Power Lunch - Tesla CEO Elon Musk confirmed that the company will have robotaxis on the streets of Austin, Texas, by the end of June. 5/20/25

Episode Date: May 20, 2025

In an interview with CNBC’s “Power Lunch” at Tesla’s headquarters in Austin, CEO Elon Musk confirmed that the company will have robotaxis on the streets of Austin, Texas, by the end of June.Musk also said Tesla aims to bring its robotaxis to Los Angeles and San Francisco following the planned Austin debut. While remaining at the helm of Tesla and also running SpaceX and xAI, Musk is serving as a key adviser to President Trump after spending nearly $300 million to propel him back to the White House.Don’t miss our entire interview with Elon Musk. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And David Faber out in Austin, Texas. Thank you very much. Fantastic interview with the Secretary of Transportation, Sean Duffy. And we are waiting on Elon Musk, which Kelly Evans, you just showed up. You were in another studio and now you're here. Good to see you. It's good to be here. Welcome to Power Lunch.

Yeah, welcome to Power Lunch or we call it Elon Musk lunch. Today we're going to be able to hear quite a lot. David's sitting down with him any moment now. He Musk, Faber Musk and the Transportation Secretary were just riding in a full self-driving Tesla, all of which comes as they're going to launch the full self-driving kind of robot tax, not the cyber cab in June in Austin. So there's a lot of lead-up, I think, to that event. Yeah, and very different things. I know David is talking some good questions about sort of when can we expect this. I know David recently wrote in somebody's Tesla had FSD full self-driving.

I recently rode in that Waymo, which is a true... Which you were fine with, right? A little jumpy at first. I mean, it's my second trip and one. The first one was like a half a mile. This one was a real trip. I rode in one of the GM vehicles 10 years ago. We are way, way, way beyond that. People take Waymos all the time.

They let their Tesla drive themselves all the time. So the question now is kind of the regulatory environment. Yeah. I think you nailed it. I think, and I've got a neighbor who helps run an auto insurance company. We talk a lot about this. The reality is regulation, not technology, is the issue. Who insures these cars?

If there's a wreck, do you sue Google if it's a Waymo? Is it even car insurance or is it product insurance, right? So all of this, you're absolutely right. It has to be figured out. Right now we've had some states moving forward and some jurisdictions on it. Others are kind of dragging their feet a little bit. So it's noteworthy to see the Transportation Secretary in that vehicle talking about how they're going to, you know, clear or not clear a pathway for more of this technology to go full time. So let me ask you a question, Kelly Evans.

While we wait for David Faber and Elon Musk, you and Eric, you and Eric, Yes. Crosby. Let's just say you owned a Tesla. And night you're sleeping. Right. And the car, this is true cyber cab, wants to be used to generate income. We're a few years down the road at this point.

Would you do that? Sure. I don't know. I mean... Do you want someone else in your car? No. Okay. Look, if it could just drive me to work so I can do other things in the meantime, I'm fine with that.

That would have enough value in and of itself. And I think the car with FSD, full self-driving, can pretty much almost do that, although the camera is always on your eyes. And David Faber would know this because he just took a long trip using full self-driving and a friend's Tesla. And he's joined now by a guy that knows something about Tesla. No? Okay, I was told that we were going to Elon Musk, but, you know, it's Elon Musk. He can do what he wants. Here's the shares, as you mentioned, up 2.6%.

So we've seen the, obviously, huge run-up post-election, huge sell-off post inauguration. And Musk, he was asked these questions at the Qatar Investment Forum this morning. You know, is your time, is his time in the White House coming to an end? Obviously, the 100 days as a special advisor, yes. He said he's going to stay at the helm of Tesla for five years or so. And of course, he talked a lot about the excitement he has in some of his other projects as well, SpaceX and all the rest of it. Okay, I lied by 60 seconds.

David Faber is now with Elon Musk in Austin, Texas for a wide-ranging interview. Let's go to David out west. Brian, thank you, and Elon Musk is here. We're in the lobby of the Gigafactory here in Austin. Last time I was here was your annual meeting a couple of years ago, so thank you for having us back. Welcome back. You got a robot taxi right behind you. We do?

Yeah. Yeah, you can see it right there. Obviously, you've been meeting with the Transportation Secretary. Yeah. Are you going to have full autonomous on the roads of all? Austin by the end of June? Yes. You are.

What gives you that confidence? We have cars driving 24-7 with drivers in the cars, and we see essentially no interventions. So we want to be very careful with the first introduction of unsupervised self-driving, meaning that the car is driving around with no one in it. So we're going to be... But no one behind drivers? Well, yes. And sometimes no one in it at all.

right up just going to pick someone up so the car has to be incredibly safe so we're we're just being and we have thousands of cars that are being tested which is creating some strange situations where we just drive there's just a bizarre number of Tesla's driving past people's houses they're like what's going on i think we even saw one last night coming from the airport yeah driving at night alone so so just looked very lonely it's just a they look a little lonely yeah um so Yeah, yeah, it's looking good for Orson next month. You know, some estimates have been that you're only going to have 10 to 12 of them on the road initially. I mean, it's going to be a very small amount.

Is that correct? Yeah, yeah, for the first week. First week. How do you see it ramping up? Well, we'll have to see how well it does, but, you know, I think it's prudent for us to start with a small number. Confirm that things going well, and then scale it up proportionate to how well we see it's doing. Right, and what's going to be a judge of how well it's doing? I mean, are there any incidents, are there any interventions?

And, but we want to be, we want to, it's deliberately take it slow. I mean, we could start with a thousand or 10,000 on day one, but I don't think that would be prudent. So we'll start with probably 10 for a week, then increase it to 20, 30, 40. And I think by, say, you know, we'd probably be at 1,000 within a few months. And then we'll expand to other cities, so expand to San Francisco, California, Los Angeles, San Antonio. Is that a real possibility in the not too distant future? I mean, Texas is very different. I don't need to tell you than California when it comes to regulation.

They don't really have much here in terms of dealing with autonomous, but it's a different story in California. Yeah, but California's already approved. Waymo has been doing autonomous driving in California for a while. Right. But do you need to do? separate approval or is it right now the approval process is very haphazard and sort of state by state and sometimes city by city we were talking to the secretary of transportation about that very fact a moment ago yeah right so it's going to be important to have a unified set of national regulations for self-driving cars otherwise you're going to get into this weird situation where if you're driving

from Maine to New York you're going to go through tens of different sets of regulations cars going to behave differently it's not going to make any sense no so So one set of regulations that, just like there is for highway driving, that's what I think makes sense for the country as a whole. But my prediction is that probably by the end of next year, we'll have probably hundreds of thousands, if not. Hundreds of thousands? If not, if not over a million Tesla is doing self-driving in the U.S. Those are not. Okay.

What percentage of those are going to be? Well, not the cyber cab. You're just talking about on full self-driving level four. Unsupervised full self-driving, meaning you do not need to pay attention. Right. For me, if I own a Tesla and I have the software, the capability of doing it.

Yes. Right. But we'll have a model which is kind of like some combination of Uber and Airbnb. So if you're a Tesla owner, you'll be able to add or subtract your car to the fleet. So just like an Airbnb, you could like rent out your spare bedroom or run out your house when you're not using it. and the same thing will be available for Tesla owners. So it's a way for Tesla owners to earn revenue.

Instead of having your car sit in the parking line, your car could be earning money. You and I talked about that a couple of years ago, which takes me back a bit because of course, I mean, you remember 2019, you were talking about 2020 the introduction of Autonomous, and now you just introduced a fairly somewhat ambitious target. Why do you have the confidence now that,

in, what was it, in a year, there'll be a million available? available? Well, by the end of next year, I think. And then next year. So it's just more like 18 months. 26. Okay. Yeah. Right. I think that's, I mean, these things happen slowly, but then all at once. So, you know, it's a Peter Thiel has a book 0 to 1. Once you make, once you have a proof point, once you have it working, then scaling up is, you know, at just a matter of time. So once it's working well in Austin, then, you know, we'll make sure it works well in other cities. I mean, there are obviously some unique cases like downtown New York.

Like, you know, if you're in, but that's a highly unusual situation. Most cities in America are like Austin. Right. Although you can go on full self-driving right now in New York. I mean, you can obviously have to sit there behind the wheel, but, and it'll do it. Oh, yeah. No. It'll navigate the traffic.

I've seen it. Yes. Even a Tesla that you buy it right now, and the self-driving just costs $99 a month, We'll give you autonomous driving anywhere in the country right now. The question is, when is it unsupervised? Right. Where that's where we want to... Where you're sitting in the back, so to speak.

Yes, where you're like asleep and a car, you wake up at your destination. In order for that to be the case, we want the autonomous car to be much safer than a car driven by a person. Right. Are we, but, you know, again, I'll come to Waymo because even though they only have about 700 cars, they obviously are on the market. They're in Beverly Hills all over. the place you're in. It's a proof of a concept.

They've got 28 cameras, they've got LIDAR and radar. You've had a different approach, six, I think, eight to nine cameras and the neural network. Why do you feel that that is going to be the equivalent in terms of safety profile? Oh, I think it'll be better. Why? Because the way that the road system is designed is for AI. It's basically, I should say, it's for intelligence, biological neural net and eyes. That's how the whole road system is designed.

So what will actually work best for the road system is artificial intelligence, digital neural nets and cameras. And we also have the microphones, the car can hear emergency vehicles, that kind of thing. You are going to have the microphones to hear the... Yeah, you need to hear. That was a question, right, you need to hear a fire engine or a police car. Yes, exactly. Right.

But that's how the whole road system is designed. It's not designed for shooting lasers out of your eyes. So... And what we found is that when you have multiple sensors and they can be able to be able to they tend to get confused. So do you believe the camera or do you believe the LIDAR? And if you get confused, that's where you can, that's what can lead to accidents. So we used to have, for example, a radar in the car, but we found that the radar and the camera would sometimes disagree and then you don't know which one to believe.

So it wasn't a bad expense. It was just about no. Yeah. Are you seeing the data right? In fact, we turned off the radars in the cars. You turned off the radar. Yeah. So, I mean, are you comfortable right now? If I were to say to you, all right, let's go. You think that you're there in terms of the safety profile you're seeing right now? Yeah, we could take a ride today if you want, sure. Yeah, I'm happy to take a ride with you anytime you want, wherever you want. Logistics capability to operate sort of a ride-hailing fleet at scale, because you mentioned, obviously, let's call it the end of 26. Are you going to have an app? Are you there? Do you have

that ability? I think we can figure out an app. You know. You're not worried about it? Which has already has an app. Yeah, I know. But so is there going to be a right-haling app you'll introduce for you? how to write an app, you know, that's really not the... It's not too hard. No. X-A-I can probably do it for you in like an hour. Because I can ride apps just fine. Do you ever consider licensing the technology at some point?

Yes. Yes, there are a number of major automakers that have talked to us about licensing self-driving and we're very much open to that. So I think the more we demonstrate the capability of self-driving, the more that they will want to license it. and we're happy to help. You know, back to the safety profile, because it's going to obviously be something of the key focus. Business Insider, take it for what you want,

but I saw this over the weekend. They did a test between Waymo and Tesla, and they weren't critical at all. Business Insider is not a real publication. No, but it did see it regardless of whether we want to have a debate about their journalist's integrity, which I don't. I the test itself let me just share it with you and get your reaction which was The Waymo ultimately they said prove better in part only because it avoided with its geo fencing one very difficult intersection

that the Tesla chose to go through it stopped at a red light but then it went through the red light What's your reaction? Look I'm not going to comment on some Business inside article, but is that a concern at all because in a way there's no geosur fencing so it's like it's happy to go on the highways in a way that perhaps a waymo is not i guess my question is is that a concern at all for you in terms of it encountering things that are still sort of a crucial test and perhaps it fails no first of all that was a that actually should have been a test of supervised on self-driving if it's a supervised self-driving uh not unsupervised self-driving so the assumption there is that you have a person who is

going to take over right so that their test made no sense Okay. For, when we deploy the cars in Austin, we are actually going to deploy not to the entire Austin region, but only the parts of Austin that we consider to be the safest. So we will geo-offensive. You will? Yeah, of course.

Yeah. So it's not going to take intersections unless we are highly confident, it's going to do well with that intersection. It'll just take a route around that intersection. But there won't be a safety driver in the car. correct right the car it won't there's not going to be somebody sitting there right um but you did have ads for vehicle operator autopilets what was that about then are there going to be people who are remotely sort of monitoring the performance of the fleet yeah and what will they do so they'll

we're going to be extremely paranoid about the deployment as we should be are we foolish not to be So we'll be watching what the cars are doing very carefully. And as we find as confidence grows, you know, less that will be needed. You know, again, you spoke about it, and we spoke about it a couple of years ago. And obviously, your investor base, many of whom are watching right now, are interested in the revenue and profitability of this ride-hailing auto-robotaxie and autonomous driving opportunity. EYD, I believe at this point in China,

is now offering levels of autonomy for free. I mean, are you confident you're going to be in a position to continue to get a premium for that particular level? Well, interestingly, in China, we're not allowed to train on videos in China. So when we've released Full Self-Driving, it was actually just trained on the right. the world but not in China and the tests by local Chinese publications I think concluded

that even without training on local Chinese roads the Tesla self-driving was the best. It was the best. Yes. But again, I mean, it's the technology. In fact, there's some pretty wild videos where people are like doing self-driving, which we don't recommend obviously, on like narrow mountain roads, including one where it's, there's a sharp precipice on either side and no barriers. and they're doing self-driving across that.

They may have more confidence, perhaps they have more confidence in China. I don't recommend this, but I saw the video. Are you regulated tab full, where are you in China right now in terms of your ability to offer that product though? Well, we have, just get the terminology right. Understood. Unsupervised, we're sorry, supervised full self-driving where there's a person in the car, has approval in China.

But whenever we release a new version, we have to get an incremental approval. Right. And at times, we do have to battle other car companies in China who are trying to stop us from deploying. It's incredibly competitive market, isn't it? China is the most competitive market. And to the extent, BYD, which is neck in neck with you,

I think, in the EV race, I think it's fair to say, worldwide, correct? I don't really follow that. You don't? No. Well, they're willing, again, my question is they're willing to seemingly offer different levels of autonomy for, I don't want to call it free, but part of the cost of the card. You see that as a possibility for you, or is it always going to be that add-on and therefore

that significant revenue stream conceivably? I don't really think about competitors. I just think about making the product as perfect as possible. You don't think about competitors at all. No. I just think about making, what we want to achieve is the platonic ideal of the perfect product. And as long as you focus on that, you will have a compelling product, obviously. All right, well, there's a potentially compelling product right behind you, which is a robo taxi.

So when are we, you know, in five years, are they going to be all over the place? Yes. They will. You're confident in that. Yeah. Talking about Tesla, obviously, you know, takes me to a certain extent to what some would say is the brand damage done by your government service. I don't know if you would agree with that. There have some pros and cons.

There have been some pros and cons. You know, we sat here two years ago upstairs, and you famously said when I asked you about this very subject, I don't care. I'm going to say what I want to say, and so be it. Do you regret that? No. No, why not? I believe that we want to live in a free society where people are allowed to say what they want to say

within reasonable bounds. Like, you know, you can't advocate for the murder of somebody. But free speech is the bedrock of a functioning democracy. That's why it's the First Amendment. Without a doubt, but I guess my question is more about your work at Doge, for example. Was that worth it? You know, to the extent you are now, Elon, you are somewhat divisive figure two years ago, but now you really are.

I mean, there are people who love you, but there are a lot of people who dislike you, some of whom were your customers. And I wonder, was it worth the undertaking at Doge and everything else that you've done and how it's spoken you've been in terms of the things you believe in to antagonize so many potential buyers and or users of things like a robotax? Well, I mean, unfortunately, what I've learned is that legacy media propaganda is very effective at making people believe things that aren't true. What would an example of that be?

That I'm a Nazi, for example. And how many legacy media publications, talk shows, whatever, try to claim that I was a Nazi because of some random ham gesture, at a rally where all I said was that my heart goes out to you and I was talking about space travel and yet the legacy media promoted that as though that was a deliberate Nazi gesture where when in fact every politician every any public speaker who's spoken for any length of time has made the exact same gesture and yet there's still people out there and I've never harmed us I've never harmed a single person

you know what Elon I was now you asked for an example I was I wasn't even going to talk to you because in fact I know a number of people who are close to you and I called them afterwards and all of them to a person were like no way no way of course not but that isn't necessarily the perception the work you've done for Doge has also come obviously into the spotlight and a great deal and you know people are upset about USAID being put into the woodchipper people are upset about AmeriCorps disappearing people are upset about and this isn't even on your side the NIH and so many other areas that they feel rightly or wrongly are being cut as a result of

your efforts and I I guess I wonder, as you start to transition now back to Tesla in a more significant way, was it worth it? Yeah, first of all, any program in USID that had any semblance of merit was retained and folded into the State Department. So, and if there's some exceptions to that, we're all ears and we'd love to look at it, we just want to see the evidence that the program was doing actually doing good and not just funding, graft in D.C. and warlords in some country. Because over and over again, we saw sympathetic-sounding programs.

But when we actually said, well, please show us pictures of the recipients of the aid, or let us get into contact with them. No pictures were forthcoming. They didn't give us any contact information. And we're like, look, we're not going to send money to DC grafters and warlords. That's not a good use of money. So that's not what we're going to do. Now, invariably, when you stop, waste, and fraud,

it's not like the fraudsters admit their guilt. They don't say, like, oh, isn't it so great that the money we were getting, fortunately, has been stopped. They will obviously come up with a sympathetic-sounding claim that, but that claim has no merit. That all may be true. I guess what I would come back to, because I talk about economics all day long,

is, you know, to your point, you've been making we have a deficit that's running at about 6.7% of GDP right we have interest costs that are going to be above a trillion it's not going down next year you entered this thinking you could cut as much as a trillion dollars you're nowhere near that it's not really making the dent I think you may have thought you might have been able to achieve in terms of a true problem would you agree well first of all it would obviously be ridiculous to assume that we could achieve that on day one. So it's only been, like, what, four months? Yeah. And we've done, by our calculations,

people may disagree, improved the deficit by $160 billion. Right. That's our, you know. That's your number that's out there. A lot of people take issue with it and say, well, you know, taxpayers' expenses such as paid leave, that's $135 billion that's got to come back. IRS collection may go down as a result of cuts there. We asked, I asked Grock. It said between and $5 and $32 billion is what you've actually saved. You need to ask, the right question to ask is, what is the bit for, a bit for the actions of Doge? Right.

What would the incremental expenditures be in FY26? Yep. Because, for example, we offered, early, we offered severance and early retirement to a lot of government employees. Many of them took us up on that. That severance went all the way through to, September. Yeah. So there's not going to be any savings until October, because the severance goes through September. Understood. Understood. So the delta really is, what is the spending difference

FY25 versus FY26 as a function of Doge's actions? That's how we calculate the number. And we'll see if that number, if that turns out to be true or not. Aren't there more effective ways we ultimately could have gotten at it? I mean, by changing the retirement age or really going after some other parts of the budget? We've tried to go after every part of the budget. That it's just some parts more boring than others. You're about efficiency. I mean, that would take an act of Congress, obviously,

to really make changes. Yeah. Significance I'm talking about. First of all, so I think the, in our opinion, we've created $160 billion Delta, FY 25 to FY26, very significant. That's 16% of the way towards a trillion in five months.

And in order to make progress, we need the consent, obviously, of the, not just the executive branch, but also the legislative branch and the judicial branch. So if we, you know, and we are advisors, we're not kings here. I get it. So why are you attacking this, given that we've made so much progress? You mean the way, not me. Okay. Not me. I'm not attacking. I'm just asking questions. In fact, I want to ask a lot more about Tesla. I'm told you have a call at 130. I don't know if you'll be able to come back or but let me I'm going to be able to come back. Let me let me let me well that would be great. Because I do want to talk about Tesla. I mean I was talking about brand damage and what you're seeing in the market. You did an interview earlier this morning where you seem to indicate you're starting to see a rebound. Yes. You know, automotive revenue was down 20% last quarter. I think 50,000 fewer units were sold in the Q1 versus Q1. one a year ago, what is giving you confidence in the automotive business, or is it all about

robo-taxies, as you've been saying, and people can't quite see them behind me, the robots as well? Well, really, the only things that matter in the long-term are autonomy and optimists. Those overwhelmingly dominate the future of financial success to the company. As for Q1, we had a global factory changeover for the Model Y. So there's a new version of the Model Y that came out, which required a factory shutdown across the world. Model Y is the number one selling car of any kind on earth.

Number one in the world. I watched your presentation during your last, right? Right here, I think, during your last turning. Right. It's number one selling car in the world. So, you know, we can't make cars if the factories are retooling. So we, and the right time to retool is the first quarter of the first quarter. the first quarter since generally that's when the least demand occurs. But we've seen us

a major rebound in demand at this point. I feel comfortable with it. You have seen a major rebound in demand. You really believe you have seen that. Yeah, absolutely. I mean, look, for most people, I mean, when you buy a product, I mean, how much do you care about the political views of the CEO or do you even know what they are? No, you don't, but you've made it, you know, frustratingly, Elon, I know you have a 130 call. We promise to get you out in time for it. I hope you'll come. back perhaps if you can afterwards i'm happy to wait here and sit and talk to you some more but i want to let you go because i know that's an important call all right sounds good thank you for taking this

time i hope we get to talk some more on the other side uh about this very issue uh Elon Musk uh obviously joining us hosting us here uh at the gig of factory and perhaps he'll come back as well in a little bit but uh i will end it there for now uh Kelly back to you we're happy to just take the live shot Elon you can put it on speaker and we'll just listen in i don't i see no problem With that. Well, real news. Yeah, that was our David Faber sitting down live, of course, with the Tesla CEO. By the way, if you missed any part of that conversation, we will air it in full at 7 p.m. Eastern right here on CMC.

But, Brian, let's recap some key takeaways, shall we? What jumped out to you? A thousand robotaxis very soon. This optimism that this robotaxies, something we'll be talking about for a long, long time, is actually going to occur. I think the question I posted to Elon Musk's own X, formally known as Twitter, another Musk property is whether or not people would do it. That's a different issue. But Musk, very bullish on the possibility or the reality that this will happen. What about you? Well, I would agree. I mean, I think that this is now becoming the prime time discussion.

It's no longer a question of down the road someday, but really a question of when is this going to be in everybody's neighborhood. Let's bring in our all-star panel for more on this as well. We have Phil LeBow, Steve Kovac, and Aiman Javvers, all standing by. So many different angles here to hit on. Phil, why don't you kick it all? off. Well, I'll start with Robotexie. I'll pick up on what you guys said. Look, he gave us a little more, a little more detailed, but not a lot. This was not a whole lot different than a earnings call for Tesla. And in the last earnings call, he said largely what he said to David Faber, which is, we're going to start small, at least in the first week, and then we will ramp from there. Now, he did give a little more color in terms of when they might have, let's say, over a thousand,

and then from there, 100,000s, and maybe, a million vehicles, Tesla's. The key being here, Tesla's, not part of the Robotaxi Network, but Tesla's overall, a million on the road that have full self-driving technology, autonomous full self-driving technology capability. And they expect that by the end of next year. I would say that's the most newsworthy of the comments relative to Tesla. And look, he said it at the end, guys, the future of Tesla is about autonomy,

and it's about Robotaxy, if you will. then from there where this company goes in terms of leveraging those strengths and growing from there. The traditional business, any analyst will tell you, the traditional auto business is not going to be driving the future of Tesla. Nobody has thought that for a long time. Steve, you can jump in here. Of course, on a personal level, he was also asked about whether, you know, the positives and negatives of his time spent in Washington and that kind of thing. And to Brian's point, we shouldn't forget, this is one element of Musk's very large empire. And he has from SpaceX, he talked about that this morning, trying to figure out kind of the next leg of reusable rockets and so forth.

So, but again, today the focus largely on Robotaxy or Cybercab, which is coming, you know, maybe next year. Yeah, that's right, Kelly. Another thing that kind of stuck out to me, let's just stay on the Robotaxy bit for a second here. He also said there's going to be human supervision, at least at first. This was kind of a question. I know Phil might correct me if I'm wrong here. question going into this launch in Austin. Of course, it's just going to be a small number of vehicles, but those small number of vehicles are going to have a human and some remote location

sort of monitoring things, making sure everything is okay. They're going to be geo-fenced into the Austin area alone. This is not the same experience, Kelly, you're going to get if you take a Waymo. I've taken Waymo a number of times on my trips I take out to San Francisco, and it works just like Uber. You have an app, you open it up, the car comes, it parks right in front of you, it unlocks as you approach it. It doesn't sound like Tesla is quite there yet. And in fact, it does, it sounds like at least at first is going to have those humans watching it. And then we also get into the debate as we talk about Waymo of the different technologies,

these two competing technologies. This is really fascinating because we're going to get a real-life test here of what that, if Elon Musk is right or not, whether this idea that you have cameras that can just interpret the images through this neuro processing that he's talking about. using artificial intelligence or the Google slash Waymo approach where they have LIDARs everywhere that can see through, you know, certain weather conditions that maybe cameras can't and things of that nature. Yeah, as we posted the video, the Waymo trip totally understood.

Different thing, I think, with you own a car and your car, your sleeping, goes out and makes money. Amon, go to the government side. One thing that stuck out to me, and you tell me what stuck out to you, was Musk saying it was, quote, ridiculous to assume that there'd be any real deficit savings this early. It's like they made some cuts, and Musk was sort of alluding to the fact that people wanted the cuts to show some fruit right away. He was saying that was ridiculous.

What's the D.C. take? Yeah, well, look, Elon Musk had suggested he could relatively easily find a trillion dollars or more in savings. And, you know, he came up against the reality of Washington, D.C. when he was here for a few months, realizing that sort of the permanent bureaucracy of Washington is a very difficult thing to move. He was proud of the cuts he was able to make and insisted that once that September deadline passes, Brian, then they will get some savings because all those government employees who decided to take the buyout are getting paid through September. And then after that,

savings will begin to accrue. But I want to go back to the stock chart of Tesla. We had up just a short time ago. And I'd love to see a one-hour stock chart of Tesla because it looks to me like Tesla's shares went up during the first part of that interview. And then, you know, down toward the second part of that interview after 2 p.m. on the East Coast. And I think, you know, if you go back and map the questions as that stock price was going up and stock price was going down, the questions that David began with were all about Tesla and the business and what's coming next. The questions toward the back half of that interview were all about Doge politics and whether or not Elon Musk should be accused of being a Nazi, which he, you know,

denied vociferously and said this is liberal media propaganda, basically. But the market seems to be reacting in a way where if he's talking about the business, he's talking about the future, he's talking about technology and being a visionary, they like that. And if he's talking about politics in Washington and Doge, they don't necessarily like that. I'd love to see that stock chart broken down minute by minute and then overlay the questions on top of that. We'll get the research team crack on. We'll get right on that, Aiman.

We'll just jump right into that. The stock, by the way, when the interview began, was up $2.74 percent or $9.83. cents. So to Amon's point, stock right now is slightly below where it was. It did do this because I was watching it, Amon, we're sort of trained. This is how we think here at CNBC, like sort of a doctor looking at the EKG. We're looking at that spike after two and then the decline, right? I mean, I think the up to your point, I think, Phil jump in. I think the optimism of the robotax, the idea, just the idea that you're going to sell more cars, because if I'm a car buyer, my idea is this. I say, well, it's, you know, whatever, 600 bucks a month.

But I can offset some of that if we allow the car to go in the middle of the night and drive people around like a Waymo-ish-type car. I can recoup some of that money. And I think the bullishness, Phil, right, that this idea that this self-driving slash robotaxies slash cyber cab will push car sales up, drove the stock price up a little bit. And in Amon's point, you kind of get into the political stuff. and then it just becomes sort of a back and forth. Yeah, I think the optimism overall pushed the stock up.

Look, I think we're a long ways from the days of you or anyone else going out, buying a Tesla and saying, you know what, honey, tonight from 7 to 10 o'clock while we're watching TV, our car is going to be out there giving people rides. Could that happen someday? Absolutely. On paper, that is a possibility. But we're a long ways, Brian, from that actually happening. And so the question becomes on the optimism regarding full self-driving technology, A, how quickly does the robotaxy take off is the cyber cab on time?

Elon Musk has a track record of saying, we've got lofty expectations on this date never happens. So those two things are questions that are out there for investors. And there's no doubt that the optimism that Tesla shareholders have for this technology, they remain ridiculously bullish, Brian. You cannot tell a Tesla shareholder that there may be some questions regarding full self-driving technology. They are in it 100%. And that's why the stock, you know, it has a floor in there and it continues to move higher as that optimism about full self-driving technology and robotaxies. You know, we start to see that become a reality in June, at least on a small basis in Austin. Right. And whether it's a leader or just a reflection of what's going on with the market, we are seeing stocks broadly at session low.

The Dow is down about 228 points right now. The NASDAQ's down about 8 tenths of a percent. So it's not just Tesla, or you could argue, if Tesla is selling off to some small extent as this goes on, it's being reflected across the market. Well, also we got to realize that the interview may not be over. I mean, David Faber, and the way that only David Faber can said basically, I'm going to sit here. Will you come back and must said, I might, or I think. I think I will. He didn't say no.

Correct. So right now, David and Kerry, his producer and our camera crew, I think, are sitting there. Potentially Musk will come back and the interview could continue. Which would be maybe great from a shareholder point of view. It would be great from our point of view. Guys, thank you all. Really appreciate it. Phil LeBoe, Steve Kovac and Amon Javers. In an interview that, again, may not be over. And some of the headlines there are crossing. And as we noted, there is a planned special tonight. Indeed, 7 p.m. 7 p.

It's not markets in turmoil. No, it's not Tesla in turmoil. It's not Musk. Not this time. All right. I believe we're going to break right now. Is that true? All right, we're going to go.

There's the break. There's the promo graphic, as we call it, for the interview. Tonight, a special Elon Musk, Tesla CEO interview. All right. We are not done here on Power Lunch till the come. Google's existential moment. The company dominated, search, but is AI.

going to take a sort of a hatchet to that business. Dear Dr. Robosa is at Google, and she'll join us coming up. Welcome back to Power Lunch. The other big story this hour is Google's annual I.O. developer conference, and it also seems to be moving the stock, where CEO Sunda Pachai delivered his keynote address, showed off some new AI capabilities and features. Let's get a recap from Dear Jerjabosa.

Deirdo, what did we learn? Hey, Kelly, well, the keynote is still going. Shares, they did pop at the top of it more than an hour ago now, But then they move lower by as much as 2% as Google hasn't really delivered on expectations. Sure, there have been impressive demos, some lives, some taped. There's been developer tools that are getting a lot of applause from the audience, but there hasn't been a killer app yet for the consumer. Instead, we've got more of what we've already been promised in the age of AI,

agents, personal context, productivity hacks. Now, nearly 45 minutes into the keynote, Sunder Pichai did get into AI mode, and this is Google's way of bringing AI into search, without breaking what makes it so profitable. He said that it has been one of the most successful launches for search over the last decade, and it's leading to more engagement. Now, as of today, it will show up as a tab right on the search page for everyone in the U.S. So this is essentially bringing AI to the masses, which has always been Google's advantage.

But the question is whether Google can monetize this as effectively as it has search. I'm going to be sitting down with Liz Reed, the head of search later this hour. actually in just about 10 minutes, Kelly, and I'm going to ask her. And by the way, I know as we just heard from Elon Musk on Tesla's Robotaxy debut, Waymo is here too, and I'm sitting down with the co-CEO in a few hours. I will certainly ask her to respond to Tesla's strategy and how Waymo can compete. Hey, and Dear Job, Queen of Waymo, can I ask you a question out there in San Francisco? And full self-driving Tesla, too, ask her about it.

Well, I will because I want to make clear, and somebody brought this up, on Twitter, which I think is an important point. I've been in full self-driving many times. I just didn't talk about it on TV with friends. But Waymo also uses humans to monitor, right? Musk was talking about humans monitoring this sort of robotaxy idea. Waymo has humans as well. Do they not?

They may not be in the car, but I can assure you in that video I posted, I was riding in Waymo's a couple of times out in Los Angeles two weeks ago. There are cameras everywhere, and I am sure that humans are monitoring. me the entire time. Yeah. There are, there's these sort of back offices where you have humans who are able to sort of pilot into the cars, which would be true across Waymo. It was true across Cruz. It'll be true across Tesla. If they get stuck, they're able to sort of move the vehicles out of the way. But very different here, right? I mean, when you talk about the Tesla, full self-driving, you still have a safety driver in the seat. As you know, Brian, because you've taken Waymos,

there's nobody actually there. So someone has to remote into the car. I'm assuming it will work the same way with Tesla, though it's interesting because the strategies are very different, right? One relies on LIDAR and lots of different readers and city-by-city sort of expansion, that's Waymo, whereas Tesla can basically flip a switch, ideally in the future, to turn any kind of Tesla into a Robotaxi.

So very interesting strategies, but Kelly's right. I take Waymo's all the time, I use FSD as well, both incredibly impressive products, but very, very different points right now. I still want a comparison trip. Let's do it. I did a video in 2021 driving an EV from Vegas to San Francisco. Let's redo the trip.

We'll do FSD. I'm happy to do it. You should do it. You go out there. You get one of them. We'll do a road trip. All three of us. It'll be a race.

Yeah. And I'll be the human monitor. It's a race. I will win. That's what I do. Take it on, dear. Take it on. Take it on.

Take him on. Let's stay on Google with our next guest. believes that even though AI is disrupting their core search model, those concerns are overblown. Evercore ISI's head of internet research, Mark Mahaney, is with us. Alphabet is his number one large cap long. Mark, a little bit of disappointment with the announcements here. I don't know if there's anything ground, earth shattering, groundbreaking, but you got all of these nice little data points about where search is now and where it's going. Actually, one of my favorite data points was the 50x increase in AI tokens over the last year. It's just a reminder of how dramatically growing, accelerating is

the growth in AI applications kind of across the board. You got a little bit of an update that we're now at 400 million Gemini users versus 350 million. I think it was about a month and a half ago. And then, yeah, you've got more AI functionality being embedded in search, and there was a small little data point. And I'm not sure it was well stated. I had to double listen to it to make sure I got it right. But I think they were saying that AI overviews is seeing a 10% growth in query growth. In other words, people who use AI overview are growing their queries 10%. And I think AI overview right now is a pretty small percentage of overall Google search queries. But what it tells you is, yeah, it's a more powerful search product.

It's more, it's more, I think they use the term, it's more personalized, it's more intelligent, and it's more agentic, whatever. It just makes it a better search product. You create, you improve the search product. People are going to use it more. And I think that's one of the reasons why I think the death of search at Google has been greatly exaggerated, overstated. I think they're improving the product. People are going to continue to search with Google. I don't think you're going to see a dramatic share shift away from Google if they continue to innovate the way that they have the last year and what they're showing today. Search was up 13% in the first quarter. Operating margins were to 34%, which was their highest, as you pointed out, in 12 years. I mean, this is just extraordinary. So if they add more AI functionality to the main page, is that going to push the ads down? It could. It will also make the ads more relevant. Look, the name of the game is to show the most ads. The name of the game is to show the most effective ads. From a user's perspective, like I get the information that I want, but also from an advertiser's perspective, which is I want the, I want that lead that I'm paying to click for. I want that to convert really well. And what Google is using AI to do, it's not too dissimilar from what meta is doing, is using AI to better capture intent, so to better qualify the lead. And it's an auction market. If the lead is more qualified, if it's, converts better, marketers will bid up for it. So my guess is we've had, I think it's 11 to 15% revenue growth out of search for Google for the last seven quarters. I think there's a decent shot. They do it again for the next seven quarters. I think the growth in search revenue is much more

sustainable than market things. If I'm right about that, and they keep showing this for the next three or four quarters, I think the stock re-rates. And by the way, then there's the rest of Google, which is YouTube, Cloud, and Waymo. And I think these, if you put all those together, are just dramatically worth more than where the stock is now. That's why it's our number one pick. What would you say is the breakdown, you know, the share price right now? How much of that is Waymo? I think Waymo's probably worth at least $100 billion, and we're doing what, a $2 billion market cap off the top of my head. So that's still a pretty small percentage. And it's not going to be the majority of the value of it. And if some of the statements that Musk has made about the value

of Robotaxis is correct, I don't see why Waymo wouldn't fully participate in that. And I think the market is describing a much bigger value than just $100 billion to Tesla for Robotaxies. So if that's right, and Waymo continues to prove its leadership, that's going to be more value to Google. If the market's 10xing, you know, the Robotaxies value to Tesla's market cap versus. So then if you 10x Waymo, you get to $20 billion. I mean, you're still not really moving the needle. So you're saying basically if you buy Alphabet right now, you're kind of getting the Waymo business for free. Yeah.

And I may have, we may have switched numbers here, Kelly. we may have made a mistake. I don't know if it's you or me, but I said 100 billion for Waymo. So you 10x that. Wow. That's a trillion. That's a trillion dollars. So then is it possible, is it possible that half of Google's market cap right now? Is Waymo if Waymo's being assigned the same multiple as Tesla? Well, I don't think it is. I don't think Google gets the credit for Waymo that Tesla is being given for a product that is yet to be proven out in the market. Now, I'm sure I would bet that Tesla is going to be proven right and Musk is going to be proven right with Robotaxies. I'm just sitting here with Google shares where I think, and I'm in a city

where Waymo's already been proven. So I just, I don't think the market has really glommed onto this fact yet for whatever reason. I understand the reasons there are other overhangs here related to Google. But that's why one of the reasons I think that Google is so attractive here, there's a bunch of value unlocks. Yeah, YouTube at this one, whether it's a trillion dollar business or not, how much of that is within the core model or not. That's super fascinating. And by the way, you cover Lyft and Uber as well. So they're kind of these, They're the partners. You know, Tesla's the one who has it kind of vertically integrated.

I guess you say Waymo to some extent, but Lyft and Uber remain these kind of dancing partners. That's right. That's right. And what they have to prove is that they are critical partners for a robotaxy companies. And it may not be for, it doesn't sound like it's going to be for Tesla, but whether they can do it for others. And a real big statement was that Uber turbocharged Waymo's rollout in. Austin, Texas. And if they can, other AB vendors out there, and I think they're going to be more than just these two, can see, have a turbocharged partner, they'll work with them. And that's why

Uber can work as along. I love that point that maybe they both can win, Mark, because it raises awareness for the technology. A lot of people are now maybe looking or Googling or poking around full self-driving because they've been in a Waymo or vice versa. Very quickly, Google, very, very quickly, Google announced real-time translation in Google Meet. I could talk to you. You could be Estonian. I'm not picking on Estonia. It's a great nation.

It's very beautiful, by the way. But to me, that's a game changer. That's amazing. Yeah, I think it's one of the, I also like this. I think it was called Google Beam, where you can do this 3D interactive video, which would be better than our 2D interaction right now. So this company has paroled out a bunch of products.

I've been less concerned about that. I've been more concerned about how well they monetize them. But I'm not worried about their ability to monetize search. All right. Mark, thanks for joining us. We really appreciate it today. Mark Mahaney with Evercore. Thanks, Kelly. All right.

Up next, heading into this year, many investors to the U.S. or thought the U.S. was a safe bet. But are other countries the better opportunity for you? We'll talk about that with Shri Kumar next. Busy day, but big update quickly. and energy. President Trump, apparently allowing Equinor, which is a Norwegian company to go ahead and build out, finish out Empire Wind, one of the biggest offshore wind farms in America off the coast of New York. Apparently, it comes with a natural gas pipeline deal attached to it from New York State. Haven't heard that or confirmed that with the governor yet, but it could be a trade.

More Nat gas pipeline for the offshore wind. By the way, Equinor also owns part of the Marcellus Jail. So if it is natural gas, Kelly, they may win going both ways. But for now, a win. for wind off the coast of New York. Fascinating about face as well. Let's turn down to the markets, which are near session lows, and Sri Kumar is with us. He's the president of Sri Kumar Global Strategies. I don't think it's an Elon Musk sell off street

that's taking us a leg lower here, but we are breaking a wind streak and wondering if we're going to be able to keep sustaining the sharp rally from the tariff lows. Unless the tariff, there is further back off and a climb down by President Trump, I don't think the rally can keep up. if you keep the tariff levels, Kelly, where they have been after Liberation Day,

that is just going to put a killer on equities and the bond market. I've been looking for a stagflation. What prevents that from happening is that again essentially saying that's not going to happen, there's going to be a reduction in tariff levels compared with what was threatened, and then you indeed can continue with it. So it's all a question. It is staying with politics in Washington and how it's going to be. going to be played. I made a survey last December on Twitter X. What's the better investment?

S&P 500, Dax, China, or I think it was crypto. Nobody picked Germany. Nobody. I wrote about Germany a year ago. Germany's kicking our, what's the German word for tush? I don't know. But the German, why has Germany and other parts of Europe done so well this year? You make, but you may not have the German word, but you made the message very clear, Brian. What is happening is think about where Germany is coming from. They had political uncertainty. They had the new German chancellor who could not be elected in the first vote. But now he is. Friedrich Merse is in fact on the job. And they are going to spend close to one trillion euros in both defense and infrastructure. That is going to be a huge stimulus not only for Germany, but because of Germany's size. That will be a huge stimulus. That will

trillion euros is going to be very big for the European Union as a whole. So that's where you get the optimism on Germany coming up because you're coming up five years of stagnation. Now you're looking at a turnaround in the situation. And so you're more bullish outside of the U.S. than on. So do you think there's something to the whole Sell America trade? There's a big split on whether that was an overblown fear or not, especially given the rebound lately. The sell America trend, Kelly, I think is very much still in play because the tariffs are at much higher level than they were before April 2nd, first. And then you have all the uncertainty that is continuing with economic policy, what are they going to do about the fiscal deficit, which again, as Brian said earlier in the program, it's about 7% of GDP. I learned at the beginning of my career in the early 1980s, it should not be more than 50% of GDP.

GDP, we are at about 140%. We had this very strange theory that if you are issuing your key currency, you can do whatever you want with the deficit. Remember, those people are not heard from anymore because that's not true. Even a key currency country has to be careful. Otherwise, you're going to have the bond yield shoot up, and that is going to put a crimp on whatever you're trying to. Quickly, what's the biggest risk in America right now? The big risk that I see is that the bond yields increase much higher than expected, and they affect essentially all forms of investment.

You cannot go to bonds for your protection. You have stagflation, and I lived through the stagflation as a young economist at that time, and you can say that it was not a very pleasant situation when you have high inflation plus recession both at the same time. You don't know where to hide. that would be the biggest risk. Some people might want to buy it here. Go, you know, four and a half percent on the tens, five on the 30s.

You know, maybe American households will step in. Berkshire doesn't mind owning a bunch of T bills. They are. T bills are different. Yeah, it's shorter. So I'm talking about not taking duration risk on the fixed income side. I'm saying three months, six month, one-year bills are great. That's where you want to hide.

Gold would be another one. I see further upset potential on gold. Sri, thank you. James. Shre Kumar. Jumar Global Strategies. What an hour it's been. Woo. Maybe Elon will come back.

Thanks for watching. Closing bell starts now.