious claims and prognostications. I'm gonna constantly change what those prognostications are.

You may rightfully come back and say, Hey, you've been promising robotaxis or self driving cars for years and years decades now. Uh you're not delivering and you go, Well,

Who cares? Yeah. Uh and people are comfortable with that, at least as investors. Well, and uh as you know, he's not the only one. I mean, the other day Melania Trump walked out in the White House with a a robot from a a competing company figure, I believe. And but the thing is Normally when Silicon Valley guys say, I'm gonna have data centers in space or humanoid robots.

That's worth something, but there is a very, very high chance that they'll fail. So so you know, the valuation is marked down from the potential$10 trillion opportunity to something way lower. And Elon, because he has this huge Enthusiast base. You know, the the retail shareholders in Tesla, it's a much higher percentage than a normal company. He is like

A a Mompa investor. Robin Hood people, basically. And and yeah, and and mom and pop and you know, Robin Hood guys. It's it's around forty percent of the actively courts those folks. He explicitly courts them. It is a huge part of how he runs the company. Tesla is sort of like half a normal industrial company and half a meme stock. It it it's it's not as meme stocky as AMC or something, but it's definitely like way more meme stocky than Toyota. A lot of a lot of investors.

are just buying it because it's fun, because they like Elon, and and and so they are not doing a sophisticated financial analysis. And also stock goes up. Yeah. And stock goes up. And so at some point I mean I've talked to people who are grown up investors and they say it doesn't really

I can't justify investing in Tesla, except that it would be irresponsible for me not to do this with my clients' money because the stock keeps going up. And for me to say, This the the the evaluation doesn't s isn't supported by the tech and the business. I can be right but

I actually need to be in this company. And that is why that company has continued to thrive as a stock well after all the meme stocks we saw collapse during the pan after the pandemic and and why AMC is back to being a nearly bankrupt. Theater company, et cetera. Tesla has remained undamaged by any of that. Yeah, absolutely. And and that is the bet with SpaceX as well. Um, we're we've we've gotten some reports that Elon Musk is gonna try to get

as much as thirty percent of the initial shareholder base to be retail investors. That's like way higher. I think the normal percentage about 10%. Not as high as Tesla's uh retail shareholder base. But the idea will be to take this amazing Fundraising engine that he built with Tesla, which combines his celebrity, his role as kind of a, you know, like a political influencer. And the business celebrity, and he is able essentially to move Tesla's stock price almost at will. I think at some point.

this will break down because you said, Peter, that people feel like they can't afford To invest in Tesla because the stock has just been going up and up and up. But you know, you look at the stock over the last five years, that's not quite true. I mean, it is a basically flat over that period of time. Now, if you invested in Tesla in twenty eighteen.

you have done incredibly well. And and and there are there are moments in there where the stock is very swingy. So depending on when you buy it, maybe you've done well, but there are also people who buy into this thing and and lose money, just like any other kind of meme stock. We'll be right back with Max Chafkin, but first a word from a sponsor.

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And we're back. Elon Musk has been able to raise a gazillion dollars for SpaceX. A lot lots of the people, lots of the institutional investors who are in SpaceX were already in Tesla. They basically say, look, we'll back Elon no matter what. He's already made us a gazillion dollars. Of course we're in there.

Elon Musk is the world's richest man. He has this publicly traded company at Tesla. Why is he taking another company public? What d what does this accomplish for him? It's such a good question because for years I brought up the sort of pivot on Mars. For years, Elon has said, I don't want to run another public company. He he famously tried to take Tesla private uh a few years back. Um

He has been adamant that SpaceX doesn't should not have to live under the scrutiny of being a publicly traded company. I think there are couple of things going on. And I think this is not unique to Elon Musk and SpaceX. It is a good time to take a cup company public right now, especially if you're an AI company, especially if you are a Trumpy kind of company. You know, we've seen this huge run-up. The markets have given it back a little bit.

But, you know, it's a hot market if you're in AI. It's a hot market if you're connected to the most powerful uh person on the planet, which Elon Musk is. And so I think it's it's opportunistic and I think it's about trying to get this thing onto the public market and into this amazing financing engine that he's built for himself. you know, before the market shifts, before maybe we see a a pullback on AI, or, you know, Democrats are currently favored.

to retake the House, they may retake the Senate. We saw these kind of vibes on Wall Street, this kind of Trump trade thing happen. And I would not be surprised if if you start to see a a swing away from that, we will see kind of a a Trump sell, right? So he there there are multiple factors that could put pressure on the stock market if Democrats retake power. And so I think it's a it's a good time. I think you could also Make an argument.

that he increasingly like doesn't have a choice. That the amount of money that he is trying to raise is so big, it would be hard to do that. But what why why does does he need to raise the money for the SpaceX business? Does he need to raise the money for the AI business, which is very, very capital intensive. And again, there's companies like OpenAI and Anthropic, which are generating many, many billions in revenue. are still struggling to keep up to fund that.

he doesn't have that revenue coming to to AI. Is it is this is this something he needs to do to keep that business going? If Elon Musk were a different person and he had just sort of limited himself to being a NASA contractor, he would not need to. Is probably pretty profitable. So Space S could stay private and then you're not sure. Yeah, and and just be kind of the way he used to frame it as this pseudo philanthropic.

I I just want to help humanity get to the stars and and maybe be a defense contractor. And yes, this is an incredibly valuable business, but I don't need to take it public. There's other ways for me to extract value from it. Aaron Powell What he has said is that if he does that, if he just

limited his ambitions, it would take too long. We wouldn't be able to get to Mars or the Moon, you know, in our lifetimes. I think there are still questions whether we'll we'll see it in our lifetimes, even with the super optimistic version. But what he's saying is

to do this, we need to, you know, hypercharge it. We need to have a base on the moon. We need to have much bigger rockets. So so SpaceX is building this much larger rocket called Starship that that still hasn't really worked. Like it they've they've had sort of partial successful tests, but it hasn't done what it's supposed to do yet. And that is necessary to make Starlink

economical. So Starlink is not economical yet, I don't think. And and certainly XAI is uh is losing, you know, huge amounts of money, just like OpenAI and Anthropic. So he, because of his Because of his ambitions, maybe if you're a Elon fan, you say because of his idealism, whatever, he's just trying to make it as big as possible. And he's not, you know, uh the same thing with Tesla. If he just

contented himself to run the world's most successful electric vehicle company, you know, Tesla would be a great business. Tesla's car business is great. He runs a publicly traded company, Tesla. He's gonna have a second one, SpaceX, and he runs them in his Elon way, so they are constantly sort of they're commingling employees and financing and lots of good governance. People would say, You can't do any of that, and he basically does it and

No one stopped him from doing it. Is there a point where he says, actually running two publicly traded companies sucks? Why don't I just combine them all into one mega company? I mean, he's already floated that that idea. There were there were reports in addition to the reports about XAI and SpaceX merging. There were there were reports about Tesla and SpaceX merging. So Tesla just had this big event. They're going into the chip business.

They're building what he's calling a Terra Fab. G the the Giga was the old thing, Terra is the new thing. A a a Terrafab would produce like, you know, more chips than the world produces in a year. Yeah. And this is a essentially like a joint venture with SpaceX because The chips are going in. Can you guess where they're going? They're going in the data centers in space. Um, so

Those those two and and guess who's gonna work on the who's gonna build this data centers in space? It's gonna be Optimus. Your your friend who's bringing you coffee is also gonna be in space constructing data centers. So in a lot of ways he's framing the two companies kinda as one company already. And I think that in the long run, there is a high likelihood that that if

investors don't revolt. Like assuming these IPOs go well and assuming Elon Musk's, you know, sort of business celebrity stays where it is, but those are big assumptions, I think they will eventually merge. And and I I say that not only because these these two things are now going to be in business together and their their stories are really intertwined, not only because the shared, you know, executive structure, the fact that they have the same CEO.

But they will have the same shareholder base. You're gonna have, you know, the same retail investors who are enthusiasts in Tesla also buying SpaceX. And I think that's one of the big questions about this IPO is like, are there enough of these

mega you know, multi-trillion dollar companies. So we're talking about uh financial engineering and then there's what in r what always seemed to be an inevitable breakup, you've got two enormously powerful men with uh uh appropriately sized egos or extra sized egos.

Um it seemed impossible they could ever share the same space for any amount of time. And they do break up. Yeah, absolutely. And I think part of it is what you just said, there's an interpersonal dynamic. There's also the fact that uh Tesla sales were cratering at the time. So I think So the work that Musk was doing to promote Trump.

was incredibly unpopular with his customers. In in a way and'cause I I you know, I I focused on Twitter which we became X, and you could really see Elon Musk destroying the value of the thing he bought, telling advertisers to go fuck themselves. and and really pushing away a a big core of Twitter users and s the to this day the business has not recovered from it. You can deb you can argue that it's

still an important platform. That's fine. But he went ahead and basically said, I'm gonna emulate this business. I'm gonna set it a aflame. Um and I could s not do that. I could not say terrible things or upset people, but I'm

I'm gonna go ahead and do it. And didn't care. But with Tesla it seemed like a lot of what he was doing did directly affect his business. I mean, he was doing what he did to Twitter advertisers, but to Tesla's car buyers. Right. And essentially Particularly in Europe, but in the US, people said I don't I don't want my car to be a billboard for Elon Musk.

But it's very urban. It's it's a thing that in in in suburbs basically. It's a blue state, blue city kind of thing. And and even the Republicans who are buying Teslas Are not into the most extreme parts of Trumpism. It was like he he was staking out a politics that was so far removed. From where his customers were and doing all these incredibly controversial things to the point that there were protests, you know, in front of Tesla stores. Tesla stores were getting like attacked in Europe.

And this is why you you have Trump and Elon while they're still buddies literally putting uh Teslas on the White House lawn and doing a sales promotion. Well and then the other thing that happened is in addition to being super unpopular with Tesla's customers. What Elon Musk was doing in government was also started to become clear that it was unhelpful to Donald Trump. And I think that's why Trump starts to push Elon away. You had

There's probably a version of Doge that would have been really popular. Uh Americans like the idea of making their government More efficient. But what Elon Musk was doing was essentially taking government workers and humiliating them. And and and that, I don't think.

was popular really with anyone except the really sort of most ideological parts of the right. And the thing about coming in and saying we're gonna cut a trillion dollars in the budget, which was never going to happen anyway, but if you the point is if you come in and say we're gonna cut massive amounts of the federal government out.

You may hate in your mind this part of the government or that part of the government or you imagine a a government worker is a certain kind of person you don't like. Eventually it will get to something you care about. Yeah, and that something is social security. There's no way to do make those cuts without without cutting social security and and Musk made a bunch of comments, again, super politically unhelpful where he called social security like the greatest Ponzi scheme.

Anyway, uh Musk also got involved in this Wisconsin uh special election where it sort of became clear that his involvement might have been one of the factors that cost the Trump aligned candidate to lose. So he was a the idea of of Elon Musk going to Wisconsin and holding these rallies, which were well attended, Uh was actually a a net negative.

The story that the Democrats have been telling since Donald Trump's election is about whether you use the word or not, is about oligarchy. It's about this kind of like, as they see it, unholy alliance between the corporate class. and Donald Trump where the corporate class is is bringing down workers and and like going to Epstein's Island and and you know doing all this bad stuff and Donald Trump is getting rich off of it.

And Elon Musk among the opposition became the avatar for that. The most visible because he spent the most money, because he was literally having a sales pitch on the South Lawn of the White House. And so it just became this incredibly toxic thing, not just for Elon Musk, but also for Donald Trump. So this alliance backfires sort of for both of them. And again, not surprising that Trump would move on at some point.

What surprised me is and I follow it closely, but not as closely as you do, is it sorta seemed like Elon Musk seemed to take the advice that everyone was giving him and saying, you should just Shut up a bit. Or it's impossible for you to shut up, but you should be less loud. And initially when he left Doge, he held a series of interviews and told everyone, I'm gonna be less involved in politics now. I'm gonna go back to focusing on cars or whatever it is.

Um and I don't think that's true, but on the other hand He does seem to have, I don't know if it's intentional or not, and you tell me, reduced his public profile in the last year. I think his public profile has been reduced. I I don't know how much of the like, you're right that he said he signaled less involvement in politics, but if you look at his ex

feed, it's still full of the you know, same racially provocative, politically provocative, troll sexually provocative. Remember there was this whole thing where Grok introduced a bot that would you know, non conceptually take people's clothes off and and Elon Musk was kinda on X laughing about that. I think the main thing is that the the sort of center of the media universe

over the last year has been Donald Trump and there was a time when that included Elon Musk and and now it doesn't. So you think that's you and me in the media and then just regular people said we've we are just done paying as much attention to Elon Musk.

Or we're no longer as I mean, you can only sustain interest in anything for so long and we've sort of had our run with them. I don't think it's the media driving, I think it's it's a it's people being more interested in the reality show that is the White House than the reality show that that is Elon Musk's X feed. And as long as Elon Musk is not getting into a big fight with Trump or or in involved in the Trump show in some way.

then he's able to be somewhat under the radar. I also think maybe there's a bit of fatigue. Like, how many times can you be outraged over a a kind of like a white nationalist tweet? I I don't know. At a certain point you're just like, yep, that's

That's what he does. Yeah, there's a a great Guardian piece that came out in February and just said we just looked at everything he tweeted for a month in January when he was supposedly low profile and supposedly had maybe learned his lesson about angering politicians and customers. And it's just straight up race war stuff that he's basically publishing every day. And he would argue that it's not that.

most normal people would look at that and go, This is kind of revolting. I don't know anybody who would want to do this, let alone someone who has real power and real consequences for for putting this stuff out. But he has gone ahead and done it. Yeah, I mean I think he has Much like Trump, honestly, where he's achieved kind of a place uh he has a fan base. That Essentially looks past the stuff that is norm-breaking or weird or troubling or all those things all at once.

And they've just decided, yep, that's who he is. And I I honestly think for a lot of them, you know, it's part of the appeal. Part of the reason he has this huge base of of fans, admirers, investors isn't just that he's, you know, the one tech guy who's doing ambitious stuff.

It's that he talks like a normal person. It's like Donald Trump. It's the he doesn't really talk like a normal person if you're here. But he he tells people like you and me, fuck off. Yeah. I don't care about what you have to say. I I think, yeah. I mean, first of all, if you've met Elon Musk or or seen him on TV, he is not a normal person. He he is profoundly awkward, you know, he's unique. I'm just saying

He is perceived to be unfiltered. Right, in that same Trumpian way, right? Like I'm gonna say what I believe, even if maybe it's not what I believe and maybe if it's something I'm gonna say, I'm gonna say a different thing tomorrow, but this is coming from my head. out of my mouth to you, you this is what I am. There's incredible power in that. And I also think

This skill is arguably less important than it used to be, is like Trump, he's really good at at Twitter. He's really good at the short form tech. social network thing and and you know that's I think that's part of what led him to to buying the platform in the first place.

Uh, but you know, he's good he's good at being a celebrity in twenty twenty six, and he's good at leveraging that celebrity to make money and do the things that he wants and attack his enemies and so on. We'll be right back, but first a word from a sponsor.

I spent a ton of time using Twitter, thinking about Twitter, writing about Twitter, made a podcast about Twitter. Um I still use it. It seems to me to be less central to discourse than it used to be, still important. Um Is it important to him to own Twitter? Uh you know, he you explained how he sort of used that to lever himself into an AI company. But beyond that, is there is it meaningful to him as a business?

Jur uh like people who were paying attention to this, especially paying attention to his destruction of Twitter, or what felt like his destruction of Twitter. for like uh what was it, a couple of years, thinking like this is the wor this is an incredible destruction of value. He's just lighting money on fire, just kind of for the fun of it or something. And

I think you have to look at it as an incredibly successful acquisition, an incredibly successful business maneuver. Not only because he realized, and this was pretty smart that Twitter's sort of real time feed would be a good way to build a large language model off of and that if you controlled that you would have an important set.

you know, scraping Google or scraping, you know, any other site is the open AIs of the world all need to some degree some new information and in some cases they have to pay for it, in some cases they're not able to get it because they're blocked from it. And I don't know, you know, X is way behind open AI and Anthropic, but it it still is an important asset and it's allowed him to get a a very high valuation and to pay back

the investors who lent him money to buy Twitter. The other thing it did is by transforming Twitter from being kind of this media centric Where celebrities And it was a blue state operation. That's how it's because it was subscale, the people who sold ads for it couldn't say you're gonna reach everyone in the world. They said you're gonna reach a certain kind of person. Probably the kind of person who buys a Tesla. Or or the kind of person who

is influential in policy circles or whatever. It was a way to to to reach elites as an advertiser. And he's transformed it into being this right-wing social network. And I I agree that when you say, Well, how influential is Twitter today on the culture? it's it's not very influential at all at all. Like, you know, the TikTok of course is like where it's at or even reels.

But within conservative politics, it is the dead center of the world still. It is like if you are paying attention to conservative media. Twitter feels exactly like it did w like in twenty eleven. And there are other parts of that'cause Twitter is lots of different things, so lots of different people. It is where all of the AI discussion happens, like all the people who are building, investing in AI, that is where they are hanging out.

Yeah. And so so it's true that it's become less influential, you know, maybe broadly, but its influence in certain elite areas, including conservative politics. Elon Musk cares about It is arguably more influential and he is, you know, it's it's elevated him in a way that I think is difficult to imagine. So so even today, if you are running for like in a house race or something, you want to raise some money, you want to get on the radar of of you know big donors.

the best thing you could possibly do is get Elon Musk to reply to one of your tweets. I mean, there are probably other things, but that is that's gonna be high up there. You look at all these kind of like up and coming uh right wing politicians, they are they are so online. They are on X, you know, all the time. And and you think about like Tucker Carlson. Tucker Carlson essentially got thrown off of Fox News.

And his show and and went X. It looked it looked like okay, this that's the end of Tucker Carlson exactly. YouTube or TikTok. Now he doesn't I mean he doesn't have the broad cultural reach that he once did, but he has a huge audience. And that and and so and he is all over X too, you know, and and of course now he's mainly on YouTube and'cause X as you say is is subscale but

But he really used that and and and sort of used that ecosystem and is central to that ecosystem. Like I don't think Nick Fuentes. is a major force in, you know, sort of political culture in this country without Twitter. No, and there's uh Nick Shirley, the I'm not even gonna put air quotes around investigative journalists. the troll who created the what's going on with the Somalis in Minnesota story last year which

got to I mean that became a huge story on Twitter slash X, which led directly to invading Minneapolis, et cetera. Um so these things have real consequences. Um

We started off by talking about the IPO. We've explained why Musk is so good at financial engineering and also engineering engineering. and why this looks to be a a an enormously successful IPO. What what are what is the downside risk for him if something goes wrong?

in the next few months and the IPO can't happen or is less successful than he thought. Is is this existential for him or is it a road bump? Okay. So one thing one part of this answer has is gonna be true about Elon Musk. It has been true before, it will continue to be true. And then uh another part is specific to this moment.

His empire, as big as it is, as valuable as it is, it is more fragile than I think anyone realizes. It is interlocked, it and it's dependent on this celebrity that and this this continued belief that people have That there are no there's no guarantee that that lasts forever. And and I think, you know, the nature of celebrity is that it doesn't last forever. And so at some point.

that will be threatened. And I think we saw a little bit of that with Elon Musk feud with Trump where where I think as much as it would have been bad for the United States of America if, you know, if if he had stopped supporting the International Space Station, bad for the world too, um

It would have also been disastrous for his companies because because getting crosswise with Donald Trump, part of why he's so erratic and why he's always doing these bold things, because he is he is just he's being chased by reality always. and has been for his entire career. And he's been able to do enough things and and build his company and it's and that's part of what's made it an amazing story. The second thing is, you know, the market

does not feel particularly stable right now. And the the the way that com the way that we're valuing AI companies, I don't think there's any guarantee that that stays stable. And so I think to get this thing public and to and to be able to do this before either there's an AI bust or an AI correction or whatever, or before there's a political shift. Because a political shift could really hurt him. If you look at the prediction markets,

People think that Democrats are likely to retake the House in November. Uh about a fifty-fifty chance on the prediction markets of Democrats retaking the Senate. If that happens, we're gonna have two years. of essentially hearings. Democrats won't be able to do that much.

in Congress. But what they will be able to do is hold hearings about Donald Trump and all uh and his cabinet members and possibly Elon Musk. And there is gonna be a level of scrutiny on the parts of his empire that are connected to the government. That I'm not sure he has had to contend with yet. And that's gonna be a challenge. And and and that's one of the reasons why getting

to the public markets, being able to have a bunch of cash, being less dependent on federal contracts would be very good for him. This is a consequential window and we got the right person to explain why that was the case. Matt Shafkin is awesome. You can read his stuff at Bloomberg. You can listen to him on everybody's business. Excellent podcast. Um, and we'll have him back on the show. Thanks, Peter.

Thanks again to Max. Great to see him again. Thanks to my producer Charlotte Silver. Thanks to our advertisers. Thanks to you guys for listening. See you next week.