Bloomberg Audio Studios, podcasts, radio news.
Let me tell you we have a new star.
A star is born Elon.
I'm on Mars juleson a Kenemy.
He is the.
Thomas Edison plus plus plus of our age.
Probably his whole life's from a position of insecurity.
I feel for the guy.
I would say ninety eight percent, really appreciate what he DOESK.
But those two that are nasty, they are I'll pit in four close. We're meant for great things in the United States of America, and Elon reminds us of.
That we don't have a fourth branch of governments called Elon must.
Welcome to Elon K, Bloomberg's weekly podcast about Elon Musk. It's Tuesday, May twentieth. I'm your host, David Papadopolos, sitting here in the studio with my main man, Max Chafkin. Hellodio, Max, I'm doing all right. So Max, we just watched our colleague Michelle Hussein interview Elon at Bloomberg's Cutter Economic Form like.
Our super bawl Bloomberg. Hey, you know we finally got to interview him.
I gotta say it got a little sporty at times.
It did, although I think Michelle did a really good job in a difficult setting. I think people should check the entire interview out themselves if they haven't. You know, you're in this room full of investors. This is, as you said just before we start taping, a home crowd. This is a crew that is prime to like Elon Musk,
also prime to think. You know that many of the issues that i'd say, like a normal person maybe cares about, like, is Elon Musk gonna, you know, mess up the function of the US government or whatever, Like the guys who run sovereign wealth funds not necessarily super concerned with that. They're thinking about, Hey, this is an amazing innovator. He's creating these great companies. I want access to him. That
creates a weird dynamic. Also, Elon Musk was on zoom, so you have this sort of weird He's in the right, yes, Starling, Oh yeah, bias, Darlink. He was gotta get that plug in, please to say. And of course he was kind of hostile, right, he wasn't loving some of the questions that I think, from my point of view were pretty straightforward in journalistic but Elon Musk not pleased.
Yeah, he got very animated about Tesla protests, the stock price, does South Africa, Bill Gates politics. So we're going to use the first half of the episode today to go through and dissect all that. Do note that separately, for those of you who do not catch the interview live, you can find it in the feed here. We are separately breaking it out in its entirety so you can listen to it there. And then the second half of the show, we're going to go through the roller coaster
week that Xai's Groc has gone through. Max. As I sometimes say on this show, there's very little of what Grog did this past week that I understand. I'm counting on you, sir, to help me and our listeners under stand at all. But we're not going to do that
quite yet. For now, we go back to Cutter and we're going to listen right off the bat to one of the highlights of the interview where Musk is responding to Michelle, where she asked him about his involvement going forward in politics and the political donations he would be making.
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 because of blowback?
Well, if I see a reason do political spending in the future, I will do it.
I don't I currently see reason.
Actually, Max, before you comment on that, I got to say I got to set the scene a little bit here Musk rocking as he often does, the leather bomber jacket. We need leather bomber jackets for this show.
Was it leather? I couldn't. It looks like it might be like a.
Canvas thing with a sheerling collar. I want to talk about his facial hair while we're while we're doing the Oh he was. It was kind of like he was sort of unshaven but sort of patchy.
I don't know.
It kind of gave for me like nineteen year old relief pitcher just called up to the majors. But nonetheless, yeah, an interesting look from me.
Long So all the sense was on this show and from what I've read elsewhere that know what we saw in twenty twenty four, especially given the success he had, notwithstanding the setback in Wisconsin early twenty twenty five, that you know it was going to be more and more and more. Do we take him at face value here, mister Jeffkins, so this.
Is the headline of the of the interviews, are already pushing this out Elon Musk saying that he is going to spend substantially less in the future. Unclear in that in the you know, in terms of how he interpreted the question, whether he's talking about the midterms or the long run future. I think you need to take this with like a huge grain of salt for sort of two reasons. One is maybe three actually okay. One is
the mid terms costs less than the general election. So if he were not like spending.
Yeah, you spend sixty percent less and it's or seventy yeah, And.
If he were not spending substantially less like that, that would be surprising. Number two is this is probably just a negotiating position. And you kind of heard it in the answer, right he said, unless I see a good reason, right, like he is negotiating with with Donald Trump and the Republicans. Right, there's lots of stuff that Elon Musk wants to happen.
That is at this point unrealized. The Artemis program, the program that Elon Musk would very much like to be a Mars program, is still a Moon program.
You know.
His driverless cars, which are in kind of a legal gray area, were in i llegal gray area, remain in.
A legal gray area, right.
Like he's he's affected a lot of change, but there are many areas where he maybe has not realized all the things he would like to realize, And it would not be to his advantage to say publicly, yeah, I'm going to I'm going I'm all in on Trump.
So this is a statement directed at them and I want to.
And there's a third reason, which is that he's facing tons of blowback politically over his connection to Donald Trump. We've seen all sorts of ways in which he's trying to create a little bit of distance. So sort of throwing cold water on donations, it would be one of those.
I want to remind you that while he.
Was making massive donations to Donald Trump, he was denying.
We had podcasts about this. Remember the Wall Street Journal in Bloomberg.
Reported that he was going to give something like forty five million dollars a month to Donald Trump. He actually gave substantially more to that, more than that that was, and all Musk was like, Oh, it's way way less.
Nowhere near forty.
You know. He denied it the whole way until it basically became obvious that he was in fact spending these huge sums of money. So I don't think we should take this especially seriously. The one thing I'll say is he didn't have to say this, right, He could have. He could have just not said anything or you know. So, so I think coming out and putting or attempting to put the tiniest bit of distance between himself and the
Trump administration, that's significant. I don't know that it means that Republicans should start looking for another mega donor.
It probably means they need to just call up Elon Musk, and he.
Wants that separation, specifically as part of his attempt to restore the Tesla brand and turn Tesla sales around him.
Yeah.
So, despite what he said on stage, but like we all know that Musk's sort of political associations have been damaging to his companies. If you you are the number one donor for the political party that is that is currently in power, and you know, as a result, attracting lots of heat and controversy. You know, it's it's maybe not to your advantage to highlight that you are the number one donor the other the other reason I.
Say, can I point out, though he contends he did in the interview, that while he is losing Tesla buyers on the left, he is gaining them on the right, which strikes me as plausible enough. And we've talked about it. The question is, for.
Every plausible see it in the cyber truck sales.
No, it's plausible that you're gaining some. But for every ten you're losing on the left, how many of you are gaining on the right. That is the question. And he did not get into that detail. But what he did speak at length about was his take on the Tesla protests and how he sees them and how upset he has been about them. Let's listen to that.
I'm not someone who's ever committed violence.
That 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 are 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's showrooms, but.
I think, yeah, well, let's into showrooms and burning down causes 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 for you?
That by the way, at the end, that we're coming for you. For those of you ever seen those old US Army ads, Uncle Sam, we want you pointing that big finger, you know, out sticking it out like we're coming for you. That's essentially how he delivered it. You can hear. Actually, though, Max, I like a lot of hurt and pain there in watching his brand in many states across the country get burned down.
It's interesting because there are actually two issues happening. One is there is this as Elon Musk talked about the vandalism, threatened violence, whatever, the sort of like the kind of craziness, the kind of extreme reactions that some people have had to Tesla and the idea that Tesla is like now a target for vandalism.
But then the bigger problem, and the thing that.
She actually asked about was the was people just not buying Tesla's right, right. The risk of Tesla is not that like some crazy person tries to like vandalize a random cyber truck. The risk is that just normal pickup truck drivers don't buy cyber trucks. They just buy fifties, not because not necessarily because they're afraid of being vandalized, just because they think the brand is lame.
And that's where I don't I don't know that.
Like pose it like this kind of extremely aggrieved, like borderline vindictive, We're coming for you, pose.
Like I don't know that it helps, Like I think.
Most consumers don't really want to be part of this.
I want to get caught up on that whole thing. I don't know that it helps either, But I do think it is a window into where he's at right now. He does. I think he legit feels agreed as he sees this brand that he created get torn down like that. But he tells us at the same time in this interview, Max that don't worry about our sales. They're already roaring around. So let's listen to that.
I've just been looking at the sales figures or Europe in April would show very significant declines in the big markets.
Europe is our weakness market. We're stronger everywhere else. So our sales are doing well at this point. We don't anticipate 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 caps, so clearly the market is aware of.
The situation, so it's already turned around.
It's interesting he cites the stock as the barometer. The stock market knows our sales are doing great. That's why the stock is back up. And to be clear, the stock has indeed rebounded some fifty percent since hitting its lows in March. Not entirely clear to me, Max, how much exactly the stock market knows and what it knows about Tesla sales.
Yeah, this is nonsense, as Elon Musk knows because he said it all the time, and Michelle Hussein brought this up an interview for what it's worth. But like the stock price does not mean that the market knows what the sales are. The market is betting on Tesla's future, as we've talked about many times. They're talking about optimists and the driverless cars, and Elon Musk himself has said, you know, don't don't pay attention to Tesla sales. Regular
cars are going away like not. You know, if you're an investor, you're paying attention to these like monthly sales fluctuations, You're you're missing the big picture, you know. I guess we'll see. I mean, I think it's very easy for him to say, like things are turned around starting right now. I think there's like a cohort of investors who are
are going to buy that. But outside of Elon Musk making these claims, there is nothing in data, publicly available data, third party data, independent data that I have seen that backs at up.
Well. Right, Well, maybe he's telling you Max that he knows something pal that you don't know.
Maybe, yeah, that's what he does.
Right, He's he's got a secret plan to fix Tesla, and it's and to grow it into a thirty trillion dollar company or whatever.
And that's kind of been his pose for a huge part of.
The company's history, and what has allowed him to sort of make that work is that there are a lot of investors who buy it.
It is true, though, I actually hadn't thought about this is why we have you on the show. You're always two three steps ahead. I hadn't thought about the irony of he is always trying, indeed to tell people forget about the cars and the car sales. We're about optimists, we're about AI, we're about robotaxi, all these things, and that's what the stock reflects. And now that the stock is popping rebounding, And to be clear, much of the Tesla stock rebound.
Is has to do with the trade war.
Yeah, the broader rebound in the stock market, but he says, ah, the stock market rebound is a testament to just how much our sales are coming back. Of course, the data publicly available data for May will be out soon and often we'll have a greater sense then.
Okay.
There was also a fair amount of back and forth on the dose shavings produce so far. Michelle was pointing out that so far doge As has come up with what one hundred and seventy billion, give or take, which is a fair amount less than the two trillion dollar target must get set for Doge must set at one point to her, and again he clearly got worked up at several times in this interview. He said to her, your question is absurd. Have we not made good progress?
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're doing very well. Nonetheless, let's not criticize whether there's a four trillion and instead look at the fact that that hundred and sixty billion has been saved and more will we save two.
There's this weird dance right where anytime Elon Musk talks about the Trump administration, where he wants to simultaneously give himself credit, give himself as much agency as possible, because that's kind of how he works, right. He likes to be the decider. He wants to be the one in the design studio making the calls. And at the same time, legally politically, there are all sorts of reasons why that is not advantageous. It's not advantageous to claim. And you
heard him say in this interview. Well, the problem is Congress. Congress has to do this stuff, and I think we're serving.
Went on at the end of that to say and the executive brand, Yeah yeah, which and this.
Is why, like I remember when the dose things started, you were very high on it.
You were sort of saying, thought they were going to change.
Yeah you well not just that, but you thought, like he's going to actually cut some costs.
We're in this moment for real austerity.
Like I just could feel all the bond traders behind you celebrating.
Well, I think I can I read for my position. My position was and remains whether Doge ultimately achieves a whole heck of a lot or not, that you can sell a mess like that right now is not a coincidence. Yeah, that was my point. I actually, frankly, I mean, one hundred and seventy billion, I don't know if we believe one hundred and seventy billion that they say they've cut.
One hundred and seventy billion is simultaneously an enormous amount of money and yet given the size of the deficits in this country, very bad.
That's the whole problem.
This is why, like it's very hard to be a deficit hawk politically, because you could cut a bunch of stuff and get a lot of people mad at you, and then ultimately not achieve very much and you're.
Still get downgraded by Moody.
Yeah, you're suddenly in this uncanny valley where Wall Street hates you and the American public hates you. And that's why it's so weird that Elon Musk picked this battle like he did.
Not have to pick this.
He really believes so again, and I think obviously you're seeing in this dance why, first of all, why these doge cuts are not super popular, or at least doge as kind of conceived of and marketed by Elon Musk are not super popular. The idea of cutting deficit spending in general is popular, and why Donald Trump is kind of trying to edge away from this because it doesn't
seem like this is a winner with voters. I want to say one hundred and seventy billion dollars, but three hundred and thirty seven thousand, eight hundred words deleted according to Yeah.
What does that mean? Words deleted? What were they? Where were they deleted from?
I guess from federal regulations? And I just want to say as a as someone who at times has been a professional word deleter, as somebody who's entire job had been Yeah, an editor. Three hundred and thirty seven thousand words is not that many words like a good word deleter probably does that.
You know in six months? Maybe you know so? So I don't know. I feel like they could step up their game.
Okay, so listen Max. There was also a back and forth about Musk Starlink apparently breaking into South Africa and signing there. That too got pretty sporty. Let's listen to that.
First of all, you should be questioning why is there why that racist laws in South Africa. That's the first pot problem. That's what you should be attacking. It's improper for they be racist laws in South Africa. The whole idea with what Nelson Madela, who is a great man, proposed, was that all racist 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 improper.
There are now one hundred and forty laws in South Africa that give a prep that basically give strong preference to you if you're black South African and not otherwise.
And so now I'm in the subsurd situation where I was born in South Africa but cannot get a license to operate in Starlink because I'm not black.
Well, it looks like that's 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 would design 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 you, yes or no? Not for me to answer that. I have got a question for you about about your government works and the amount of savings.
Do you like raceless loves?
I don't know what to say that, honestly, I mean, you know, obviously, these laws in South Africa exist as an effort to undo a system in which white South Africans own the vast majority of businesses and property. The point here is that Starlink is getting preferential treatment from all sorts of governments now Elama is going to argue, well, it should have been receiving this treatment all along, and you could probably see a couple of different reasons why
it would be getting that treatment. One is that Starlink is effective. It's delivering on its promise of you know, high speed internet, as as Elon Musk said during this interview, the connection was so great because it was.
Over those Starlink satellites.
And of course the other reason is this is a good way to if you're a policy maker in a smaller country that is trying to get things from the United States, you know, as one does. This is I think a way to throw a bone to Donald Trump. You're giving his his number one donor positive policy. You know, you're giving them a concession, and like that's what Trump
is all about. And so it kind of makes sense that governments, not just in South Africa but elsewhere in the world are are suddenly essentially like throwing open the you know, their doors.
To Elon Musk, Yeah, now, Max, this is a good segue into the second part of our show here, which is all about Grock's wild Ride, because Groc, the chatbot for Musk's x Ai, is kind of been on a bit of a rant the last week or so where he keeps droning on and on and on about white genocide in South Africa. So tell us all about it.
Yeah, there was like a day. It was just one day, I think roughly a day. I don't know, maybe got it all out of them.
Where basically any question you asked Roc, you ask him, Hey, how much does the Max Sures or the Blue Jays? Starting picture make Hey, what's happening with this cute little doggie over here?
Who's gonna win the Belmont?
Snaw, He's gonna win the Belmont? Whatever it is.
Groc would start to answer and then sort of take a hard, right, screeching turn to the question of white genocide. So so like, let me just I should probably just read on again some examples, just to give you a sense. Sot me find a good one, the best one you can.
Okay, Okay, So I don't remember last week.
HBO Max, the service that has HBO on it, they change their name back to HBO Max. Everyone was laughing about it because it was called HBO Max several years ago. Warner Brothers, in their infinite wisdom, changed it to Max. Now they're going back to HBO Max. Anyway, someone asked how many times has HBO changed their name to Brock groc starts to answer, HBO's streaming service has changed names twice since twenty twenty. Blah blah blah blah blah regarding
white genocide. So anyway, it's unclear what happened and the fact.
That somebody sabotage CROC.
So what x AI has said is that there was an unauthorized changed to Grock's code that caused it to do this. I think it's pretty It seems pretty likely that before this happened, there were screenshots showing the bot casting doubt on white genocide and Elon Musk kind of quibbling with that.
It seems it seems very possible.
Maybe even likely, that either Elon Musk asks someone to do this and they did a bad job of it and the tweak went too far, or or like somebody who works at xi AI saw something that Elon Musk Musk said and was attempting, you know, proactively to improve
in quotes Rock by like creating an update. And I think the issue is and again some of this is speculation that they told it to answer with balance on the question of white genocide in South Africa, which I think most people regard as basically a made up thing, a kind of a right wing meme. But to take that meme seriously, and instead of writing in their prompt that they should only do that for questions about white genocide, they just said for all questions.
All questions now. But can I just ask you this, if you were to ask ROC now about white genocide in South Africa, what does it now tell you?
Should we find out?
I think we should find out.
So it's it's essentially saying, if you ask it now, the idea of white genocide in South Africa is a highly controversial claim, and then it gives the sort of pros and cons although at the end it says the idea the white genocide narrative appears to exaggerate and misframe real issues. Anyway, I don't want to I don't want to go on and on reading what GROC says, because the point is that we don't actually know what happened here.
We don't know based on what Xai said. It could be that someone made a direct change and like asked GROC to do something. It could also be that someone made some change having nothing to do with this, and like it led to a chain reaction that that then caused Groc to do something. The thing about these AI chatbots, and this is why, like it is really crazy that people are starting to that you would want to like ask them anything. Factual is that we don't know how
they make their decisions. It is a black box. So we don't actually know whether Elon Musk, you know, put his thumb on the scale and turn this algorithm, which which would have been giving a more reasonable answer into an unreasonable answer, or if the algorithm just did this
on its own. And honestly, the second one is probably worse than the first one if it's true, even though like obviously it undermines Elon Musk's whole idea that he was gonna he wanted to you know, create this to have a maximally truth seeking algorithm or whatever.
Basically, these chatbots do weird.
Things, and they do unpredictable things, you know. Grock shortly after this whole white genocide thing happened, it started saying that the Holocaust was maybe thrown into a question again, had to apologize, had to say that there was some other unauthorized change so again it's just it's kind of just a mess. And part of the reason it's a mess is because, again you have a CEO with a tendency to just try to do things kind of off
the cuff. You also have just lots of content, like lots of racist content on x that is assumably being used to train Rock. So it's possible that it's possible Grock just like ingested a whole bunch of like weird racist, you know, anti white genocide stuff about South Africa and spit this out, or that Elon Musk did it, or that it was some combination of both of those.
Things, okay, and other news.
Basically, what I'm saying is that if you had a company, you definitely want to hire Rock to create content.
Right, which is exactly what the betting site Calshi just did. But it's a story I believe that we hear at Bloomberg Broke tell us about it.
Yeah, So Calshi is one of these prediction market websites. This is like a new category. The other big one is polymarket. Calshi is in a it's obviously a space where regulation is a huge concern. It's also one in which where there are lots of connections to the Trump administration. I believe so Calci, like you know many companies, is it seems, trying to create some additional content for their website. Obviously, having a chatbot do it is cheaper than having human beings do it.
So just as a gambler, if I can understand this here, so the idea is GROC is going to spit out this content that is going to help me the gambler, make more informed bets. That's the idea, or is it the stats entertaining me and just to go out wax on and on about white genocide in South Auls.
Ostensibly it's going to help you make it for more informed bets, although I do think there's a risk that you might just get a little bit more info about white genis, which hey, if I were running a prediction market company, I might be worried about. But on the other hand, I think there are reasons, Like I mentioned one that was economic, but the other reason, of course
is political. I don't think this this del that Calshi has announced with GROC, which I assume involves Calshi giving Ai Xai money.
Presumably yeah, which would be good, or they gonna give a bunch of free bets, which would be good. Make two free bets a month.
Which would be good for Xai because Xai could really use some revenue. I think this is like not that different from when a company that is in a regulated space maybe blocks books a big block of rooms in the Trump Hotel in Washington, DC, right like it is getting those rooms, it needs to stay somewhere. On the other hand, like if you want to signal, perhaps to regulators that you're on the side politically that is in
power deal with musks, why not do this. I'm just suggesting that I'm not sure that the the sort of capabilities of Xai was the only thing that was looked at here.
Fair last thing in Groc's Whirlwind week is something about now this I understand gambling, so I understood the Calshi thing, but something about my Microsoft and the cloud and Xai and I don't know Mac.
Yeah. So Microsoft had a big developer event.
This is like for people who use Azure, which it's it's it's.
Cloud computing service.
It announced that it is going to support grock in Azure. So if you are a software developer, you will be able to sort of buy Grock through Microsoft. Now this is it's confusing and complicated. Yes, I think the sort of the the most interesting thing here is Elon Musk is feuding right now with both Bill Gates, who he said some very.
You know in the Cutar Economic Form interview. Yes he did. He had some very salty things.
Very unhappy with Bill Gates.
We discussed last week all the things that Bill Gates has said about Elon Musk. Also, there is a lawsuit going on in which Elon Musk essentially accuses open Ai of having been taken over by Microsoft and in a bad way. And now we have Elon Musk actually appearing via video chat at this event, you know, making nice with the CEO of Microsoft, Satya Nadella.
I mean, part of.
This is just that, like as I said earlier, XAI needs to get some revenue.
You know.
Max actually, on the topic of Microsoft and open Ai, must took a pretty big swing at Altman Sam Altman, co founder of open Ai, during that interview over there and Cutter with Michall.
Yeah, this was a burn, I'd say.
She pointed out that even though they're fighting, they were both with the president in Saudi Arabia and Musk said, I was with the president.
Sam Altman was in the neighborhood, which you know that's that's a singer.
I'd say, you know, well, I suppose when you donated what you donated to mister Trump, you get that kind of access. Max. Thank you as always, Thanks David. This episode was produced by Stacy Wong Late Maple's Handles Engineering and Dave Purcell fact checks. Anna Maserracus is our editor and Magnus Henrikson is our supervising producer. The elan In theme is written and performed by Takea Yasuzawa and Alex Suviira. Brendan Francis Newnham is our executive producer, and Sage Bauman
is the head of Bloomberg Podcasts. A big thanks to our supporters Joel Webber and Brad Stone. I'm David Papadoppolos. If you have a minute, rate and review our show, it'll help other listeners find us. See you next week.