Pivot - Are Elon’s Best Days Behind Him? | On With Kara Swisher

Episode Date: May 27, 2024

Pivot will be back on Friday! In the meantime, we're bringing you an episode of On With Kara Swisher, all about someone we just don't discuss enough – Elon Musk. Kara has assembled a panel of experts, to get their take on all things Elon: Kirsten Grind from the New York Times, Becky Peterson from The Information, and Tim Higgins, Wall Street Journal columnist, and author of "Power Play: Tesla, Elon Musk, and the Bet of the Century." The group talks Tesla, Twitter/X, SpaceX, and more. Follow and subscribe to On With Kara Swisher here! Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. One of the biggest complaints we get here on Pivot is we don't talk enough about Elon Musk. Just kidding. But with all of his recent big moves in AI, brain science, geopolitics, he's not going to stop making headlines anytime soon. And while Pivot is off for the Memorial Day holiday, Elon is still probably in some undisclosed

location plotting his next move. So I've assembled a panel of experts for this episode of On with Kara Swisher, where we discuss what's influencing Elon's state of mind these days. I hope you'll enjoy it, and Pivot is back on Friday. Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is On with Kara Swisher, and I'm Kara Swisher. Today, we're going to do a deep dive into Elon Musk. I know, I know. Not because Envios wants to spend more time thinking about Elon, but because, I'm sorry to tell you, he's very influential, and it's impossible to ignore him just for that. So I've rounded up three of the smartest reporters covering Elon for our conversation. I promise it will be substantive about his businesses and where they're going. Kirsten Grein is a tech investigations reporter for the New York Times. She was at the Wall Street Journal until recently, where she has done investigations into Elon's drug

use and how he parties with his company's board members who have benefited immensely for being so acquiescent. I would say lapdogs. Tim Higgins is the author of Power Play, Tesla, Elon Musk, and the Bet of the Century, and a columnist at the Wall Street Journal. And his weekly column is, quote, mostly but not entirely about Elon Musk, and it is very funny. And Becky Peterson covers Tesla, SpaceX, and all things Elon for the information. Our expert question comes from a billionaire who's been infected, apparently, with the woke mind virus. Elon Musk has called him a moron. And that would be Mark Cuban.

It is on. So I brought you all three together, not to talk about Scarlett Johansson, but to help us understand where we are in the Elon Musk story and what it all means for his companies. He's been up to a lot lately. It seems like even though he sucks all the oxygen out of the room, he seems to be particularly sucking these days. But let's start with Tesla, the most valuable of all the companies in Elon's orbit, and also, of course, the iconic company that sort of made him the personality he is today, I think. So I'd love to know how each of you all assess it overall. Tim, then Kirsten, then Becky. Yeah, I think Tesla has long been Elon Musk's spicy mistress, right?

SpaceX has been his first love, his wife, but Tesla's that drama that just keeps getting his attention. But you almost get the sense in recent years that maybe he's been a little bit bored with it, right? Model 3, once it was successful, was successful. And, you know, there are all these other things that were kind of getting his attention. Clearly, Tesla as an electric car maker has really been a game changer for the world, right? It has shown regulators and rivals that an electric car could be cool, could be profitable, could be, you know, desirable, and has helped move the world towards the EV. That said, they're a little bit of a precipice. Where are they going next is a little unclear. Is it an electric car company or is it a robot company, which is the way that Elon is now talking about it? All right, Kirsten, you don't have to stick with the mistress board, Ivanka. I'm feeling

very Melania here. But he seems bored, but go ahead. What are your thoughts on the company right now? I do like that analogy, though. I mean, it really kind of seems like it's some kind of crisis point at this stage, right? It's sort of in this transformation, as Tim said. Elon, I agree, does seem bored. But on the other hand, it would be super painful for both him and Tesla if he left. A lot of high-level senior executives, including those close to him, have left recently. They're obviously in this fight over his pay package. So I don't know. It's a really interesting juncture. Becky? Yeah, I think there's always this question of whether Tesla is a car company or a tech company. And Elon is once again jumping into the debate, arguing it's an AI company and we shouldn't be paying attention to the cars. And the slowing of car sales, though, are driving all of these dramatic cuts and a lot of the concern about the stock price. So I don't think that we can say definitively that it's either,

but he's definitely trying to convince people that the car part of the journey is over. Yeah, he's a big hand waver, obviously. But as Kirsten mentioned, last month, three top executives resigned during a two-week span. They were longtime executives. Drew Baglino is the senior vice president of Powertrain and Energy. He's been around a long time. I think it's Martin Vicha, the vice president of investor relations, and Rohan Patel, the vice president of policy and business development, are all gone. Kirsten, is this normal? I know I have covered tech companies for years, and you have covered many companies.

People change at these startups. People get rich, and they move on. Many companies, this has happened. But this is an unusual group of people to have left and important people at this moment. This seems unusual. Yes. I mean, even for Tesla, where executives are either being pushed out or fired or leaving because they can't handle the workload or Elon or whatever it is. This is, this seems like a moment in time where a lot of people are leaving at once and important people.

It reminds me of kind of other periods of dramatic kind of upheaval that we've seen over the course of Tesla's limited history, right? This is a company that's about 20 years old. And we seem to see these huge swings where in a lot of ways, Elon kind of reinvents the company. First, it was when he took over as CEO after the company had been around for a few years and kind of evolving it into the next realm,

going to the Model S. And then we saw it again, the painful birthing of the Model 3 in the 17, 2018 period. And now you kind of get the same impression that it's at the precipice of something. We're not quite sure, but it is a brutal place. It can be a brutal place to work. And we have seen a lot of key leaders over the time leave. And part of that is, in a lot of ways, Elon seems to act as if he doesn't have the luxury of keeping people around in some kind of emeritus role.

These are the tools that he has in his toolbox, and he's going to deploy them in the way he wants to do for the current crisis, right? Right. No rest in vest. Right. Exactly. The one big thing here, I think, is Drew's departure, I think, was very jarring to longtime observers.

Here was a guy who had really been around since the beginning, who in a lot of ways kind of was kind of the carryover from J.B. Straubel's departure. He'd been considered one of the founders and had been a close ally of J.B., and his departure really, I think, shocked a lot of people because he was kind of the, you know, one of the holdbacks to the original crew that was there. Becky? Yeah, Drew had a lot of support from employees. And I think him, along with Zach Kirkhorn, the CFO, leaving last year, there is a lot of pressure on Tesla to refill the executive bench again. There was a big effort to convince people that it wasn't just Elon at the top. There's all these lovable people who are running different products and who employees love and investors can look up to. And now a handful of

them are gone. And that affects both employees and investors. It also reminds me, he likes to be at the center of everything. Like it's all, even though many years ago, Steve Jobs said to me, I'm not Willy Wonka and they're not Oompa Loompas. There's lots of people here, you know. But he actually did think, he didn't, even though he called attention to himself because he knew he could sell phones, I don't think he relished it. I think Elon really truly relishes that idea of the savior complex. But in February, he did scrap plans for the Tesla Model 2, the $25,000 electric car he'd been promising for years, even though it was almost ready for production. He first had favored and focused a lot of attention on the glitch-prone Cybertruck, which has been a bust. And now he's focused on robo-taxis and its AI efforts, especially around

full self-driving. Tim, what's going on here with this? Because this was something that everybody thought he should do in order to really solidify its huge market share, which has been declining. He seems to be telling the world that robot cars are the future or that AI is the future. In a lot of ways, though, it seems as if he's acting as if the Chinese automakers have already won this great race to the bottom to take out costs to make EVs affordable or as affordable or even cheaper, if you will, than gas-powered cars. And, you know, this had been the goal for so long. And the way he's acting now, the idea that the cheaper battery-powered car is not the future, but it is just, you know, kind of a step towards robot taxis, you know, is sending a message to some on Wall Street that that's, you know, kind of where he's taken. That's where he sees the profitability, the high margins is in this kind of next leap

forward in technology. The challenge here is that Tesla doesn't have a robot vehicle on the roads that we know of at this point. They have not demonstrated the ability like Waymo has in the streets of San Francisco, where on a regular basis, I see cars go by without people in them at all. And Tesla hasn't shown that ability. And so that's one of the big challenges here is that he's painting a future of Tesla being a software company that generates money from these robot taxis and AI and humanoid robots and not so much caring about the metal-bashing business of making cars. And, you know, right now, though, most of the revenues come from selling those cars.

So, Becky, when you're doing this, you sort of put a lot of focus on the cyber, which I think is just a stunt. I honestly think it's a stunt. But one of the areas that he was doing very well in was the supercharger area. He fired the supercharger team, even though the charging network has been touted by him as a huge competitive advantage, and he had struck a deal with other automakers to share it. Now he's rehired some of them, though not Rebecca Tenucci, another well-regarded executive there who had resisted cuts. Becky, what is happening here with supercharger? Yeah, the Supercharger network

was considered one of the best things Tesla has done. It was a huge accomplishment for them. And it was a huge selling point to customers who were wondering if they could take their Teslas on long road trips, drive them across the country. The Biden administration has bet that Tesla's Supercharging network will convince non-Tesla drivers to drive EVs because they can charge them on the network. So firing the whole team is really confusing for people who are on the team, for people who are building the superchargers and have contracts, have land reserves that they were expecting to become a supercharger. I don't think we really know what is happening, but people are coming back. Maybe he's realized his mistake, but I think there's still a question about how small of a team

Tesla can have running this huge network. What guided the decision-making process, as far as you can tell? It seems like he might have gotten upset that Rebecca Tenucci had not laid off enough people on her team and tried to make an example of her. Really? Anyone else? Tim? Well, you know, we've seen kind of these dramatic decisions that he makes and announces to great fanfare and then pulls back or readjusts in the past. I think about 2019 when he announced that he was basically getting rid of all the stores, right? And that had been a longtime dream for Tesla to sell cars just directly on the past. I think about 2019, when he announced that he was basically getting rid of all the stores, right? And that had been a longtime dream for Tesla to sell cars just directly on the internet. And, you know, then lo and behold, there was all these contracts, these leases on these facilities around the world. And, you know, by the way, it also, stores are very important for selling cars, right? You know, people need to be convinced sometimes to get

over the line to buy those vehicles. And so, in a lot of ways, it feels like kind of classic Elon in that, you know, he likes to shoot and then think about it later once maybe the decision is maybe not as, didn't play out the way he wanted, right? But it kind of gets a little bit of the way he kind of operates as a manager, which is he kind of believes in this power of momentum and the idea that— But why would this be a momentum move? To save money? Right. The idea that people weren't moving fast enough.

Change wasn't occurring at the pace that he wanted. And so he's just going to start burning it all down, right? We saw this at Twitter turned X. He likes to—it's like chaos theory. One of the folks that I've talked to over the years talks about chaos, right? He thrives in this chaos and sees kind of what shakes out at the end, right? It doesn't always work out, but he does like the appearance of movement. Kirsten, but at the same time, there is reality.

Tesla's under multiple federal investigations, including a criminal probe by the DOJ, a civil probe by the SEC. Talk a little bit about them and how concerned should Tesla investors be or shouldn't about these probes? And what's the role of the board here in these probes? Ah, well, that's my favorite subject, the Tesla board. You know, one thing that is extremely surprising about Tesla to me, just to kind of get to your first point, is how little the investors seem to care, as well as the directors, about Elon's antics or really anything surrounding kind of like his personal life or these government probes or anything like this. I guess as a human citizen, I would say you should care. They never seem to really care.

You know, as you know, over the years, the government has tried various ways to look into Tesla and to go after them. And nothing really ever seems to kind of pan out or get traction. The latest we wrote about at the Wall Street Journal when I was there was about this glass house, right, he was building. Elon was allegedly using Tesla resources to build this glass house in Texas. It's kind of the point of contention, but there was like a secret team working on this house at Tesla. And so the whole issue was Tesla and its employees being used for something personal. And, you know, nothing's come of that yet. These things are slow moving. So it's hard to say whatever comes of any of this. Tim, talk about the board's role here, because they really don't have a role, it seems.

They've always, to me, been, I don't even count them. They're sort of lapdogs to Elon. Yeah, several of them over years. And let me say, for people who don't know, a Delaware judge voided Elon's $56 billion pay package. The board has currently campaigned to get it reinstated, especially the chairperson, Robin Denholm. Explain what's happening here and the role the board

plays. You know, there's a couple ways to look at the board, right? As an investor, you might be kind of happy with the board, given the results of the stock over the past 10 years, right? Another way of looking at it is, you know, are they really keeping him totally engaged as CEO of Tesla, right? The idea of that giant pay package in 2018 was concerned that he has all these other things to occupy his time, that he has a wandering eye for entrepreneurialism and activities and was supposed to really get him to kind of be nailed down there and be fully engaged. And in a lot of ways, it did help in the interim. He brought out the Model 3, shares went to the moon, became the world's most valuable automaker, and in turn made him among the world's richest men. But he also became kind of busy with Twitter and all these other things. And now the question, I think, in some investors' minds as they're being asked to reauthorize that pay package is,

is he really engaged? Are they really getting, you know, fully full-time Elon? And Elon's people would say, well, yes, he's very committed and he works very hard and whatnot. But it's obvious that undeniable that his calendar is just so much more busy than in 2018. He has X, he has his busy than in 2018. He has X, he has his startup for AI, a company called XAI. He has essentially threatened to take AI and robotics ideas that he has at Tesla elsewhere if he's not given a 25% control of the company, which raises the kind of question of, is he got one foot out the door or not, especially as he's trying to frame the company as an AI company. Kirsten, what is happening with this board then? So I have to say I think this board is unlike any board I've ever seen in covering business.

So just talking about the pay package when it was approved, the chair of the board or the chair of the compensation committee, Ira Aaron Price, who approved that pay package. Longtime friend of Elon's, has invested in many of his companies, more than 70 million we found in Elon's companies, has made more than 200 million in stock on Tesla, has literally said he loves Elon, right? Also still on the Tesla board. His brother, another so-called like independent board member at the time that pay package was approved, was someone who he's literally done drugs with over the years, Antonio Gracias. Also invested in all of Elon's companies, partied with him, vacationed with him. The list kind of just goes on and on. Even Robin Denholm, the chair of the Tesla board, who to her credit, I guess,

does not party with Elon, has still made an enormous amount of money from being a board chair, more than 200, almost 300 million we found. It's unprecedented. It's unprecedented. And I have to say, I was shocked when I saw her recent very rare interview in the FT about what she sees her role as at the company. And she literally said, well, I don't think it's my role to kind of like, and I'm not reading from it, so I'm paraphrasing here, but she said something like, I don't think it's my role to like police Elon's antics. Well, actually, that's exactly what her role is. And in fact, there's an SEC settlement from 2018 where

she is literally supposed to be policing his tweets, right? Right, right. So it's just completely hands-off this board, in my opinion. Yeah, absolutely. She also said, till the financial times will get us later, if I had a magic wand, Twitter wouldn't exist. Yes. But too bad, it does. It's a huge headache, but it's like her headache, right? That's her job. Yeah, exactly.

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For each episode, we have an expert send us a question. This one is no different. This one comes from my favorite NBA team owner, Mark Cuban. Let's hear it. Hi, my name is Mark Cuban, and I'm the co-founder of costplusdrugs.com. I have a mini Australian shepherd whose name is Tux. I can take Tux anywhere, put him in any situation, and without telling him anything, he'll be able to figure out what's safe and what's not safe.

He is smarter than any artificial intelligence out there today, which makes me wonder, if artificial intelligence is not as smart as Tux, how are we going to get full-service driving? Thanks. Oh, I like a good dunk. Who wants to take this one first? How about that? I'll take it. Becky? Okay. Well, I live in New York City. I don't drive a car, but people get hit by cars in the city all the time. I think that the dream is that all the cars

are talking to each other and they don't have to be perfect because the system works better than human drivers. That's not the world we live in. In San Francisco we see actual autonomous vehicles like Waymo getting stuck behind fire trucks, getting stuck behind plastic bags, getting stuck behind fire trucks, getting stuck behind plastic bags, blowing in the wind. The products are getting better. They're being developed, but they right now are only able to work really well in really specific environments. I think it's going to be slow. And I think, I mean, that's probably one reason why the RoboTaxi is such a big bet, because it's hard to see who's going to be buying

them and how soon they're going to be buying them. I think it's nonsense. I think it's hand-waving nonsense. It's a great dream. So, you know, I'd like to fly with my wings too, but that's the way it goes. All right, let's move on from Tesla and talk about SpaceX, speaking of flying, which seems like a bright spot for Musk. Right now, no one can compete with the Starlink service. There are competitors coming, as always. And as a recent journal article put it, SpaceX is one of the investing world's most exclusive clubs. Everybody wants to get in on this IBO when it goes public. Its COO, Gwynne Shotwell, is perhaps the most stable executive working with Musk, has good relationships with the government, etc. Kirsten, I want you to take this on. How does SpaceX seemingly avoid some of the management drama that affects Tesla and X? Well, they might not be avoiding it. We just don't know because they're a private company, right? So they're able to really keep a lot of things under wraps, especially like how the oversight is working both on the government end. Some of that is at least public, but still extremely hard to penetrate, understanding their relationships

with the various government contractors. And then, of course, again, with their boards, it's hard to tell who even is on the board there at any given time. It's a private company, so there could definitely be drama, but it does also seem like Elon kind of treats SpaceX as like a safe haven where he moves, you know, executives who aren't doing so well at other companies. Like he moved his buddy Steve Jurvetson off the Tesla board. He's still on the SpaceX board, for example. So he does kind of shuffle things around SpaceX. But it's going to go public, presumably. Yeah, the IPO is like, people are so excited about it. People are talking

about it all the time. And Elon and Gwen have both said that it's far away. I don't think that they are doing the process right now. I don't think they like are filing an S1 anytime soon. But everyone wants them to go public. There's just this complication that they have Starlink and that it's this giant company, they have government contracts that they don't necessarily want to have under the scrutiny of the SEC or the public markets. So there's some questions about how it would even be structured, but it really impacts how people interact with Musk. Like with the XAI fundraising, I talked to people who said basically they have no choice but to like participate because they want access. They want to maintain access and the SpaceX IPO is the ultimate access. That's correct. Yeah. It's a great carrot. But Tim, you had an article about Moscow Musk,

which I loved, as some critics have called him. I may have done that. They say he's a Putin apologist or even more a shilling for Russia. Musk says his companies have, quote, probably done more to undermine Russia than anything, end quote. Explain the controversy and then weigh in. He certainly does like to sidle up to dictators. That's one of his favorite moves. It's the Musk doctrine. We'll get to that. He's very, I mean, first of all, Starlink has been helpful in the Ukraine side of the war.

And Elon was kind of cheered on as a hero for allowing that and helping that. But then he really surprised a lot of folks when he wouldn't enable that satellite internet service in a part of Crimea where the Ukrainians wanted to attack the Russians. And he was worried it would kind of trigger a nuclear war or really just elevate things to an 11. And he said that he just wouldn't do it because of that. And it put him really in this kind of interesting position where he is kind of this citizen of the world, is making decisions that affect wars and really elevated that kind of the power that he has over kind of the world events now in a very unique way that has kind of, you know,

concerned people. And so, in his comments that have followed regarding Putin and the Russians kind of pushing for peace talks and raising ideas for how that would work, just to a lot of experts, a lot of close observers of foreign affairs, just smacks of kind of influence from the Russian side. Now, Musk would say that he didn't talk to Putin and that sort of thing, but he does seem to be favoring the party line, which then when you put into consideration kind of the role that SpaceX is playing and global affairs worries some people. Yeah, worries a lot of people, I can tell you. They sidle up to me at Washington parties all the time.

But Tesla also does a lot of business in China. SpaceX is a U.S. military contractor, as you just noted. In February, former Congressman Mike Gallagher said that Starshield, which is a military version of Starlink, wasn't working for American troops in and around Taiwan. SpaceX denied the allegations. Becky, what's happened since February? And stepping back, how is the Pentagon managing Elon's seemingly split allegiances in China? He just recently was there striking a deal to be able to sell more of those cars there. Talk a little bit about that complication for him and for the U.S. I think the federal government is in the same position as a lot of Musk investors where they have to sort of balance access and getting their own needs met.

In the case of national security interests, they probably have a lot more leverage. I'm not really sure what's happening on the inside with that. Anybody else on China where he is? Because he's made some statements that were pretty pro-Chinese. Absolutely. It's interesting, right? If you look at the revenues that come from China for Tesla, a huge important part of the business, really helped Tesla get to where it is in large part by allowing Tesla to be the first Western automaker to open up a factory without a joint venture in the country, allowing it to fuel massive rapid growth during the pandemic, allowing it to really kind of be where it is now. So you put that in the back of your mind, and then you see these pro kind of China comments that he's often making and, you know, siding with China and the debate over kind of where Taiwan fits into that scenario. And it worries people. And it gets back to the issue of Russia. It worries people, right? And it kind of alluded to it. I think of it as the Musk doctrine, where he has business in countries where maybe there are more tougher ruling leaders that have a stronger grasp of things. He seems very

deferential. But in other countries, such as the US, he's very quick to go after every level of power and uses that, in some ways, that defiance as part of his power that he gains in places like the US. You don't want to be a government official in the U.S. being attacked by Elon Musk. It's not just him, it's his echoverse of followers on X who then amplify every criticism and every attack to the point where it's very hard to be a politician in the country and be under attack like that. So, let's talk about Twitter, X. It's now fully and officially x.com. And he is not CEO, but the CEO, Linda Iaccarino, recently was a punchline at the network up front and everywhere she goes. The show that she created with Don Lemon blew up in her face because of Elon being upset about it. Let's talk about the business of X right now.

Becky? Yeah, we don't have a lot of insight into how well ad sales are doing. I think it's still pretty much an ad-run business. The subscription business is not very popular. I personally am subscribing right now because I wanted to try Grok and see how it works. I don't have any sort of daily use for it. It's just like

kind of sarcastic news summary. But there are people who are paying for it. I think it's still mostly sort of like the Elon Stan universe or people who are trying to become influencers on the platform. And Tim? Yeah, is an ad business, it doesn't seem, it's clearly not what it once was. Right. But if you think about it as something else, it's clearly not what it once was. It's declining. Right. But if you think about it as something else, it's really an extension of his power, his soft power. It's definitely having influence, right? He's been embraced by a lot of people. It's expanded his reach into certain areas.

It's definitely given him a bigger voice in global affairs in a way that you don't typically see with most CEOs. So in that regard, it is an interesting tool in his toolbox, right? He goes from the guy who had probably the biggest reach as a user, or at least among the biggest reach as a user, to now nobody can take him off of it, right? And it gives him carte blanche to do kind of whatever he wants. And as long as people are continuing to go to it and people seem to keep engaging, that gives him a lot of power with it. Right. He does have, he was just a car guy before and now he's this. Now, at times recently published an investigation into Elon's relation with right-wing leaders like Javier Malay of Argentina, Jair Bolsonaro in Brazil, Narendra Modi in India,

and they basically concluded that he's lavished them with public praise, usually on Twitter, and then gotten favorable treatment for his companies from them. Kirsten, talk about this Twitter diplomacy. When he was buying Twitter, everyone was sort of perplexed, but a very sharp fellow billionaire told me he bought the company for international influence

for his other businesses more than anything else, and I think that's borne itself out. Yeah, definitely. I mean, it's interesting because the Twitter thing is kind of two separate trends coming together, right? So, immediately after he bought Twitter, he kind of rearranged all the systems and the algorithm to make sure it was preferential to him, right? And you can even just see that going on there now. was preferential to him, right? And you can even just see that going on there now. And so now this is spread into his other, you know, job that he wishes to have, which I guess is one of a diplomat because he really wants to be involved in all these international affairs.

And much like he was doing at Twitter, he's now kind of like leaning on these world leaders he's buddies with to get stuff done. Yeah. And is that effective? Is that worth the price of the money he's paid for it? I think in some cases it is effective. As you pointed out, my colleagues wrote about recently, it is effective sometimes. I personally think it's so funny, this bromance he has with like Argentinians Malay, right? I mean, all the

pictures and the fun they're having. And it definitely, you know, I'm sure he's not just doing that for the heck of it, right? So. Yeah. So, Tim, when you, one of the things, the Twitter acquisition and the tsunami of mostly negative press that's followed him since he got there, and it seems to have taken his toll. How much time or mental space would you say X occupies for Elon? And what is the price? Well, he would argue, if he was here, he would probably argue that it doesn't take that much time, right? That he's just one of many children that he loves. But clearly, it has taken a toll on his businesses, right? And if you look at recent consumer data at the

end of last year, when he was being very outspoken on very contentious issues, you saw percentage or the share of Democrats that people about car buyers who identify as Democrats buying Tesla dropped dramatically, a sign that maybe they couldn't stomach kind of where he was going politically. That was really the first time we've seen this. And it's a bad sign for a carmaker, an EV carmaker, because in the US, the biggest cohort of buyers for electric cars are Democrats. Now, he has brought Republicans in to the Tesla tent, which is very important for growing that technology to be mainstream, but he definitely needs Democrats. And if they're turned off by his issues and his antics, that's troubling for the company.

And Twitter has debt. Nobody has sold the debt. It does have a heavy debt load. He obviously has rich friends that want to get into the SpaceX IPO. Why have these banks not come after him? Is it just like a rich guy owning a yacht? This is his version of a yacht. There's a lot of people that think XAI and Grok are going to be the key to turning the Twitter acquisition around. There's people who think he's going to pull a rabbit out of a hat

and he's going to use Tesla data to train these models and it's going to be the smartest AI on the planet and then they'll have been in early. He's not having any trouble fundraising for XAI. Yeah, let's talk about that. So he's reporting raising $6 billion to create a competitor to OpenAI and others in which he played a major role in the early days and then broke from. $6 billion is nowhere near enough money to compete with OpenAI, Microsoft, and Google. So you're talking a rabbit out of a hat. Is it really a rabbit or is it a dead rabbit? And is it okay to use his other company's data to do it? That's another thing.

Yeah, the legal question and whether Tesla, how ownership of that data works, I think will be a big issue over the next few months. It's actually come up when I have talked to people about the compensation package. Like if Elon is disengaged, but he's still CEO, is he going to use Tesla's resources to just make XAI into this giant AI company and leave Tesla behind? So I think that's one of the concerns from the people who are concerned. In the AI space, I haven't really seen very much traction for Grok. I've talked to people who say it's just not very practical to build on Grok.

I don't think it is considered really extraordinary compared to the competitors. But $6 billion is a lot of money, and it's money that other companies can't necessarily raise. And there's the argument that he'll be able to buy enough hardware that he can train models to be smarter than any other models out there. So maybe the money will transform this, but there's a lot of competition in the AI space right now, and they're pretty behind. I mean, Amazon just gave me Anthropic 4 billion, I think. It's just like not enough money. It seems like it's not. It just seems to me, I don't know. Dots, Tim or Kirsten? Well, you know, I mean, you ask why, you know, why aren't people upset or why investors going along with this? Well, if you look at kind of the long arc of his career, he's taken on a lot of things that didn't make sense at first blush,

that looked like they were going to fail and has pulled off these kind of rabbits, if you will, And has pulled off these kind of rabbits, if you will, with whether it's the success of SpaceX or Tesla success, right? So, those successes give him credibility. Investors, a lot of time, are willing to kind of hold their nose in the current drama, the current dramas, because they're making the long-term method over time, ultimately, that'll be successful. And that is part of the drama around Elon Musk and why he attracts supporters and detractors is you don't know if he's going to pull it off, right? Is this the time that he's going to trip and fall on his face? Or is he going to yet again kind of impress everybody with some daring feat? Right. In that regard, Neuralink, which they recently published a live stream video that showed the first patient to get the company's brain chip implant, move a cursor with his mind.

It's now got some problems. They're still working on it. They're going to implant another person, but apparently the little strings came out of the brain or something like that. He and I have talked about this a lot, but it's way far away, this idea. And there are other companies, again, there are other competitors that nobody gets written about that aren't just his thing. How much progress has Neuralink made towards its very heady goals? And is it a flash in the pan or a real company? I did some research into Neuralink. You know, I don't think it's a flash in the pan. I think it's a legit company. I actually don't think he's very involved with it at all. It's just, you know, Neuralink and the Boring Company seem to me

is sort of like, kind of like the fun tiny things he does on the side sometimes. But it does seem like it has been on track to help people with disabilities. But this goal of all of us using Neuralink as a society seems many, many years, if not decades, off. We'll be back in a minute. So let's talk about his state of mind, because he is a restless mind. And of course, he's gotten more involved in politics. Kirsten, you broke the huge story about Elon's recreational drug use, which everybody knew about, I can tell you. Including, and thankfully someone wrote it. And yet it took us a year to get that story.

I get that. I understand that. But I'm saying everyone knew about it. Everyone knows he's using, you wrote about using LSD, cocaine, ecstasy, mushrooms, ketamine. Talk about his partying in the drug use and what role, if at all, it plays in his decision making. What has changed since you reported on that? And I have to say the most important thing about that story was the money the board was getting to me. That, to me, was at the dead center of it. But go ahead.

Definitely. To be honest, I don't think much has changed. I mean, I think, again, this comes back to the Tesla board especially. So, something like this, when a high-level executive, maybe not even the CEO, is using recreational drugs at a normal company, that would warrant, at bare minimum, an internal investigation. And maybe it could be like, you know, a check the boxes internal investigation. We hire an outside law firm. Think about if this was like Pfizer or Morgan Stanley's CEO. None of that has happened in this case. The government contractors seem not to care what kind of drugs he is doing or not doing, even though it's a clear violation of his government contracts. So I think it's kind of just the status quo, to be honest. Yeah. So nothing happened. Nothing. Nothing. Nothing.

Not the government, not losing his security. To our knowledge, right? So I mean, there could be something going on. But, you know, in that Financial Times interview, Robin Denholm even said she wasn't aware that he was using drugs, I believe, which is just sort of unbelievable. Yeah. Yeah. So, nothing at all. Just he's taking drugs. That's it. Yeah. Any other executive would have been fired. But, you know, Tim, I think, brought up a really good point, which is always super important to remember when writing about Elon Musk, is Tesla has done insanely well. SpaceX has done well, right? So if you're an investor in these companies, why do you actually care if he's, like, doing Coke or whatever he's doing, right?

The company's doing well, so it, so there are two sides to this, for sure. Yeah. Well, Tim, last August, you did have a column with the headline, Elon Musk's latest antics have some asking, is he out of touch? According to some of his supporters, he is, quote, ensconced in a distorted reality that is warping his perspective and threatening his businesses. You've had about 10 months to consider that question. Is he out of touch with reality? He seems to live in a bubble, that's for sure, right? A bubble of, you know, we've seen over

the years, you go back to the early days of Tesla, let's just use Tesla as an example, early days, there were people around him who told him hard truths. They didn't maybe last long, but they did that, and, you know, for the betterment of the company. It's hard to say that there are people around him now who are giving him the same kind of hard company. It's hard to say that there are people around him now who are giving him the same kind of hard truths. We don't know that to be the case. I don't know that to be the case. And it's hard to see anybody there tempering some of his excursions, right? And so, by its very nature, you've got a lot of people around him who are either hanger-on or kind of supporters or people that kind of encourage him to be in that

bubble-like environment. Then, but I'll put that aside, then he's on Twitter and he's hearing, he's taking in all the X, he's taking in all of the negative feedback and seeing it all, but then he's also being reinforced by this new kind of lesion of echoes that kind of, whatever he does, support him, and that kind of feeds him even more so it's an interesting dynamic where he kind of is a guy in his own little world where he hears everything he says is just great yeah that's certainly true i've heard from a lot of people close to him that are disturbed i would say to the item they're all like carrie you want to talk about i'm like no you should get him some help that's my feeling You should get him into therapy if you're really worried about him, actually.

It's not my business. But Becky, to Tim's point, do people around him who can tell him no push back on his bad ideas? Is that a problematic thing? Has he lost perspective because he's surrounded himself with yes-men who slavishly lick him up and down all day? How does that impact the situation? That's what it is. I'm sorry, it is. I've heard from lots of people.

I think we saw with the Tesla layoffs that people who don't do exactly what he want don't last very long at the companies. People get really scared when they have to directly report to him. It's so much better to have a manager in between because if you're directly reporting to him and he's so much better to have a manager in between because if you're directly reporting to him and he's observing everything you're doing, there's no way he's not going to

find something wrong with what you're doing. So I don't think there's a lot of space for pushback at Tesla or SpaceX. So where is pushback? Does it exist? I haven't found any pushback. I haven't either. Yeah. It's interesting. I talked to him about this years ago, and I said, you know, there was something that happened. I said, well, I've talked to a bunch of people who said they told you this was a dumb idea. And he says, well, people all the time tell me I've got dumb ideas, right? You know, but I land, they said I was never going to be able to land a rocket. And I've done that. And, you know, I've done this EV thing. And that, and that kind of, you see that clouding some of his thinking, right? It's almost as if he wants to prove somebody wrong if they're saying him, telling him no or that's not possible, right?

Yeah. And we've gotten to the point now where it. I think it's a real blind spot. He used to listen to a lot of people. I know people think he's kind of a troll right now, but he did used to. He had a lot of people around him who pushed back on him, and now I think there's almost nobody. And speaking of people who do influence him, Tim, you wrote a piece about Elon's infatuation with God Saad, a Canadian marketing professor, author, and culture warrior who rails against the quote-unquote like-mine virus. It's just one of the right-wing thinkers whom Elon seemed to have glommed onto. I feel

the COVID lockdowns radicalized him more. He was upset the Biden administration ignored Tesla, his words. Is there any clue to help us understand his obsession with sort of strafing immigrants, Jews, trans people, black people, gay people? And are there any other right-wing thinkers he's engaging with online besides Saad? It's definitely, you definitely see, and he's even talked, Elon's talked about 2019, he starts to see the world a little different, but then COVID happens and we really start to see it differently through his public stances, right? And one of the things that makes it challenging to write and to kind of follow him is that sometimes he is on the forefront of kind of having his fingers on the pulse of where society is on some of these contentious issues, right? It's not that, you know, immigration is definitely contentious. I don't think a lot of people would say they support illegal immigration, right? But it's the tone. It's the tone, it is the things that he's saying that goes a little too far in a lot of people's minds. It's

a cruelness to it, right? And, you know, that is some of the challenge of like trying to kind of balance as you watch him as a man and as a leader. And I think Walter Isaacson talks about demon mode, where sometimes it just something clicks. And I've talked to people over the years who say, you can almost tell the red mist had come over his eyes of just anger and, you know, seeing things in a certain way. And, you know, I guess it's the flip side of his ability to be so right on so many issues to think that EVs could be a thing or rockets could be a thing. And then some of these other social issues, he seems to be out of touch with a lot of people that are very hurtful to some people.

Kristen, what do you think about that demon mode? I think it's nonsense, but go ahead. and very hurtful to some people. Kristen, what do you think about that demon mode? I think it's nonsense, but go ahead. Well, I think the real issue, and this speaks to the demon mode, is, and this is not just Elon, this has been a problem with other executives, is you don't know when they actually have an actual mental health issue versus their drug use.

And so is demon mode just like actually when he's like taken too much ketamine? Is it actually because he has a diagnosis that we don't know about, even though we've spoken about other mental health issues? So I think it does, I agree, sound a little bit sort of like apologetic to him, but I think it really more than that speaks to the fact that we just don't know. And won't know. And won't know, probably, yes. Becky, when you talk to people, I think a lot of executives kind of want to behave like him and then don't in some ways. But do you get worries from those who are there at the company

about that? Or are they just going along for the ride? It's totally mixed. There's still a lot of people who really look up to him. Even when I talk to people working at the factories, it always surprises me. They'll describe conditions that are unsafe. They'll describe bullying. They'll describe ways in which just the HR has failed them. And they'll always say,

I don't think Elon would let this remain if he knew about it. They often think that Elon, they see him as sort of like a flawed hero, but who would not let the conditions of the factory slide if he was like there on a day-to-day basis. It really surprises me because I see it as being a little bit more of a trickle down. I think that like very high level managers do have an impact on what things are like on the floor and that they are responsible for what things are like on the floor. But no, there's still a bit of a hero dynamic. He's often not blamed.

Yeah, it's a little Trumpian. And speaking of that, Musk met with former President Donald Trump in March. He said he doesn't support Trump. I think he's lying. He also said he might endorse a candidate closer to the election. What's their relationship like? Or is RFK Jr. more of an attraction to him, Tim? He's been clear that who he's not going to support, and that's Joe Biden, right? And he definitely has embraced the Trump populism, the billionaire populism, if you will.

And that can be helpful to the Trump campaign. will. And that can be helpful to the Trump campaign. It can help elevate the message, it can help kind of amplify that message as we get closer to the election day in November. And that's beneficial to Trump, having Elon out there attacking Biden on a regular basis and kind of amplifying discontent about the president. And you definitely want that if you are Trump. You don't want it the other way, right? Sure. So I'd like to end on this idea. Tim, one of your recent columns was called,

With Elon Musk, Does the Bad Outweigh the Good? So let's hear from all three of you when factoring in everything, does the bad outweigh the good or vice versa? Are we in the Howard Hughes portion of this story? You had a passage I want to read, Tim. It was also talking about the pay package, but also what he was like as an entrepreneur many years ago, which is when I spent most of my time with him.

It was also another era for an entrepreneur, one before Musk pulled off one of the most remarkable corporate turnarounds in a generation and became in the process one of the world's richest men. It was the era of Elon as the underdog, the guy with a chip on his shoulder trying to prove Motor City and Big Oil wrong, as well as all of those short sellers betting no rooting against him. Hungry Elon, sleeping on the floor, factory Elon, staring into the abyss, chewing glass Elon. Factory Elon staring into the abyss, chewing glass Elon. That factory floor thing was so nonsensical. In any case, each of you, let's start with you, Tim, since you wrote that, then Becky, and then Kirsten, you get the last word.

People always want to know, is he the hero or the villain? And I think it depends on the day. Sometimes it depends within the day, right? There's just a lot of gray. And I think the long arc of time will kind of weigh that. The challenge with judging or kind of making an opinion on Elon in the today is that there's so much changing. We don't know what Elon we're going to get tomorrow or the next week or a month or a year from now, right? And what do you think it will be? That's the drama of it all.

Oh, you're not going to guess. Think about what he has already accomplished, though. It would have been 20 years ago. Oops, sorry. Who let the dogs out? It's my dog. 20 years ago, it would have been hard to imagine, you know, the idea that electric cars could be, you know, not even competing, but eating lunches of the established car makers.

So that, in a lot of ways, is some of his legacy. What he's done with space is some of his legacy. But now kind of as we get into this later part of his life, that will definitely be part of that kind of legacy that he leads. Becky? I think we're entering the era where Elon has competition in EVs, competition in reusable rockets, and we'll find that his early advancements in those two areas are some of the best things that he's done. I think that the market is just going to get a lot more difficult for him. He's not going to be the only one doing it anymore. The question of what he does next, he has so many supporters.

Like I said earlier, he can raise so much money. He's never going to be the underdog ever again. But will he have the same impact? I am open to having my mind changed, but I suspect that the best work is behind him. Yeah, I would agree with that. Although someone asked me if he was ever going to be, when's he going to get gotten? I'm like, never. He's really rich. Never. Kirsten, you get the last word. Well, that's kind. I mean, I agree with Becky. I think his fan base is still completely enormous. But I do think Twitter really hurt him. And I do think that just from what I've seen, and even just from, you know, the willingness of people to talk about him, even, you know,

on background or off the record, I think the sentiment is changing against him for the first time in a way that it hasn't in the past. You can even see it in San Francisco with all the people with the bumper stickers on their Tesla saying like, I bought this before I knew Elon was crazy. So I do think there has been an effect. Yeah, he's a butt of a joke now in a lot of ways, which I think was unfortunate because he didn't have to be that way. In any case, we will see what happens. Who knows? Maybe he'll go to Mars and stay there. One can hope. Anyway, thank you so much. We love your reporting. You'll have plenty of material. And if you ever get it, if you ever run out, you can go over to OpenAI and then there's plenty of material there. Anyway, thank you so much, all three of you. Thank you. Thank you. Thank you.

On with Kara Swisher is produced by Kristen Castro-Rossell, Kateri Yochum, Jolie Myers, and Megan Burney. Special thanks to Kate Gallagher, Andrea Lopez-Cruzado, and Kate Furby. Our engineers are Rick Kwan and Fernando Arruda, and our theme music is by Trackademics. If you're already following the show, you just found Tesla stock you bought five years ago. Bingo. If not, you have to party with Steve Jervison. And I can tell you that is not going to be any fun. Go wherever you listen to podcasts, search for On with Kara Swisher and hit follow.

Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Thursday with a new episode of On.