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Well, Elon Musk is now the richest person on the planet.
More than half the satellites in space are owned and controlled by one man. Well, he's a legitimate, super genius, legitimate.
He says.
He's always voted for Democrats, but this year it will be different.
He'll vote Republican.
There is a reason the US government is so reliant on ed Elon.
Musk is a scam artist and he's done nothing.
Anything he does, he's fascinating people.
Welcome to Elanink, Bloomberg's weekly podcast about Elon Musk. It's March twenty six, twenty twenty four. I'm your host, David Papadopoulos. Our colleagues here at Bloomberg have a big investigation out this week into a black market problem that is vexing Starlink, the satellite operation of SpaceX. We have a special story from our sister show, The Big Take, that digs into that investigation and all the places starlink kits are being
used where they shouldn't be. But before that, there's been plenty of news in elon Land, and we're going to round it up for you all rapid fire. First, Tesla will now do full self driving mode demonstrations for every new car buyer. Second, a federal judge tossed out a lawsuit that Musk's X had filed against the Center for
Countering Digital Hate. Last will unpack an intercept investigation that found that X fought against the secrecy surrounding government surveillance of social media users while it was profiting from user data sales. To break all of this Elon News down, we have Danahull, who's our full time Elon Musk reporter. Hello Dana, Hello, And Max Schaffkin, senior reporter and editor at BusinessWeek.
Good day, David, Good to see you.
Max. Okay, so we're gonna start with these Tesla full self driving demos that are now, according to mister Musk Dani Hall, are now mandatory before anyone leaves a Tesla A lot explained.
Yeah, so full self driving is a feature that you have to pay for. It currently costs twelve thousand dollars. And this is all about margins. I mean, we are at the end of the quarter. Tesla has got to move cars. It is in their interest to move cars that are as fully tricked out with all the options as possible, and so Musk is now basically saying via this email that we confirm that, like you know, the salespeople have to give a demo because people don't realize just how awesome FST is.
Okay, sorry, so Danne to interrupt you. Sorry, So, I actually thought erroneously that this was some way, somehow about security and safety and making sure they're on the right side of the law with regulators. You're telling me it's actually them saying, hey, we really got to pedal this thing.
Yes, perhaps I am a cynic, but we have a week left in the quarter, and this is like a really important quarter in terms of moving vehicles and making that profit. I mean, both things could be happening simultaneously. They want to be a little bit more careful about how they explain full self driving beta or full self driving capability to prospective customers, given the regulatory environment, given the fact that we're on the eve of some of
these big autopilot lawsuits. But at the same time, twelve thousand dollars that's just all gravy. That is a big way for Tesla to make money. I mean, so I think both things are happening, and they're really kind of pushing this.
There's no nothing in this memo about being more cautious or emphasizing the limitations of the technology, which is what you'd expect if the goal were to like head off potential litigation or regulation. Instead, it says just the opposite. It says, people don't understand how great this thing is from the point of view the regulators. Right, that's the opposite message that that Tesla could potentially be conveying. So I totally agree with Dana. I think this is about
this is a sales thing. It's like you're in the car dealer and they want you to upgrade to the you know, LX package or you know over the GX and then whenever they're going to tell you how great the leather seats are in the clearcoat. This is Elon
Musk's version of that. Right, This is a pure margin product that if he is able to get more people to adopt, would be very valuable, and of course has additional value down the road because because at least by by Tesla's account, all this data that they're collecting makes the system better.
And I just like to point out, like if you go on the Tesla website today, and try to order a new model. Why it says you will receive one month trial a full self driving capability with a new vehicle purchase. So not only are they demoing it for you when you're there at the lot, but then if you buy the car, you get it for free. It's like a subscription, and then the idea is that you keep it.
Is this like an app TV thing where like you get the three months and they start billing you if you don't cancel, do they bill you the twelve grand or do you have to like, you know, wire additional funds to like maintain your subscription.
Well, yeah, you can do a subscription or you can just pay for it. I mean, I'd be very curious to see how the billing looks.
What I will say is this, and then we will move on to point number two here. But you know this must be important for Elon and trying to drive sales of this thing. The quote that we have from the memo he sent out to all staff was, I know this will slow down the delivery process, but it is nonetheless a hard requirement for Elon to do anything that slows anyone down. That is anathema to him. Is it not DNA. All.
Yeah, but this is a great way to like sandbag the quarter because if they have a lousy quarter, they can be like, oh, well, we rolled out this new thing where you've got where the sales process is longer, and this slowed down some things towards the end.
And it's not just about the quarter, because, as we've talked about on this podcast many times, the self driving story is crucial to Elon Musk's long term vision and maybe even more importantly, the extremely elevated value of Tesla's stock. Like this, if the story that Tesla cars drive themselves and they're that they're basically going to be robotaxis in twelve months, which Elon uns Musk has essentially been saying, you know for the last decade, almost if that were
to break down, the stock would fall apart. And so so by demonstrating the value to people, it allows this story to be maintained.
And the stock Tesla stock has gone up today as a result. It's like up what five six percent, I.
Stock that has mostly been going down of late having a bit of a rebound today. Okay, very good. Max's topic number two on our discussion list, A court tossed the lawsuit that X had brought against the Center for Countering Digital Hate, tell us what happened here?
Yeah, Center for Countering Digital Hate is an advocacy group that had published a series of reports that other news organizations, including Bloomberg, had written about and picked up on, essentially talking about white supremacy and racism on X. X sued the Center for Counting Digital Hate for, according to a lawsuit, like hacking the service. Basically, they were attempted. What it really felt like is they wanted to combat these reports,
essentially silence this nonprofit group. They came up with sort of a novel way of doing so, which the judge rejected. The judge in the ruling said, it's really transparent, what's happening. This is about trying to silence a critic, That this is essentially an attempt to do a defamation lawsuit without filing one, and he tossed out a case.
So then what's the takeaway here on all of this?
I mean, this lawsuit always seemed like spretty thin. Yeah, I don't like it.
Really.
It seemed, as the judge wrote in the ruling, essentially a way to threaten other critics. X has been trying very hard to rebut criticism from media outlets, from non profit groups, from anti hate groups that there's a lot of hate speech on the platform and the problem is the problem with this effort to shut down the criticism is that some of the calls coming from inside the house. Elon Musk himself has been essentially the vector for some
of this. And when you look at what is slowing advertising down, it's not, you know, the Center for Countering Digital Hate, all respect to their research, it's what the boss is doing.
Okay, Max. Topic number three and our rapid fire list a freedom and information request that was done by the intercept that led to a big piece on a very thorny topic explained for our listeners.
Yeah, so this is a story that is probably less about Elon Musk and more about Twitter. Of course, Elon Musk now owns the company that was formerly known as Twitter. But essentially what this is about is two things. One is a long standing effort by Twitter to essentially stop the US government from requesting information about users without disclosing those requests. And at the same time, Twitter's data is being sold to these data brokers that are then turning
around and selling them to governments. So there's kind of a whiff of hypocrisy here. I'll say this issue is not exclusive to Twitter, although it has been a big deal with Twitter for like a decade the company. When you think about what it does, it's this real time social network. You're seeing what's happening. That's valuable to advertisers.
That's valuable maybe to pollsters and to journalists. It's also of course valuable to police and to you know, in certain countries authoritarian governments who might want to monitor protests.
This data that.
Is being mined is essentially public data, but it's being aggregated through this through what is known as Twitter's fire hose, essentially the data feed of all the tweets, and that is sold.
To third parties.
And it can, as news outlets have pointed out, and as this intercept story is saying, can be misused or can be used in ways that are somewhat uncomfortable if you're a pro free speech maximalist, as Elon Musk says he is. So now we have two stories essentially in which you know that call in a question in some sense how serious Musk is about his commitment to free speech.
Right and so as you were saying, this case predates Musk and X. It began under the previous management when the company was Twitter. But Musk and his crew have continued to push it. Is that right?
Yeah, And it's understandable why they've done it because it's always been this somewhat uncomfortable situation where social media companies are asking users to trust them, but of course you're giving all this information to third party, and then that third party can be asked by the government.
To turn it over for the government. Right.
So, I don't think it's like hugely surprise causing that they continued the litigation. It does, I will say that to the point that the intercept makes, if you were really committed to free speech, and if you were a you know, somebody who's worth you know, pushing, you know, over one hundred and fifty billion dollars, you might question whether that data brokering business, the business of selling fire hose data to third parties, is worth pursuing.
I guess it's a it's a little reminder to everyone out there that anything you post publicly can and potentially will be used against you. That was great, Dana Max, Thank you very much for happing on.
Thanks for having us, always a pleasure.
Okay, So now, as promised, we're going to hand the microphone over to our colleagues and the Big Take podcast, who have a story about Starlink with huge geopolitical consequences.
Hovering hundreds of miles above Earth is the largest single constellation of satellites. It's called Starlink.
Falcon Starlink LDS go for launch, and.
There is that call out that we are go for launch. Watch as Falcon nine takes our stack of Starlink satellites into orbit.
Starlink is part of Elon Musk's company SpaceX. It's thousands of satellites provide Internet all over the world through portable kits about the size of a home computer monitor. The idea is to reach even the hardest to reach places, places where other providers can't operate or don't. On its website, Starlink proclaims that it's available almost everywhere on Earth, and that's a big selling point for the service. But there are some places starlink isn't supposed to be.
If you look at Starlink's website, they have a very good map of global coverage. They duet to fully have certain countries blacked out, or they'll have dates when starlink services will become available, and some of the countries where it's more controversial, they will have no data available.
That's Alan Crawford, a senior editor at Bloomberg. Some of those blacked out countries he's talking about represent places where Starlink's services don't have a licensing agreement, haven't been approved by their governments, or where the devices have been barred for sale because of US sanctions. But a Bloomberg investigation has found that those barriers haven't stopped Starling's kits from getting into the hands of folks on the ground through a burgeoning black market.
What really struck me was the extent of this issue, that it's not just an isolated case here and there, it's pretty much everywhere.
Today on the show, what starlink kits seeping into illegal markets could mean for the company and the geopolitical stakes of letting that market continue or trying to shut it down.
Three two one Sarah than.
I lived.
This is the big take from Bloomberg News. I'm Sarah Holder.
Alan.
Can you start by just telling us about starlink.
Well, Starlink is a system of high speed Internet. It's very dependable, and it's based on satellites. The company is launched over five thousand satellites and it's using these to provide high speed Internet in parts of the world where connectivity is not very good.
Essentially, SpaceX launched the first Starlink satellites in twenty nineteen. In just a few years, it's become the largest satellite network in orbital space. It's also become a major source of revenue for SpaceX, along with government contracts and contracts with other companies to launch their satellites.
The issue here for Starlink is that a lot of countries where they don't have good current are kind of keen to get access to this for obvious reasons, but at the same time, they're not willing to just freely give over control to the company, and this has led to an issue that it's come up in the reporting for the story that there are many countries around the world where there's no licensing agreement between the government and Starlink, and the trouble is that people are turning to the
black market to obtain Starlink devices.
Anyway, your reporting found that Starlink terminals have ended up in places that are under US sanctions, where starlink is barred from operating, or just where starlink does not have a licensing agreement. Can you give us a brief overview of what your team found is happening.
Yeah, I mean the starlink kits. These are the kind of dish and receiver. They're widely advertised over social media, usually like WhatsApp groups on Facebook groups. There's countries like Sudan in North Africa, which is subject to US sanctions. There's a brutal civil war underway there and there have
been allegations of genocide. Millions of people have been displaced, and our reporting shows that the rebel forces which have been accused of committing these human rights abuses are using starlink because again, this is like a vast country with poor internet systems in parts, but the internet's been brought down and the two sides are, you know, accusing each other of having done that, and in the meantime they're using starlink.
What can starlink itself do about these kits ending up in the wrong hands.
Well, that is really the numb of the matter. We put a set of quite extensive questions to starlink and they have yet to respond. Nevertheless, people we spoke two who are experts in the industry, who work in the industry, they said that it is feasible to geolocate these systems as soon as they're activated. You can see where they are in theory, you flick the switch and you turn it off.
Right, I mean, is that something they've done in the past. They have that capability, they have they used it.
What we were told was that they have moved against illegal use in South Africa, and so the technicalities of how they're doing that I'm not clear, but they have attempted to clamp down on the illegal use there. But equally we were told that it hadn't been very successful, that they had only managed to shut down some ten percent of the terminals that were in use.
So Dan is just one of the conflict torn countries where starlink terminals are being used and where they're banned. It's not just that militias want communications devices, it's also that ordinary people need access to the internet, and that dynamic is not so unique to Sudan. All over the world, in places under crisis where blackouts and connectivity issues are common, people are trying to get their hands on Starlink kits.
You mentioned Sudan, and you've got a lot of detail about how Starlink is getting into Sudan and then how it's being used there. Can you walk us through that trajectory.
In terms of Sudan, there are intermediaries who are obviously looking to make money and selling this in the black market, and they're bringing it in from Gulf countries that are apparently bringing it through Dubai and there are roots that they go through Darfur and South Sudan and bring them into the country that way. You know, when you buy a starlink system, you get the physical equipment and then like a mobile phone, you get a tariff a plan
and you can pay extra for roaming. And they're using it in these territories where there's no agreement to do so.
So they're buying a kit in a place where Starlink does have a licensing agreement, but they're buying this roaming plan so they can use it in places that are perhaps not under that agreement.
Exactly. The reporter Sam and Marxy actually caught up with traders and spoke to them in person, and so in terms of social media, These are essentially like small traders that are online that are taking advantage of a loophole or black market to import these devices and sell them at a markup. In some cases we found they were offering advice on how to shelter these devices so that they're not detected by the authorities, not digitally but physically.
You know, they were giving advicely, don't put it in an obvious part of your roof, you know, keep it to one side. And at certain times.
This raises questions about local regulators and their responsibility to catch that these kids have been smuggled in and are being used.
Governments and countries like South Africa where there is no licensing agreement with Starlink then they have issued the Telecoms Regulator has issued clear warnings against people using this because it's illegal.
Let's talk about the implications of this, Especially in a conflict like the Russia Ukraine War. Starlink can have a massive impact on battlefield communications. What role has starlink played already in the Ukraine Russia War.
At the onset of the war. Back in February twenty twenty two, Elon Musk offered the starlink system to the Ukrainian government military, which they were obviously more than happy to accept. There was subsequently a deal done between the Pentagon and the Ukrainians, and in terms of that were never made public. But nevertheless, we've seen plentiful evidence that
Starlink terminals are used in Ukraine. But what is new is that as of February this year, the Ukrainians said that Russia is now starting to use it as well, which would be very much against US sanctions. And Musk said on X his social media platform that they were not knowingly selling any terminals to Russia. But nevertheless, there are posts on Twitter or video of Russian soldiers opening Starlink kits. It's impossible to verify these, but the point is that it's a widespread phenomenon.
Finding the technology and shutting it down is one thing, but any attempt to systematically address the problem could mean dealing with the big man at the top. When we come back, how SpaceX's controversial CEO Elon Musk factors into any attempts to rein in Starlink's black market boom.
We're back.
Bloomberg Senior editor Alan Crawford has been telling me about how Starlink kits have been circulating in countries where the system doesn't have agreements in place, and efforts to rein that in haven't been wholly successful. But there's one person we haven't really talked about much yet who's a big factor, Elon Musk himself. He's the CEO and founder of SpaceX, the private company behind the Starlink satellite system. Here's what Alan had to say about Musk.
Musk is known to weigh in on not just the war in Ukraine caused by Russia's invasion, but on various different aspects of US foreign policy, and that's what gets
to some of the concerns that we heard voiced. There's the perception of a potential conflict of inter interest because Elon Musk is a private sector he is a supplier of services to the US government, not to play NASA, and he's taking these satellite payloads for the US government into space, and so there are obvious national security implications if a company like Starlink were to lose control of a satellite based system, or we're even just to exercise,
you know, limited patrolling of its own system.
To dig into these possible security risks and the broader question of Musk's role in all of this. I spoke with my colleague Dan Flatley, a national security reporter at Bloomberg who's covered the government contractor relationship between Musk and the US.
Musk has a ton of contracts. I mean, there's an argument that could be made that Elon Musk would not be Elon Musk without the US government. I mean he is, you know, starting in the early two thousands with SpaceX, done lots of contracts with NASA, with other parts of the US government in terms of launching satellites and other types of things into space. He does business with the military.
Starlink is being used in Ukraine, but he also has links to the Chinese government through Tesla, So he's sort of has his hands in a lot of different spaces.
How could starlink terminal's bypassing sanctions, for example, cause national security concerns for the US if they're so entangled with Elon Musk's companies.
So, you know, starlink is both a tool of communication and could be viewed as something that's an asset in terms of national security by the US, but it could also be a detriment to US national security depending on how it's used. And when you have someone who's as unpredictable and mercurial as Elon Musk is, but is also so technically proficient and offers a service that nobody else offers, you're sort of right on the bleeding edge of what could be used for good or what could be used
for ill. And I think that what US national security officials that we talked to in Washington, d C. Feel like is that they don't have enough of a sense of where Elon Musk is on any given day on a lot of these issues, that he is both a trusted partner in somebody that US national security officials are somewhat wary of at the same time, but there's no alternative really to him for a lot of things, especially
against SpaceX and stuff like starlink. You know, there's not a lot of other comparable sort of providers out there.
What could it mean for Musk and his companies if they aren't able to address this issue, if it does become more of a priority of the US government to stop this and Starlink is enable to stop it, that's a really good question.
I think you have to start with the question of does the US government want to stop this, and it's not totally clear whether they do, because there are some instances where the US government actually wants to encourage the use of starlink in some countries, whether it's Ukraine or Iran potentially, you know, there is a school of thought that more communication in some of these countries is better because it sort of opens it up to US markets and you know, sort of the US way of thinking
about certain things. I think the question is are these terminals being used for military operations, are they being used to coordinate attacks? Are they being used in some way that would represent a significant threat to national security? And at that point does the government have a vested interest in getting involved. You know, anytime you have a technology like starlink that is so far advanced compared to what else is available out there, you're going to have people
trying to get their hands on it. And that's one of the things that in some cases the US government wants to prevent and in other cases wants to encourage. Take Venezuela, for instance, where starlink terminals are showing up. Venezuela is under heavy US sanctions, but not every individual in Venezuela is sanctioned, so you know, if somebody is using a starlink terminal to access the Internet and they're not under sanctions and they're not under export control restrictions,
then that's really a question for that country's government. If they are under US export controls, then that is a question for the US government.
Yeah, it's a really complicated web of responsibility global interests, and ultimately it comes down to who has the control and who has the will to exert that control.
It seems like, yeah, absolutely, And again, this is not a traditional company. This is not a traditional individual that you're dealing with. I think, by any metric, Elon Musk is not your typical, you know, entrepreneur. He's very outspoken, he's very unpredictable, and at the end of the day, the government, the US government in this case, is relying on him for a lot of different things and is not able to exert as much control over his activities as it might in a more traditional relationship.
Huge thanks to the entire Big Take team who worked on that episode, especially Sarah Holder, Adriana Tapia, Aaron Edwards, Naomi Ing, Veronica Rodriguez, Beth Ponzo, Nicole Beemster Boor, and our very own Naomi Shaven, and thank you to the elon In Team. As always, this episode was produced by Magnus Hendrickson, who is also our supervising producer. Naomi Shaven and Rayhan Harmanci are our senior editors. The idea for this very show also came from Rayhon Blake Maples handles engineering,
and we get special editing assistants from Jeff Grocott. The Elon Inc. Theme is written and performed by Taka Yasuzawa and Alex Sugi Yurra. Brendan Francis Newnham is our executive producer, and Sage Bauman is the head of Bloomberg Podcasts. I'm David Papadopoulis. If you have a minute, rate and review our show, it'll help other listeners find us. See you next week.