The most simplified breakdown of the SpaceX IPO on the internet

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All right, we are talking SpaceX IPO, the biggest IPO of all time, and there's a lot of smart analysis out there.

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This ain't that.

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Sam, what did you call it? The two guys in a truck version of this? What did you say? Two idiots and an S1.

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So this is for, there's going to be people who are smarter, wealthier, more technical than us that are explaining SpaceX, but we promise to be the most relatable analysis you're going to get. Because I wanted to nerd out on this myself, I was wondering, should I be buying this IPO? Should I be buying this stock?

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And in order to do that, I was thinking, okay, let me sit down for a couple hours and just try to understand what even is this business? How does it work? Is this massively overrated? Is it underrated? How should I think about this? What do they even do? And so that's where I spent some time. Sam was picking through the S1, trying to find some of the more interesting, quirky, people aren't talking about this, but check this out, styled nuggets. So that's what we're going to try to do in the next hour or so. I'll just play the character. It's all acting, but what would you say SpaceX does?

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Okay, so SpaceX, what do they do? SpaceX builds rockets. I think that's the primary thing that they do. They build rockets, ideally rapidly reusable rockets, and they can take stuff into space. Now, why do you want to take stuff into space? Well, one version of taking stuff into space and the origin of the company is let's take man to Mars. So how do we become multi-planetary as a species? That was the original mission, still a part of the mission. [SPEAKER_00] And I guess the origin of that was that Elon, after he sold PayPal, he made a few hundred million dollars, $200 million or so.

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[SPEAKER_01] And he was interested and excited about when NASA was going to go to Mars. [SPEAKER_01] Oh, I wonder where the Mars mission is at for NASA.

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And he goes on the website, he looks it up, sees nothing about a Mars mission. He's like, wait, we went to the moon in whatever, 1969. We have nothing planned to go past that? Like he's planning a vacation. He's like, hey, so I have some free time. Let's see if we can take the kids to Florida and watch a rocket take off. How cool would that be? Exactly. And so he was looking at that. Okay, it's not happening. So then he thought, oh man, going into space, going to the moon. That's a very inspiring thing. What if we funded a mission to take, I think it was a plant. It's a little succulent or something into space.

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[SPEAKER_00] And it'll let's take life to Mars. Life technically speaking, because it's a plant. [SPEAKER_00] And he thought, oh, that'll just generate some excitement, some buzz. [SPEAKER_00] It'll kickstart more enthusiasm around space. And that was the original idea. He goes to Russia. He tries to buy rockets from the guys in Russia, an old ICBM missile, basically. And they laugh at him. They spit in his face.

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[SPEAKER_01] He realizes, oh shit, after two trips to Russia, this ain't going to work. [SPEAKER_01] And any good entrepreneur does, doesn't take no for an answer. [SPEAKER_01] Any stubborn genius does, he decides, I guess I'll build my own. [SPEAKER_01] He took that personally.

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Dude, when I was a kid during Fourth of July or some holiday, we would drive over the river to go to Illinois because they sold bottle rockets there and they didn't sell them in Missouri. Elon and I are basically the same thing. Same time. Just if he is 200 million times richer and 200 IQ points higher, but very similar. But I relate. Yeah. If you have SpaceX. So do you know their business model? [SPEAKER_00] What do they actually do? [SPEAKER_00] When I was reading through the S1, one of my big revelations was they do so much stuff. [SPEAKER_00] And frankly, I don't entirely know how it all contributes to the same thing.

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[SPEAKER_00] But I do know that the main reason why he started was that reusable rockets is the best way to make going to space happen because you can make things cheaper. [SPEAKER_00] So they, yes, that's correct. [SPEAKER_00] So they have three core components here. Or I should say four. So they have launches. They have Starlink. [SPEAKER_00] They have X, the artist formerly known as Twitter. [SPEAKER_00] And then they have XAI. [SPEAKER_00] And those four are the four components of what SpaceX currently does with some new things coming online.

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[SPEAKER_00] Like they have something called the TerraFab where he's building the largest chip factory in the world.

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[SPEAKER_01] So that's TBD. [SPEAKER_01] What are the chips? What are the chips going to be used for? [SPEAKER_01] Their own rockets? Their own AI. [SPEAKER_01] So basically, he's got XAI, which is his AI company. [SPEAKER_01] And TerraFab is basically his way of getting ahead of what he believes is the chip bottleneck in the world, which is there needs to be more chip production, ideally in the United States. [SPEAKER_01] So again, if the current manufacturers of chips are already booked out five, six years in advance, already at capacity, and the world needs more chips for AI, we'll go ahead and build the largest chip factory in the world, the fab.

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[SPEAKER_01] Sarah and my wife and I, we took a road trip and we stayed at a motel and they only had rooms with two twin beds at the Motel 8. And she was sad.

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She was like, I want to sleep in the same bed as you. It's so weird.

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And so I just got rid of the middle drawer and I pushed the two twin size beds together. And I said, we don't need a king size bed. We have a super bed.

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[SPEAKER_01] And that is what Elon has done with this company. [SPEAKER_01] You know, it's all of these. He just made a super bed. Except he kind of put one of the, the little, what's the little footrest thing called? That's Twitter. He's like, yeah, it'll just be here at the bottom. [SPEAKER_01] It's so weird.

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And so I just got rid of the middle drawer and I pushed the two twin size beds together. And I said, we don't need a king size bed. We have a super bed. And that is what Elon has done with this company. It's all of these. He just made a super bed. [SPEAKER_00] Except he put one of the, you know, what's the little footrest thing called? [SPEAKER_00] That's like Twitter. [SPEAKER_00] He's like, yeah, it'll just be here at the bottom. [SPEAKER_00] Because the only downside when you look at the analysis of this thing is that Twitter revenue is half of what it was when he bought it.

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[SPEAKER_00] So that one hasn't really worked out, but he rolled it together with all this other great stuff so that the investors did well, even though that business didn't do so hot. [SPEAKER_00] Okay. [SPEAKER_00] So he has a super company.

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Let's hear.

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He has a super company. The company's going public right now. It's the largest IPO in history. I believe it's going public at $1.75 trillion, which is very polarizing because you have on one side, people who are rational, logical creatures who look at this and say, wow, so it's a hundred times revenue. That's pretty insane. What are we buying here exactly? [SPEAKER_00] And on the other side, you have the cult of Elon and you have people who are bullish on the future of technology who just believe that in Elon, we trust. [SPEAKER_00] It's not about the price to earnings ratios. It's not about price to sales.

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[SPEAKER_01] It's about the price to Elon ratio. [SPEAKER_01] And if it's an Elon company, you're going to have 10 times the price you would probably otherwise have in a company. [SPEAKER_01] And so it's a very interesting company that's going public because it's so huge. [SPEAKER_01] And you have people who are so passionate on both sides, like a sports team or like a religion. [SPEAKER_01] And I guess the idea here is, can we try to understand what's actually going on and maybe come to our own conclusions? [SPEAKER_01] So just to put this in context, the word trillion has been thrown around a lot. [SPEAKER_01] Anthropic is about to go public or something like that.

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[SPEAKER_01] It's worth around a trillion or 900 billion. [SPEAKER_01] Same with OpenAI. [SPEAKER_01] The word trillion is being thrown around a lot. [SPEAKER_01] And I want to put this into context because a trillion is really, really hard to understand.

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A billion is hard to understand. A million, a lot of people can understand that. So a million, if it were seconds, a million is 11.5 days. A hundred million, which is an astronomical number. Let's say if you have a hundred million dollars, if you have a hundred million dollar company, that's a really big company. [SPEAKER_00] That's 3.2 years. [SPEAKER_00] If a hundred million seconds, a trillion is 32,000 years. [SPEAKER_00] Isn't that incredible?

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It's hard to fathom how large a trillion is. That's insane. And when this IPO happens, Elon will be the world's first trillionaire on paper, at least.

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[SPEAKER_00] And we're talking two trillion, right? [SPEAKER_00] So that's 60,000 years, if it were seconds. [SPEAKER_00] That's a lot. [SPEAKER_00] That's so large. [SPEAKER_00] So, okay. [SPEAKER_00] So let's explain a little about the company. [SPEAKER_00] So, hey, I want to tell you about something pretty cool. [SPEAKER_00] We have a database of all of the unsexy business ideas that have been discussed on this podcast. [SPEAKER_00] So hundreds of episodes, the team at HubSpot went through. They pulled out all the unsexy ideas. So not the super high-tech ones, but the simple, relatable, interesting, profitable ideas that we have brainstormed.

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[SPEAKER_00] And they're all available for download for free. [SPEAKER_00] Just click the link in the description below. [SPEAKER_00] Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. [SPEAKER_00] Back to the show. On the different dimensions that I mentioned, launches, they dominate. They're the Google search of launching rockets. They launch something like 80 to 85 percent of all the payload that goes into space goes through SpaceX. There might be a second place technically, but the gap is so large. And so they dominate the launch category.

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[SPEAKER_01] Now, what do they launch? [SPEAKER_01] They take satellites up into space. [SPEAKER_01] They take satellites for the government. [SPEAKER_01] But they also, I think about 40 percent of their launches are just for their own satellites for this product called Starlink.

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[SPEAKER_01] So if you don't know what Starlink is, Starlink is basically internet service. Specifically, it's really great at giving you internet in places that have poor internet. [SPEAKER_01] So rural areas, remote areas, countries where the infrastructure gets damaged or blocked during wars. [SPEAKER_01] Starlink basically gives you internet anywhere. [SPEAKER_01] It's great for airplanes. [SPEAKER_01] It's great for boats. [SPEAKER_01] Anywhere you can have internet that's traditionally quite difficult to get. [SPEAKER_01] And this Starlink business is doing great. [SPEAKER_01] So it is basically up, it's quadrupled in the last two years.

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[SPEAKER_01] They have 10 million paying subscribers to Starlink internet. [SPEAKER_01] It makes $11 billion a year in revenue. [SPEAKER_01] It's 40 percent EBITDA margins. [SPEAKER_01] It's recurring revenue.

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So the Starlink business has all of the wonderful characteristics of a business. There's no competitors.

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[SPEAKER_01] They have an extreme cost advantage. [SPEAKER_01] It's recurring revenue. [SPEAKER_01] It's extremely high margin. [SPEAKER_01] And it's a product that everybody on earth essentially needs is the internet.

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And they specifically solve the problem in rural areas. So Starlink is very, very interesting as the cash cow of this business. Which is new. It's only four years old. Only four years old. And there's a crazy story about how the Starlink team worked in Seattle and the project was going nowhere. So he's getting status updates and he gets really frustrated one day. And then he goes, you ever seen that episode of Entourage where Ari Gold walks into the office with a paintball gun and just starts blasting people that he's laying off? That's basically what they did to the Starlink project.

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So Starlink is very, very interesting. That's the cash cow of this business, which is new. It's only about four years old, I think. And there's a crazy story about how the Starlink team worked in Seattle and the project was going nowhere. So he's getting status updates and gets really frustrated one day. And then he goes, "You ever seen that episode of Entourage where Ari Gold walks into the office with a paintball gun and just starts blasting people that he's laying off?" That's what they did to the Starlink project. They went there and were like, "What the hell is going on?" Nuked everybody. Everybody restarted from scratch. And then it now is one of the greatest businesses in the world right now. The Starlink business unit inside of SpaceX is pretty straightforward.

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So you might think, well, how big is this rural internet thing? In the US, there's probably tens of millions of people who will be subscribers to this, maybe another 30, 40, 50 million on top of the 10 million that they already have. But then you have all around the world, there's huge areas. Fifty percent of the earth has poor internet coverage. So we're talking about parts of Africa and India. Now, the problem is those people don't have a lot of money. So they're not paying the same kind of thousand bucks a year that people in the US are paying for Starlink. So there's a question about what that's going to be worth.

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[SPEAKER_00] But then they have this other thing called direct to cell. You know about this?

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So direct to cell is basically, if you've been driving and you think, "Oh, I just hit a dead zone." Maybe you're driving on a bridge or maybe there's one area on your route to work that always has poor service. Well, they basically can now do Starlink from the satellite direct to your cell phone. You don't need the little satellite dish like you need for the home internet service. It just goes straight to your phone. So they partner with T-Mobile, for example. And in areas where you have poor reception, you'll still be able to send text messages, download some data, and make a phone call. And so they're basically looking at whether they launch their own T-Mobile, right? They launch their own Starlink cell phone plan. Or it's a little add-on to every cell phone plan on earth where it's, "Yeah, and for an extra three bucks a month, five bucks a month, ten bucks a month, you have guaranteed coverage everywhere. When you don't have good service, it falls back to satellite service." And so they're like, yeah, that's going to be pretty big because the market for internet services across cell phones and home internet is $2 trillion or something. And by the way, there's no real differentiation between any of these. If you go to T-Mobile or AT&T or Verizon, they're all essentially the same service. Which commercial do you like best?

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[SPEAKER_00] Exactly. Yeah, it's all the same thing. Is Patrick Mahomes your favorite player or do you hate him? That's going to decide who you go with. And so they're the first ones to go into that space with something that's actually a different proposition, which is, "Hey, our service works everywhere. Those don't." And secondly, it can be lower cost because of the way they're doing it in space. They don't have to do ground buildouts of towers. So that's the core business. They got so good at launching rockets that it became cheaper and cheaper.

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[SPEAKER_00] I think they basically brought the cost of taking a kilogram to space down by 50 or 100 times what it was pre-SpaceX. So if it cost $100 before, it now costs $1 or $2. That's how big the cost drop was. And they keep doing that. So wherever they are today, when they have their new rocket, Starship, it's going to be half of what it currently is. So they have a massive cost and volume advantage in launches. That lets them have the satellite business, which lets them have Starlink.

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So that's the business as it is today. Then you say, "Well, what's the next unlock?" And if you look at their investor presentation, it's all about data centers in space. And when you hear this, you think, "What the hell?" You think about a building floating in space. It's hard to fathom. I think we're colonizing the moon or Mars or something. But I also think, is there not enough room here? It's unfathomable. So that's hard to understand. The answer is we have plenty of room. It's hard. It's a little slow to build and expensive to build. And there are some shortages in turbines and things to build. But the real problem is literally just red tape.

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[SPEAKER_00] It is easier to figure out how to launch the heaviest rocket ever and build a data center in space than it is to get Alameda County to approve a data center in your backyard. That is the problem. There is so much regulation and so much anti-data center backlash that the people who have the money, the engineering expertise, and the resources to build can't build in the United States, which is insane.

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Well, you know, I'm a history nerd. One of the reasons the American Revolution happened was when American colonists started taking over what is now America. They started going further and further out West. They started having fights with Native Americans. And the colonists were like, "Hey, England, we need some help." They started going further and further out West. They started having a lot of fights with Native Americans. And the colonists were like, "Hey, England, we need some help."

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[SPEAKER_00] That is, there is so much regulation and so much anti data center backlash that the people who even have the money and the engineering chops and the power and the reserved equipment to be able to build, they can't build in the United States, which is insane. [SPEAKER_00] Well, what's, it's really, so think about this. So I'm a history nerd. So one of the reasons, one of many reasons why the American Revolution happened was when American colony folks, they started taking over what is now America.

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They started going further and further out West. And they started having a lot of fights with Native Americans. And the colonists were like, hey, England, we need some help. You're supposed to be your country. Come protect us. And England's like, dude, it's so far away. It takes us four weeks to get there. And plus, once you're there, it's 3000 miles long.

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[SPEAKER_00] We can't do this. You guys, I know we said that you can go everywhere else, but please, you got to come back in. And George Washington was like, no, this is my land. This is my land. You're not going to tell me what to do with my land. Screw you guys. And that was one of the reasons why there was tension. And it begs the question that when you go the figurative Wild West space, when everyone's doing their own thing, what's going to happen in 50 or 100 years when people are like, okay, now we actually have to rein this in. What are we going to do? Who gets what? And that's actually another thing that's quite challenging to understand. It's like sectioning off the ocean or water or something like that. Like who gets what area of space or Mars or moon?

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[SPEAKER_00] Well, the moon, I think definitely right. Because it's actually a limited land area versus space, which is the biggest thing. I don't know. I don't know enough about this to know what's true. But are there highway routes that satellites take where this is the best? This is the best route. And we can only have so much debris in this.

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[SPEAKER_00] I don't think so. I mean, maybe there's some future state where space travel is so cheap and easy that so many people want in and the demand is so high that now we're running out of space in space. Maybe, but that's not the problems today. The problems of today are, wow, it's really expensive and hard to get permitting to build on land. And so it's such a, I'm going to take my ball and go home or just the men will do anything to avoid therapy type of conclusion. We'll go to space.

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[SPEAKER_00] Well, I guess we'll just go to build it in space then. I don't even want to talk to it. I want so little to do with politics that I would rather build this in space and figure out the engineering. So the big risk of this company right now is two questions. The first is, are they going to be able to build something called Starship?

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It's their big ass rocket, bigger, way bigger than the Falcon 9. And so I think it carries 7 to 10 times more payload than the Falcon 9. And so if Falcon 9 is bringing up what, let's call it 10 satellites out of time, this thing will bring up 70 satellites out of time. And so they haven't yet been able to get Starship to work. They're building it. They're testing it. It's taking years. When they do it, it'll be the most impressive rocket and probably the most impressive feat of engineering in human history. But there's a question of if some people might not believe that they'll ever get Starship to work. That tends to be a foolish bet.

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Yeah. Betting against Elon's technical ability has proven to be the most unprofitable bet you could make. Even if you're right for a year or two, you're eventually wrong. And so one question is, is Starship ever going to happen? And can they make it rapidly reusable so that it can fly? He was talking on a podcast and he was talking about it, yeah, we're going to do 10,000 launches. And the guy was like, so wait, that means you're launching multiple times a day, obviously, right? You're launching 30 times a day. And he's like, yes. And they're like, but you can't even launch one right now. He's like, yes. And they're like, so it's going to be, and he's like, it's an airport. You know how many times a plane takes off a day? And he's like, we are going to launch that many times in a day. It'll be airports. It'll be, we figured out how to make cars reusable, how to make airplanes reusable. We are going to figure out how to make rockets rapidly reusable so you can land, turn it around, launch it again. Land, turn it around, launch it again. Just an airplane lands, they clean out, get your crumbs off the seat. And then they go and 45 minutes later, it's up in the air again. And that's a key part of how air travel became cost effective. They're trying to do the same thing with rockets. And so one bet is, is the Starship thing ever going to happen? And then if so, there's another set of doubt or risk or uncertainty, which is, can you even do data centers in space? This is even going to work. And there's people who argue that one of the reasons you put it in space, it's not just the red tape, it's the cost. So basically one way of thinking about this that Elon talks about is that the entire game is taking energy from the sun and turning those photons, or electrons into tokens for AI. That's the pipeline. That's the world where the world is going is we are going to need an insane amount of AI tokens, whether that's for ChatGPT like things, whether that's for digital employees work that's being done, whether it's for science and medicine, whether it's for robots, we're going to need a ton of AI in the future. It's pretty hard to bet against that. So then the question is, who could be the low cost provider of tokens? And basically, if you look at when you have a satellite in space, it's powered by the sun.

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That's the pipeline. That's where the world is going. We are going to need an insane amount of AI tokens, whether that's for ChatGPT-like things, whether that's for digital employees doing work, whether it's for science and medicine, whether it's for robots. We're going to need a ton of AI in the future. It's pretty hard to bet against that. So then the question is, who could be the low cost provider of tokens? Basically, if you look at when you have a satellite in space, it's powered by the sun.

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You don't need any cooling because space is freezing cold and has a radiative cooling mechanism where as the chips get hot from being used, there's a natural physical mechanism to cool them down. Some people argue against that, but Elon believes it's no problem. And streaming AI tokens from space is going to be far cheaper and more effective than any land build out of data centers and then figuring out how to transmit those. The physics papers address the question: can they build it? And historically, Elon is very good at doing this. He's very good at taking no market risk, meaning if I could make this, you'd want it, right? And it's like, yes.

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Then the only question is, can I make it? And the answer for him has always been yes. And so that's where we're at with this business. This string of letters that we're putting together to make words into sentences—the words coming out of your mouth right now are wild to me. I just learned German yesterday. It's just the fact that language has changed so much that in the last five years it has come to the point where we're now saying we're going to go to space to create AI. Imagine explaining this to someone. There's this old man that I hang out with in my building who's 96 years old.

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Every once in a while, I go down to his room and he tells me where he was when JFK died and he'll tell me cool stories.

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[SPEAKER_01] Just imagine explaining this to him. [SPEAKER_01] It's crazy how fast humans progress. [SPEAKER_01] How old's your daughter?

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She's two? Yeah. [SPEAKER_00] Okay. So you haven't quite reached this point, but my kids ask, how does TV work? [SPEAKER_00] And I'm like, honestly, I have no idea. [SPEAKER_00] And they're like, so wait a minute, this is happening right now somewhere else. [SPEAKER_00] I'm like, yeah, there's a guy with a camera. [SPEAKER_00] How does the camera work? [SPEAKER_00] Couldn't really tell you. But he's got something called a camera. And rather than that gets piped into those towers. There's cables on the road. You see those? There's satellite. And there's Wi-Fi. That's a tough one for me. Bluetooth. It's Wi-Fi, but something that's different there for sure.

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And it's showing up on our TV. And where's the remote? I've been humbled by my kids so many times trying to explain the current stuff that I don't understand. Yeah, I wonder if these analysts who are asking him questions ever just say, yeah, I don't know. There are so many things that boggle my mind about today's technology. So I'm with you that this sounds mind-boggling. That's crazy. But also that someone is audacious enough to keep pushing. Okay, we did that. What about this? What about this? What about this? [SPEAKER_00] And to have that open mind—these are engineering feats, but these are also personality feats.

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[SPEAKER_00] Just like when Joey Chestnut ate 70 hot dogs at the Coney Island hot dog contest when the previous record was 19. [SPEAKER_00] That's what we're dealing with right now. And it's just unfathomable. It really is. [SPEAKER_00] It truly is.

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So anyway, what about Twitter and XAI? [SPEAKER_00] Okay, so that's insane to me. The fact that a rocket company owns Twitter.

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[SPEAKER_00] Yeah. [SPEAKER_00] Yeah. [SPEAKER_00] You know when you invite someone to your party and then they bring that friend? [SPEAKER_00] Yeah. [SPEAKER_00] That's the Twitter problem right now. [SPEAKER_00] And I think it was sold for $250 billion to SpaceX. Is that right? [SPEAKER_00] So I did a lot of my thinking with Claude yesterday for this. [SPEAKER_00] And I had Claude build me my own deck about SpaceX. [SPEAKER_00] Here's one of the things about Twitter. [SPEAKER_00] So Twitter's ad business is 40% the size of old Twitter. So X advertising is at 1.8 billion now. Now it's down 100 million from last year.

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And it's half of what the ad revenue was before he bought it in 2021, five years ago. He added subscriptions and payments. So that's now a billion dollars in ARR. [SPEAKER_00] So the total is 2.8 billion. [SPEAKER_00] And it was 4.5 when he bought it. So the X stuff has not quite worked. He did figure out how to spin it, right? So he figured out, hmm, okay, the X business is not that great.

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[SPEAKER_01] And I can't get the engagement to be as high as WhatsApp or Instagram or TikTok or any of these other apps. [SPEAKER_01] But what it does have is data. [SPEAKER_01] And maybe I can use that data to power Grok. [SPEAKER_01] And then he tried Grok. [SPEAKER_01] Now Grok is falling behind Anthropic and ChatGPT. [SPEAKER_01] So he said, but again, I think one of the great hallmarks of entrepreneurship is failing forward.

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And so maybe in the same way that X failed forward into, oh well, it gave Grok some differentiation. But then Grok hasn't quite kept up with everything else. He used his Grok asset where he's trying to build a ChatGPT Anthropic competitor, even though it's way behind. He built the largest data center for training AI, Colossus. And he's really good at building the machine that builds the machine. So basically, what he's the best at is building factories at this point. So he said, but he, again, I think one of the great hallmarks of entrepreneurship is a failing forward. And so maybe in the same way that X failed forward into, well, it gave Grok some differentiation.

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[SPEAKER_01] But then Grok hasn't quite kept up with everything else. [SPEAKER_01] He used his Grok asset where he's trying to build a ChatGPT Anthropic competitor, even though it's way, way behind. [SPEAKER_01] He built the largest data center for training AI, Colossus. [SPEAKER_01] And he's really good at building the machine that builds the machine. [SPEAKER_01] So he's basically what he's the best at is building factories at this point. [SPEAKER_01] And so Tesla has its own factories and produces enormous amount of cars faster than anyone else, designs and builds. [SPEAKER_01] He's doing it now with the TerraFab. [SPEAKER_01] He does it with the Rockets.

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[SPEAKER_01] He did it with data centers here. [SPEAKER_01] So he built the largest cluster of GPUs, bigger than Google, bigger than Facebook, bigger than anyone. [SPEAKER_01] The problem is he doesn't have enough users. [SPEAKER_01] So he has this, he bought a huge mansion and doesn't have any friends to come over to entertain. [SPEAKER_01] Well, because what does Twitter have? [SPEAKER_01] I think you say 500 million. [SPEAKER_01] That's shockingly, 500 million is still amazing, a niche social media network. [SPEAKER_01] Yeah. [SPEAKER_01] And Grok has 100 million users, whereas ChatGPT has a billion. [SPEAKER_01] So 10 times smaller.

SPEAKER_00

[SPEAKER_01] And so he doesn't have the use of it. [SPEAKER_01] So what did he do? [SPEAKER_01] He just turned it into Airbnb. [SPEAKER_01] He started renting out Colossus to Anthropic and to Google. [SPEAKER_01] And so just in the last two months, they announced two deals that I think are combined worth like $20 billion or more. [SPEAKER_01] A billion dollars a month, so $12 billion a year to use his data center.

SPEAKER_01

[SPEAKER_00] And that's Google. [SPEAKER_00] Google themselves was the best at building data centers.

SPEAKER_00

[SPEAKER_01] And they need to rent from Colossus. [SPEAKER_01] And then same thing with Anthropic, where Anthropic is paying over a billion dollars also a month to rent out. [SPEAKER_01] Now, these are short-term agreements they can cancel with 90 days notice. [SPEAKER_01] So who knows, five years from now, it might just be a temporary stopgap solution. [SPEAKER_01] But again, failing forward, figuring out, okay, are we screwed?

SPEAKER_01

No. What if we did it this way? And then finding a way to survive in advance. Yeah, they basically put this S1 out, I think four or six, I forget when, one or two months ago. And I think it was last week or maybe a Monday. It was almost a quiet amending of the document that says, hey, Google just signed up to spend a million dollars, a billion dollars a month with us to become a customer. And that's insane. That's such a huge number. By the way, I have to think the 9D chess move there was that they knew and they staggered the announcement. Maybe it was truly, oops, forgot to mention this, but I think it would have been smart if they intentionally did that too.

SPEAKER_01

Yeah, it was cool. Do you want to see any of these slides, by the way? Can I just run you through these? [SPEAKER_00] Did you have a sit down with your wife and you're like, okay, so hear me out? [SPEAKER_00] And you showed her every slide? [SPEAKER_00] No, that's you. [SPEAKER_00] I'm doing that with you right now. [SPEAKER_00] I told it to explain it to me like I'm Charlie Munger trying to understand the business. [SPEAKER_00] And it's, okay, Charlie Munger would ask, is it in my circle of competence? How do I lose money here? Show me the incentives. [SPEAKER_00] What's the moat? [SPEAKER_00] Price is what you pay. Value is what you get.

SPEAKER_01

[SPEAKER_00] And so I started to basically break it down. [SPEAKER_00] Starlink is the part that makes money. XAI is the part that burns it. [SPEAKER_00] And the rockets are the railroads in between. You're not buying SpaceX. You're buying three different companies that are stapled together. You have the space launch business, the internet connectivity business, and the AI business. And then, here's the high level numbers. So $18 billion in revenue, losing $2.5 billion. $6.6 of adjusted EBITDA. I'm going to bring that up in a second. Yeah, I think that's wrong. They burned $8 billion of cash last year. This is the Starlink business.

SPEAKER_01

So it grew from 2 million subscribers to 10 million subscribers. But you can see it is starting to slow down. So that's one cause for concern, was that Q1 this year was not high growth. And that the average revenue per paying user as they go into more third world use cases of who needs internet where they have low connectivity. Obviously, they can't charge as much. They dominate the rocket business. 85% of all launches. [SPEAKER_00] 80% of all mass to orbit. [SPEAKER_00] Let's see. Everything is dependent on Starship, which is not a guarantee. And that's the big question.

SPEAKER_01

And then, oh, they also bought Cursor. So they bought Cursor for $60 billion or have an option to buy Cursor for $60 billion. And Cursor, I think, is at $3 or $4 billion in revenue. And so, trying to play catch up in the AI game by merging. Cursor needed to figure out a way to have compute and their own models and a way to survive against Codex and Cloud Code. And so it's this game theory where the bottom players, in Survivor will form an alliance in order to flip the game on its head, basically. Let's see if there's anything else here. Oh, he owns 42% of the company. Do you know this? [SPEAKER_00] Wow. [SPEAKER_00] No. It's amazing.

SPEAKER_01

After 20 years, and you would think rockets are the most capital-intensive business that he's had to raise for, for him to still own 42%, just to put that in perspective, Aaron Levy from Box, which is a folder in the cloud, I think he owned 4% of Box when it went public. And he somehow still owns 42% and has 85% of the voting control.

SPEAKER_00

[SPEAKER_01] It's crazy.

SPEAKER_01

[SPEAKER_00] Yeah, I have some other things about his comp package.

SPEAKER_00

[SPEAKER_01] Oh, he owns 42% of the company. [SPEAKER_01] Do you know this? [SPEAKER_01] Wow. [SPEAKER_01] No. [SPEAKER_01] It's amazing. [SPEAKER_01] After 20 years, and you would think rockets are the most capital-intensive business that he's had to raise for, for him to still own 42%, just to put that in perspective, Aaron Levy from Box, which is cloud, a folder in the cloud, I think he owned 4% of Box when it went public.

SPEAKER_01

And he somehow still owns 42% and has 85% of the voting control. It's crazy. Yeah, I have some other things about his comp package. It's pretty crazy. We can go there. But anyways, AI says Charlie Munger would put it in the too hard pile. It's a wonderful business at a silly price, is the AI Charlie Munger conclusion. And it's a great business. [SPEAKER_00] You can admire it from afar. You didn't need to own it, was the conclusion that he had. It's just logic doesn't particularly matter. I don't think that you can use a traditional way of looking at this. An Elon asset is not a normal company. So it's really hard. It's hard to price this.

SPEAKER_01

It's almost this weird thing where I always thought it was interesting. Whenever you're going through an M&A process, someone will say, I'll buy this company for 15 times earnings. And what I to do is change earnings to the word years. So it's, I'm going to give you 15 years of payment up front. And when you look at this, the present value of a company is the sum of its future cash flows. When you look at this, you're, it's hard to, I don't even know what it is. [SPEAKER_00] Is it 100 years? [SPEAKER_00] Is it hundreds of years? [SPEAKER_00] Is it 50?

SPEAKER_00

I'm not sure. But however the length of it is, at this point, it's so big, likely, that it's, will Elon die or not? I think the crazy thing about this, and even when somebody, why would somebody pay 15 years ahead?

SPEAKER_01

[SPEAKER_00] It's because you're growing. [SPEAKER_00] And so, it's 15 years at the current rate.

SPEAKER_00

But looking at the growth, that might only be six. Might only be four. But your growth rate is dependent on you're making the Elon bet, which is, can he figure it out? But I'm, I don't even know if he exists by the time that you get the sum of your future cash flows on this one. Well, here's what you'd need to believe. You'd need to believe that the Starlink business alone, which is at $11 billion in revenue, is probably going to grow to $30, $40, $50 billion in revenue over the next, let's call it, five years. You'd need to believe that Starship works and that they can take, so they can scale both Starlink as well as the data center.

SPEAKER_00

So you need to believe that Starship works. [SPEAKER_01] You need to believe that data centers in space are going to be a thing. [SPEAKER_01] And with that, you'd have to also, I don't think this is as much of a you need to believe, as in it's not really a leap of faith.

SPEAKER_01

It's more of a realization, which is, Saudi Arabia made trillions of dollars because they owned the oil.

SPEAKER_00

[SPEAKER_01] They were the largest and lowest cost producer of oil and energy, and the world ran on energy. [SPEAKER_01] Well, if you look at the next 20 years, it seems the world is going to run on compute. Every single business, every single consumer, every single robot, every single car, every single appliance is going to have a compute need. And so then there's a question of who's the Saudi Arabia of compute.

SPEAKER_01

And what you would be thinking with, if he goes to, if he's the one who could put data centers in space and data centers in space are going to be giving AI tokens at, whether it's 50% or 200% lower cost than ground-based compute for inference, then he's Saudi Arabia in space. And he's the only one positioned to do that currently. So they have a line item or a section of the S-1 that talks about future business lines. And he actually says that mining asteroids and potentially mining Mars and mining the moon for energy.

SPEAKER_00

[SPEAKER_01] And I guess that potentially means some type of oil or something. [SPEAKER_01] And so they actually have that covered as well.

SPEAKER_01

Yeah. Of course. Naturally. Mineral mining. So let me listen to this. So this is actually a super interesting thing. So listen to what the company's mission is. [SPEAKER_00] The mission is to make life multi-planetary and understand the true nature of the universe and extend the light of consciousness to the stars. [SPEAKER_00] And then it goes on to say that they want to create species level redundancy. [SPEAKER_00] So consciousness isn't tied to one planet and that they don't want humans to have the same fate as dinosaurs. [SPEAKER_00] That's what it says at the top. [SPEAKER_00] That's the mission of the company. [SPEAKER_00] Is that crazy?

SPEAKER_01

[SPEAKER_00] What's the Facebook mission? [SPEAKER_00] Let's just put those side by side. [SPEAKER_00] Dude. [SPEAKER_00] To connect people. [SPEAKER_00] But for 99% of the people, the mission of any business is to take the money in your bank account and to put it into my bank account. [SPEAKER_00] Okay. [SPEAKER_00] So it's really challenging for me to compare this to make life multi-planetary and make sure that we don't have the same fate as dinosaurs. [SPEAKER_00] This just isn't fair. [SPEAKER_00] So that's incredible. [SPEAKER_00] Also, I've met a few doctors, surgeons that have a God complex.

SPEAKER_01

[SPEAKER_00] And in some ways, it's, look, if that's what it took to get you to become the best. [SPEAKER_00] I actually want my heart surgeon or my brain surgeon to have a bit of a God complex, a bit of a savior complex. I don't mind that he's got a bit of a God complex, a bit of a savior complex. [SPEAKER_00] It's okay. [SPEAKER_00] Okay. [SPEAKER_00] That's what it takes for just to be, hey, you're already the richest man on earth. [SPEAKER_00] You want to sleep on the factory floor. [SPEAKER_00] You want to go ahead and build these and put it all on the line again. [SPEAKER_00] It takes something that is irrational to make man want to do that.

SPEAKER_01

[SPEAKER_00] And that could be noble or you could read into it, it's a bit of an insecurity personality defect. No, that's not how, what I'm getting at.

SPEAKER_00

[SPEAKER_01] I don't mind that he's got a bit of a God complex, a bit of a savior complex. It's okay.

SPEAKER_01

[SPEAKER_00] Okay. [SPEAKER_00] That's what it takes for just to be like, hey, you're already the richest man on earth. [SPEAKER_00] You want to sleep on the factory floor. [SPEAKER_00] You want to go ahead and build these and put it all on the line again. [SPEAKER_00] It takes something that is irrational to make man want to do that. [SPEAKER_00] And that could be noble or you could read into it as a bit of an insecurity personality defect. No, that's not how what I'm getting at. I wouldn't say that I'm a huge Elon fanboy, but I think this mission is awesome. I think it's great. I think it's fantastic. I'm not mocking it. I think that it's incredible.

SPEAKER_01

I think it's inspiring. I think it makes it easier to inspire your employees. There's the famous story of someone talking to the janitor who worked at NASA in 1968, the year before we went to the moon. And they said, sir, what do you do here? He goes, I'm helping us get to the moon. [SPEAKER_00] I think that's awesome. [SPEAKER_00] I think the Wall Street Journal had an article on the blue collar workers at SpaceX and how much money they were going to make on this.

SPEAKER_00

And they all seem incredibly inspired. So, no, I'm on board. I think it's awesome. So, look, I don't know if you saw this, but SpaceX IPO is expected to create over 4,000 new millionaires, including some cafeteria workers whose compensation packages included employee stock options. And then this, me and the SpaceX lunch lady, she becomes a millionaire.

SPEAKER_01

[SPEAKER_00] Dude, that's so crazy. [SPEAKER_00] Yeah, I think it's great.

SPEAKER_00

The amount of wealth that's going to be created, I actually wonder, I don't know enough about economics, but with all these new rich people being created with Anthropic, ChatGPT, and SpaceX, I wonder what that's going to do to housing prices. Obviously, San Francisco is insane.

SPEAKER_01

[SPEAKER_00] Have you been seeing anything in San Francisco?

SPEAKER_00

My sister just sold her house, but it was pre the IPO chatter. And she literally didn't put it on the market.

SPEAKER_01

[SPEAKER_00] She bumped into a real estate agent and was, I have somebody who's looking.

SPEAKER_00

The guy walked in, literally, this is not an exaggeration.

SPEAKER_01

He walked in for five minutes without his wife and made an all cash offer on the house at what they were going to list it at. And that was it. [SPEAKER_00] It was done. [SPEAKER_00] He literally never came back and bought the house. [SPEAKER_00] I've never seen anything like it. [SPEAKER_00] It's just crazy. [SPEAKER_00] I wonder what's going to happen, obviously the coastal cities are going to, things are going to change, but I wonder what it means for the rest of the country. What's this say? So, pour one out for Sam Bankman-Fried. He's on the, there's a lot of winners out of this IPO.

SPEAKER_01

He would be one of the losers out of this IPO because he had an investment in SpaceX that would have been worth $15 billion. And his overall portfolio, he had Anthropic, which would be worth $80 billion because he was one of the earliest investors in Anthropic. He had Robinhood, which would be about $5 billion. He had Cursor. He was one of the, I think he was literally the first investor, maybe in the first round at least. And that would be, a $3 billion plus stake. [SPEAKER_00] He's got SpaceX $15 billion, Solana $5 billion.

SPEAKER_00

And his overall portfolio out of what he had, his slush fund that he was inappropriately using, illegally using customer funds to go invest. It'd be $114 billion today.

SPEAKER_01

He'd be seen as one of the greatest investors of all time. Who gets those? Who gets the shares? So they liquidated all these when they did the bankruptcy. So nobody won, actually. The people who bought out of the bankruptcy estate, it's when Tim Draper bought all that Bitcoin. Yeah. At a low price from the US government when they seized the Silk Road Bitcoin. It's whoever bought the bankruptcy assets when they did the liquidation. That's who won. That's insane.

SPEAKER_01

One thing that I want to call out, and I don't have a good explanation for this, but they talked about in the S1 about having, okay, so the way it works is you see this, you see EBITDA, which is earnings before interest, taxes, depreciation, amortization. Then they do this thing called adjusted EBITDA, which in my opinion makes no sense. I guess there's a lot of reasons as to why they do it, but the best way that I could explain it is, every month my wife and I sit down and we look at our budget. And we say, how much did we spend last month? Is that in line with what we predicted? Whatever.

SPEAKER_01

And so that can help us produce future expenses and let us know that we're keeping to our financial plan. Every once in a while, in the first six months of us doing this, we kept saying to ourselves, well, we took this vacation, but that's a one-off. [SPEAKER_00] You know, we took our parents on vacation. [SPEAKER_00] It was to celebrate this thing. [SPEAKER_00] And then in month six of doing this, we're, you know, we just took this other once in a lifetime vacation. [SPEAKER_00] And you know what?

SPEAKER_00

I think we just have to assume that we're going to have these one-off things, gifts, vacations, buying a car.

SPEAKER_01

[SPEAKER_00] So we just got to up the budget and that's what we're going to do. [SPEAKER_00] Adjusted EBITDA is just saying, you know, you had this one-time lawsuit or this one-time thing. [SPEAKER_00] And I think in the case of SpaceX, it's about depreciation, which doesn't exactly make sense. [SPEAKER_00] They're, we're going to have this one-time depreciation. [SPEAKER_00] I think that's what it said. [SPEAKER_00] Plus earnings before interest and depreciation. [SPEAKER_00] I don't understand why you would adjust for it. [SPEAKER_00] It doesn't make sense to me. [SPEAKER_00] Does that seem weird to you? [SPEAKER_00] No, I mean, I think spot on.

SPEAKER_01

[SPEAKER_00] I think Buffett and Munger famously hated EBITDA as a thing. [SPEAKER_00] I think they just called it bullshit earnings.

SPEAKER_00

It's our earnings are this and then our bullshit earnings are this. And especially in a company that's so capital intensive. They're going to have this one-time depreciation. I think that's what it said. Plus earnings before interest and depreciation. I don't understand why you would adjust for that. It doesn't make sense to me. Does that seem weird to you?

SPEAKER_00

I think spot on. I think Buffett and Munger famously hated EBITDA as a thing. I think they just called it bullshit earnings. It's like our earnings are this and then our bullshit earnings are this. And especially in a company that's so capital intensive. I think they had 20 billion of CapEx spend in the last 12 months or something like that. Obviously, depreciation is very, very real. I think for software companies, it could be a little bit different. But this is not a software company. And then the adjustments, you're right. You know, it's like, oh, except for, we adjust back in for stock-based compensation.

SPEAKER_00

[SPEAKER_01] It's like, well, that's how you pay the people to do the work. So why do you keep adding that back in? Is that going away anytime soon? [SPEAKER_01] Not really. For example, it might be the go public costs. Sure, that's an adjustment. But the adjustments tend to be far more favorable than that. I think there were a few other funny things. You know, I think they own $2 billion worth of Bitcoin. And I think some of the adjustments was that Bitcoin price has gone down. Did you see that? [SPEAKER_01] That's what I need, dude. I need my adjusted net worth. It's just adjusted for my stupid ass investments.

SPEAKER_00

[SPEAKER_01] Yeah. And then the funny thing was they did a project where they paid a vendor in shares. And the strike price of the shares was $420. I think it was like $42.20 or something like that. And then I think when they did a 409A valuation for Twitter, it was like I'm screwing up the exact numbers. But I think if it was $42 billion, they made it $42 billion, like $420. And if you do Control-F, $420, it's everywhere. And that's insane. [SPEAKER_01] It's the most try-hard part of Elon. I despise his $420 obsessions. Is there a Hitchhiker's – I've never read Hitchhiker's Guide to the Galaxy. Is there a $420 – is this a weed $420 reference?

SPEAKER_00

It's a weed $420 thing, yeah. Hey, guys, I'm cool too, right? I think in Hitchhiker's Guide, it's 42. That's the number for the universe. But that's not why he's doing $420. [SPEAKER_01] Well, yeah, I wasn't sure. But that's pretty silly. What's this? Shout out to the Ontario Canada Teachers Pension Fund, which in 2019 decided we're going to invest in SpaceX back before SpaceX was obvious. And they're going to make $12 billion this year in the IPO, which more than funds their pension. It's $33,000 per teacher that's in the fund for the 300-something thousand teachers in the pension fund.

SPEAKER_00

[SPEAKER_01] So I think that's pretty cool and a great move by the Ontario Fund, which is hilarious because I'm pretty sure they boycott Elon. But whoops. [SPEAKER_01] Yeah, that's pretty hypocritical. Did you put an appendix on your slideshow with just funny tweets? Because that would be wonderful.

SPEAKER_01

[SPEAKER_00] Yeah. This was manual because Claude doesn't have that sense of humor that I have, so I had to do this work myself. I had to tell you a couple other nuggets that I thought were interesting. Yeah. Did you see who else is on the cap table? No, not really. So I'm always interested with these IPOs, who else is getting rich out of this.

SPEAKER_00

Of course. Dude, when I was watching the Knicks game the other day, I kept pausing. I'm zooming in. I'm like, who's that person? Courtside? Who's that person? Dude, I'm begging for this Courtside app. I just want somebody to take a picture of the entire Courtside seats and tell me who everyone is, what they do, and how they made their money. And I'd like that for every single game. And the schleppier the guy, the more I want to know. Because I would zoom in. I'm like, this guy. Chalamet, move your head. Who is that guy?

SPEAKER_01

[SPEAKER_00] Yeah. It's like, I get why you're famous. You're hot. Who's the guy with the triple chin that's Courtside in New Balances? Yeah. How much waste management does he do? [SPEAKER_00] Yeah. That's all I want to know is who's the schleppiest looking person. Not even the New York ones. When they're playing in San Antonio or Oklahoma City. [SPEAKER_00] Yeah. I'm just like, oh, what is this? Oh, he collects all the used chicken wing bones from restaurants all around the country and turns it into bone broth. That's what this guy does. That's amazing.

SPEAKER_01

[SPEAKER_00] There's a funny video of this guy who looks exactly like you're describing. I think it was maybe Canada. But Drake's sitting at the game. And this guy and Drake are sitting next to each other. He looks like he's six years old. He's got a beer belly. And he's just sitting there. And he looks like he's laughing hilariously. And they put the camera on Drake. [SPEAKER_00] And everyone's cheering. And the guy looks over at Drake. And he goes, are you famous or something? And Drake was like, yeah, I'm kind of famous. And then the meme actually found that guy's identity. And he's significantly wealthier than Drake.

SPEAKER_01

[SPEAKER_00] And this guy and Drake are sitting next to each other. He looks like he's six years old. He's got a beer belly. And he's just sitting there. And he looks like he's laughing hilariously. And they put the camera on Drake.

SPEAKER_00

And everyone's cheering. And the guy looks over at Drake. And he goes, are you famous or something? And Drake was like, yeah, I'm kind of famous. [SPEAKER_00] And then the meme actually found that guy's identity. And he's significantly wealthier than Drake. And he's this big shot who no one knows. And he owns some type of boring business. And it was pretty funny. By the way, that's one of the only cool things you can say to a celebrity. I've actually played this scenario out in my mind many times of how do you, if you see someone really famous, like, if you avoid it, lame, no story. You go up to him, you ask for a picture. No way.

SPEAKER_00

You walk away with a picture and no dignity.

SPEAKER_00

You annoyed them. Do you go tell them you're a big fan? What do you actually do? I think what you just said, which is, are you famous or something, is great.

SPEAKER_01

[SPEAKER_00] Because then they have to be, yeah, I'm Drake.

SPEAKER_00

Then they just have a blank face. [SPEAKER_01] I'm a rapper. [SPEAKER_01] They're okay. [SPEAKER_01] And then you have to start justifying yourself. [SPEAKER_01] That would be great. [SPEAKER_01] I want to do that to Drake. [SPEAKER_01] Dude, six months ago, I saw this guy in the street.

SPEAKER_01

And he was a cool-looking dude. He was young. He looked around my age. And he had this beautiful dog with him. And I was out to eat on the street. We were at a sidewalk table. And he was just standing there. It looked like he was waiting for his wife or something. [SPEAKER_00] And I walked over. [SPEAKER_00] I'm like, man, that's a beautiful dog. [SPEAKER_00] I had a dog that looked just like that.

SPEAKER_00

And I showed him photos of my dog. I showed him my tattoo. And I just learned. I hung out for 20 minutes. He's like, yeah, I just moved here. I'm still liking New York City, this and that. And I was like, cool. And these people were staring at him. And I'm like, are you famous? What are you doing? He goes, yeah, I just, I play for the Knicks. My name's Landry. And he told me his last name. What's his last name? Is it Sam? What is it?

SPEAKER_01

[SPEAKER_00] Sam it. [SPEAKER_00] Dude, I totally had the opening.

SPEAKER_00

His wife came over. My wife was talking to his wife. We totally had the opening where I could have exchanged. You didn't notice he's 6'5"? No, I didn't.

SPEAKER_01

[SPEAKER_00] Everyone in New York is good looking and striking looking. [SPEAKER_00] I just thought he was a dude. [SPEAKER_00] You didn't notice he looks like the original Jesus? Does he look like Jesus? I don't know, man. [SPEAKER_00] He didn't know. [SPEAKER_00] You didn't be like, oh, it's Jesus. [SPEAKER_00] That's why everyone's staring. [SPEAKER_00] He didn't look like that.

SPEAKER_00

[SPEAKER_01] No, in real life. I'm surprised you didn't tell him, like, sorry, everyone's staring. I have a podcast.

SPEAKER_01

[SPEAKER_00] Sorry, do you use Twitter? [SPEAKER_00] No, I think it's because I'm on the Knicks. No, I literally sat with him for 20 minutes talking about his dog. And there was totally, by the way, some chemistry going on where we could have, you just moved here. I just moved here. [SPEAKER_00] You know, we should. [SPEAKER_00] Do you want to do this? [SPEAKER_00] Your leash is intertwined and you left it that way for a bit. [SPEAKER_00] And I thought he was a walk-on. [SPEAKER_00] I thought he was just the lucky guy. [SPEAKER_00] And then I see him last night and I'm like, Landry. [SPEAKER_00] What's good, dog? I had that moment.

[SPEAKER_00] My brother-in-law has a great move. [SPEAKER_00] He pulls with famous people where if he sees them, he just, he saw Mike Tyson once and we were walking. [SPEAKER_00] And he just goes up to him and he's, Mike, what's up, man? [SPEAKER_00] Good to see you. [SPEAKER_00] And he just daps them up and he just says, good to see you, as if he's seen them before. And then they're like, who's this guy? [SPEAKER_00] Seems like he knows me. [SPEAKER_00] I must know him. [SPEAKER_00] So they just treat him really well and they just dap it up and they move on with their day. And I've seen him do this now four or five times.

SPEAKER_00

And I have to say, it's currently the best move that I've seen anyone do with these people. [SPEAKER_01] I use my kids now. [SPEAKER_01] I saw Tom Hanks recently at a pizza place and it was just me, my daughter, and him at this pizza place. [SPEAKER_01] And I was like, I don't really want to approach him. [SPEAKER_01] But it's the greatest guy ever. [SPEAKER_01] So I let my daughter walk. [SPEAKER_01] I saw which way he was walking. [SPEAKER_01] And I was like, Naomi, walk that way. And she walked and intercepted it. [SPEAKER_01] And intercepted it. [SPEAKER_01] And he was like, oh, hey, little girl. [SPEAKER_01] How are you? And he started talking to her.

SPEAKER_00

And I was like, yeah, got it. And so I heard his voice and it was awesome. So I do that now. Yeah, use your child as bait. Yeah. Naturally. Back to who's famous on this list. I'm going to read you a name. [SPEAKER_01] And I was like, Naomi, walk that way. And she walked and intercepted it. [SPEAKER_01] And intercepted it.

SPEAKER_01

And he was like, oh, hey, little girl. How are you? [SPEAKER_00] And he started talking to her. [SPEAKER_00] And I was like, yeah, got it. [SPEAKER_00] And so I heard his voice and it was awesome. [SPEAKER_00] So I do that now. [SPEAKER_00] Yeah, use your child as bait. [SPEAKER_00] Yeah. [SPEAKER_00] Naturally. [SPEAKER_00] Back to who's famous on this list. [SPEAKER_00] I'm going to read you a name. [SPEAKER_00] I want you to tell me if you even know who this person is. [SPEAKER_00] Antonio Gracias. [SPEAKER_00] He's his buddy who started a hedge fund. [SPEAKER_00] Yeah.

SPEAKER_01

[SPEAKER_00] So the second biggest shareholder of SpaceX is Antonio, who owns about 7% of the company. [SPEAKER_00] He's the only one over the 5% threshold as an individual, I think. And it's through he has this thing called Valor.

SPEAKER_00

[SPEAKER_01] And Antonio, he's in Elon's biography a bunch, which is he had been post-business school. [SPEAKER_01] They started buying businesses that did manufacturing but weren't being run well. [SPEAKER_01] And a meatpacking business or stuff like that. [SPEAKER_01] And so he just got really good at running and operating businesses that had manufacturing or production facilities.

SPEAKER_01

And so when Elon needed help with early days of Tesla or early days of SpaceX, he would just bring Antonio in to say, can you help me figure out the bottlenecks and the production line and the factory and how we should be doing things differently? And they both became his study buddy for ramping up production. [SPEAKER_00] And Antonio was always there to help. There's a story about how when Tesla was on the brink, he loaned Elon a million dollars or something like that.

SPEAKER_00

[SPEAKER_01] Personally, not for any equity, just like, you need it. [SPEAKER_01] Here you go.

SPEAKER_00

[SPEAKER_01] And so he's going to make $90 billion in this IPO. [SPEAKER_01] Oh, my God. [SPEAKER_01] Which is incredible. [SPEAKER_01] There's also a guy, one time when I hosted a HustleCon dinner at your office, there was this guy named Steve who came.

SPEAKER_01

And back then, I knew Steve via my friend Neville. He owns this thing called or helped start this thing called Gigafund. Have you heard of Gigafund?

SPEAKER_00

[SPEAKER_01] Mm-hmm. [SPEAKER_01] It's a fund, but it's started by two guys, Steve, who is an acquaintance. [SPEAKER_01] I don't know if you're aware of him, Luke is the other guy. [SPEAKER_01] So Luke is one of the PayPal founders, I believe, or founding team members.

SPEAKER_01

And Steve and Luke got this thing going. [SPEAKER_00] And at the time, I don't know if they described it as this, but it was pretty much called the Gigafund, and it was just fund Elon. [SPEAKER_00] And this is me talking, not them.

SPEAKER_00

But they would say we're just going to raise money and invest in Elon. And I believe they are one of the big shots as well. But Steve was actually at your office. I don't know if you knew that.

SPEAKER_01

I did not know that because even though you hosted events in my office, I didn't really get the invite all the time to go attend them. [SPEAKER_00] That's not true. I was working. [SPEAKER_00] I was working. [SPEAKER_00] I want to read you an email.

SPEAKER_00

I have open right now an email from somebody who used to be at Founders Fund. And Gigafund spun out of Founders Fund. Luke was at Founders Fund, and then he left to start Gigafund. So the email basically says one of the smartest and bravest things I ever saw someone do was when Luke was at Founders Fund.

SPEAKER_01

[SPEAKER_00] He just sat back and realized that the optimal way for him to invest was simply to back every Elon company. [SPEAKER_00] And that's it. Take all the money and put it into the Elon companies. And at the time, that seemed crazy because Elon was doing pretty crazy companies. And in addition, it also seemed not sophisticated, which I think is the underrated part of this. And actually, the part that's more interesting to me. If you look back the last 15 years, all you had to do was buy Google and Facebook and Amazon and just sit on your hands. You didn't need to do anything. Bitcoin and chill. You didn't need to do anything.

SPEAKER_01

We all want to do advanced, complicated, smart, sophisticated sounding things.

SPEAKER_00

[SPEAKER_01] But in reality, if you just pick the right horse. [SPEAKER_01] And in some cases, what I'm talking about with Google and Facebook and Amazon, these were obvious horses. [SPEAKER_01] It was not a surprise to anyone in 2010 that those were going to be important companies over the next 15 years. [SPEAKER_01] And you just had to not do other things. [SPEAKER_01] But famously, Bill Gates selling his Microsoft stock.

SPEAKER_01

Bill Gates would be the wealthiest man in the world had he just not sold his Microsoft stock. Chamath, after Facebook, started his own fund and then started doing SPACs and bought the Warriors. And he's done this and that and this and that and this and that.

SPEAKER_00

[SPEAKER_01] All he had to do was just hold his Facebook stock. [SPEAKER_01] When he was an employee, he would have done better than everything he's done since then. [SPEAKER_01] So we seek out sophistication.

SPEAKER_01

We seek out activity.

SPEAKER_00

[SPEAKER_01] But simplicity is actually a more powerful thing if you get it right. [SPEAKER_01] And so the email basically says I remember when he said that. [SPEAKER_01] I remember what everybody was thinking. [SPEAKER_01] Was it a chain email? [SPEAKER_01] Did he announce that he was leaving and send it to his buddies? [SPEAKER_01] No, no. [SPEAKER_01] This is somebody who was at Founders Fund just emailing me telling me about this. [SPEAKER_01] Oh, wow. [SPEAKER_01] And so it always stuck with me. [SPEAKER_01] And now when I'm looking at this filing and you see Gigafund and Luke Nosek.

SPEAKER_01

Oh, they're listed. So they have a huge stake. They have a huge stake. Got it. [SPEAKER_00] I was never sure how big it actually got.

SPEAKER_00

But I remember Steve, through a friend of a friend, someone was telling me Steve's story. [SPEAKER_01] And he was like, he had this company that was doing really well. [SPEAKER_01] But he quit it to just do this. And I'm like, that's it? [SPEAKER_01] Oh, wow. [SPEAKER_01] And so it always stuck with me. [SPEAKER_01] And now when I'm looking at this filing and you see Gigafund and Luke Nosek. [SPEAKER_01] Oh, they're listed. [SPEAKER_01] So they have a huge stake. [SPEAKER_01] They have a huge stake. [SPEAKER_01] Got it. I was never sure how big it actually got. But I remember Steve, through a friend of a friend, someone was telling me Steve's story.

SPEAKER_00

[SPEAKER_01] And he was like, he had this company that was doing really well. [SPEAKER_01] But he quit it to just do this. And I'm like, that's it? [SPEAKER_01] That's all he does? [SPEAKER_01] And I remember I had the same emotion. I'm like, but why would he? There's got to be more to it.

SPEAKER_01

And obviously. [SPEAKER_00] Yeah, you can do that. [SPEAKER_00] But you should also do XYZ. [SPEAKER_00] It's like, no, actually, you should not do XYZ in addition. [SPEAKER_00] You should just do the one thing. [SPEAKER_00] So I thought that was pretty funny. [SPEAKER_00] Steve Jervison is who I thought you were going to say. [SPEAKER_00] Do you know Steve Jervison? [SPEAKER_00] Yeah, I do. [SPEAKER_00] He started DFJ like a fund. [SPEAKER_00] Now he's got his own fund. [SPEAKER_00] Future Ventures. [SPEAKER_00] I've met him once. Really surprised.

SPEAKER_00

[SPEAKER_01] Just a really nice guy. [SPEAKER_01] He's wacky, silly. [SPEAKER_01] Wacky, future, a true futurist. [SPEAKER_01] And if you go, I think a fun, interesting read is Google. [SPEAKER_01] If you're a true business nerd, go Google Steve Jervison and look at his Flickr. That's right. [SPEAKER_01] Flickr, the old photo sharing website. [SPEAKER_01] For some reason, he's an amateur photographer. [SPEAKER_01] He would go and take pictures of the early rocket launches at SpaceX and stuff. [SPEAKER_01] And the first Bitcoin mining rig, he'll go take a picture. [SPEAKER_01] And he's talking about Bitcoin back in 2012. [SPEAKER_01] And he's excited about Bitcoin.

SPEAKER_00

And he would basically take a photo, post it on Flickr and write a mini caption that was essentially a blog post. [SPEAKER_01] About why he's really excited about a certain technology. [SPEAKER_01] I've actually learned a lot just by reading Steve's Flickr. [SPEAKER_01] I think there's very few true futurists in the world and he's one of them. [SPEAKER_01] And he was one of the earliest investors at Tesla, earliest investors at SpaceX. [SPEAKER_01] Never sold a single share, which is the other remarkable thing: to hold through all the ups. [SPEAKER_01] His wife, Genevieve, was my boss at my first job ever. [SPEAKER_01] And so I knew Genevieve very well.

SPEAKER_00

[SPEAKER_01] He's cool, yeah. [SPEAKER_01] Yeah, and I'm friends with her on Facebook. [SPEAKER_01] And so I've seen this whole thing and I see all these cool photos of what they're doing. [SPEAKER_01] And it's going to rocket launches, this and that. [SPEAKER_01] And it's been really cool to see behind the scenes a little bit of that. [SPEAKER_01] And so that's been funny as well. [SPEAKER_01] Yeah. [SPEAKER_01] And I think one of the reasons on this podcast, I try to be more optimistic and give the benefit of the doubt with technology. [SPEAKER_01] If you're like, yeah, a lot of people get things wrong.

SPEAKER_01

[SPEAKER_00] Yeah, a lot of people build dumb stuff. [SPEAKER_00] Yeah, a lot of stuff doesn't work.

SPEAKER_00

[SPEAKER_01] That's pretty obvious. And I do that for two reasons. One is I have this phrase, which is: pessimists get to be right and optimists get to be rich. If you hang out in Silicon Valley long enough, you realize that pessimism is a losing strategy when you're around innovation and technology.

SPEAKER_01

[SPEAKER_00] It pays to be an optimist.

SPEAKER_00

That's the first thing. [SPEAKER_01] The second thing is I had a friend recently who had a family member dealing with health issues and had those health issues for decades.

SPEAKER_00

[SPEAKER_01] And it kind of came down to: I have to live with this. [SPEAKER_01] And then on our podcast, we've talked about that guy from GitLab who is curing his own cancer using AI.

SPEAKER_01

And that sounds futuristic, but he actually did it. It's not a theoretical thing. At least one person did it.

SPEAKER_00

[SPEAKER_01] And so he went back home recently on the East Coast and was like, hey, I've been talking to Claude and I got some ideas. [SPEAKER_01] We could try this. [SPEAKER_01] And if I get this data, I can feed it here and I could do this. [SPEAKER_01] And what I told him was: it's not that there are different types of people—they resist it and we don't. [SPEAKER_01] It's that we are in the bubble where you hear about people doing these remarkable things. [SPEAKER_01] It becomes normalized. [SPEAKER_01] It feels possible.

SPEAKER_01

It's the Roger Bannister four-minute mile type of thing.

SPEAKER_00

[SPEAKER_01] Like once you hear that somebody cured their own cancer with AI, guess what? [SPEAKER_01] You're going to approach somebody, a loved one with cancer, very differently than you would have if you had just not heard that it was possible. [SPEAKER_01] And one of the great things about hopefully listening to this podcast, but also just generally being around ambitious, interesting, innovative people, is that you get that normalization of what's not normal. [SPEAKER_01] You get to hear—your frame gets broken enough where you will, in your own situations of life, approach it slightly differently.

SPEAKER_00

[SPEAKER_01] And because I think part of this is Elon glazing and it's SpaceX glazing.

SPEAKER_01

But another part of it is: damn, this dude literally called his shot 20 years ago.

SPEAKER_00

[SPEAKER_01] Learned, self-taught, learned how to build rockets and recruit this team. [SPEAKER_01] He did what was pretty much impossible. [SPEAKER_01] And then today is the biggest tech IPO in history. [SPEAKER_01] You have to respect that and also, forget about how good it is for them. [SPEAKER_01] But let it break your frame a little bit so that in your life, when an opportunity strikes or an idea comes, you don't count yourself out.

SPEAKER_01

You don't miss that opportunity. You don't ignore what's in front of you and you actually take action. One of my biggest takeaways of living in Silicon Valley for 10 years was to use the word mostly and almost more often. And what I mean by that is I used to say things like that will never happen or that cannot happen or that's impossible. And then I started changing this to where I see something I think is unlikely.

SPEAKER_01

You have to respect that and also forget about how good it is for them. But let it break your frame a little bit so that in your life, when an opportunity strikes or an idea comes, you don't count yourself out. You don't miss that opportunity. You don't ignore what's in front of you and you actually take action. One of my biggest takeaways of living in Silicon Valley for 10 years was to use the word mostly and almost more often than not. And what I mean by that is I used to say things like that will never happen or that cannot happen or that's impossible. And then I started changing this to where I see something I think is unlikely. And I almost always try to say it almost never works, but sometimes it does. Or it mostly ends this way instead of saying that will fail and it will end this way. I've seen this so many times where I think in my head too black and white, like if A, then B. If someone has this idea, it cannot work or this cannot happen. And you have to train yourself to always think in not absolutes, but the odds are this. But those are still odds that if enough people try, it could work. Well, speaking of the impossible, one thing I wanted to bring up was his pay package. I didn't know this until I was digging in. So I thought it's kind of new learning.

SPEAKER_01

[SPEAKER_00] So you remember at Tesla when he had that crazy pay package idea? And he was like, yeah, if we become the world's most valuable car company by far, if we get to 500 billion in value and we're delivering this many cars and we do this and we do this, then I get this huge pay package. And if I don't, I get nothing. I've worked for free. And it's laughable when they sign it. They're like, yeah, dude, whatever. You do that. It happens and people freak out over it.

SPEAKER_00

[SPEAKER_01] Exactly. There's a compilation of people mocking it, laughing, being like, this is ridiculous, never going to happen, blah, blah, blah. So ludicrous. But whatever. And then it happens and he gets the money and then a dude with eight shares sues him in Delaware.

SPEAKER_01

[SPEAKER_00] Yeah. And says, no, that wasn't—he shouldn't—that shouldn't have been approved. That's too generous. And it's like, dude, it was seen as impossible before. And he got stripped of the pay package and then blah, blah, blah. He ended up getting revoted and reinstated. But the plaintiff was like, no, that was basically the argument. Yeah, it's insane. Have you seen what his pay package is here? And he has the same one. OK, so let me just read this to you. [SPEAKER_00] So the very first one is called the Mars Award.

SPEAKER_00

[SPEAKER_01] So Elon gets one billion shares in SpaceX. How much? How many points is that? So it's going public at one hundred thirty-five dollars. So that'd be one hundred and thirty-five billion at today's value. But obviously, if he did all this stuff, it would be worth a lot more than today's value.

SPEAKER_00

[SPEAKER_01] It would be the total grants are like seven hundred fifty billion dollars. That's his hypothetical comp if he hits all these things. But now listen to what he's going to hit. Two things are required. One, the market cap has to grow to seven and a half trillion, which would be the most valuable company ever. And two, a permanent self-sustaining colony on Mars of at least one million people. Both have to happen for him to get paid. That's the Mars Award. That's crazy. A million people living on Mars. The other one is the AI CEO Award. So this is 300 million shares. So a third of that. This is the consolation prize. You know what I mean? This is an ice cream he gets as a treat, which is the company goes to six point five trillion in value. And he's delivering a hundred terawatts of compute per year from non-Earth data centers. So he does the space data center thing and delivers a hundred terawatts of compute per year. Now, you might be wondering, a hundred terawatts? I don't really know how to put that in perspective. Guess how much? So he's trying to—he gets it if he does a hundred. Guess how much the total current U.S. terawatt production is?

SPEAKER_00

I don't even know what a terawatt is. [SPEAKER_01] So we're talking a unit. You said 750. Is that what you said? He wants, if he does a hundred, he gets the award. A hundred. What is that relative to all of the U.S.? So he gets money at a hundred. What's the current U.S. at? I don't know. Take a guess. [SPEAKER_01] Fifty.

SPEAKER_00

So that would be like if he doubled the U.S. total electric grid, that'd be pretty crazy, right? [SPEAKER_01] It's currently one terawatt. So we'd have to 100X the entire U.S. grid just to get this award. In space? [SPEAKER_01] From space data centers, yes. From something that doesn't even exist and people don't even believe is possible. So yeah. Huh. Goals.

SPEAKER_00

[SPEAKER_01] Set big goals, I guess. It's hard to reply to that. By the way, his base salary is zero. I mean, he owns obviously a huge percentage of the company anyway, but this is the additional grant he gets for continuing to work in the company. This is crazy, man. It goes back to the fact, the biggest risk is that he dies. That's the... The biggest risk is that he dies. The biggest risk is that he dies. Like if I'm a shareholder, I'm like, you must have a dietician. You must have a sleep coach. That's what we're talking here. Or is it a Jon Jones situation where... The more coke you do... It's the wildness that creates the fighter. [SPEAKER_01] This is crazy, man.

SPEAKER_01

It goes back to the fact that the biggest risk is that he dies. That's the biggest risk. The biggest risk is that he dies. The biggest risk is that he doesn't have... If I'm a shareholder, you must have a dietician. You must have a sleep coach. That's what we're talking about here.

SPEAKER_00

[SPEAKER_01] Or is it a Jon Jones situation where the more coke you do...

SPEAKER_01

[SPEAKER_00] It's the wildness that creates the fighter. [SPEAKER_00] And if you put him on that sleep at 8 p.m. schedule, he's not Jon Jones anymore. [SPEAKER_00] Dude, I talked to a person who trains professional athletes and he said it's funny. [SPEAKER_00] I used to train these baseball players and the ones that were the most eager and did exactly what I said and came to me all the time saying, give me more. [SPEAKER_00] I want more. [SPEAKER_00] I want to do this. [SPEAKER_00] They almost always were never as good as the guys who were eating M&Ms or doing skid... Eating poorly and going to bed late because they played video games all night and they just show up.

SPEAKER_01

And he said one guy made a game-winning shot. And afterwards, I was so excited. [SPEAKER_00] I ran up and high-fived him. [SPEAKER_00] He's like, what are you doing, man? [SPEAKER_00] You made the shot. [SPEAKER_00] He's like, oh, whatever, dude. [SPEAKER_00] Who cares?

SPEAKER_00

And he kept walking. He's like the guys who cared the least and tried—not exactly tried, but put mental space on the effort were the best. And maybe that's what's happening here. The weirder things are, the better he's going to perform. Yeah, which is, but how crazy is it that when we hear this stuff, it's like, oh, can he make Starship work? Can he make an orbital data center work?

SPEAKER_01

[SPEAKER_00] It's like we think the higher risk is just that he dies.

SPEAKER_00

It's in the probabilities game, and the bigger risk seems to be that.

SPEAKER_01

[SPEAKER_00] You've learned so many times in a row that it's not wise to bet against him.

SPEAKER_00

So I don't think I'm a dumb idiot and we should preface this before this episode. Don't listen to anything. [SPEAKER_01] But the one thing that is true is that he's a challenging person to bet against. [SPEAKER_01] And so all these science-fictiony things, I think that he's bad at timelines, but I think he's good at doing it eventually. [SPEAKER_01] Okay. [SPEAKER_01] Well, the glaze fest is over. So if you hate Elon, we're sorry. Yeah.

SPEAKER_01

[SPEAKER_00] This wasn't the episode for you. [SPEAKER_00] If you hate Elon, hate to break it to you. [SPEAKER_00] Maybe the thumbnail should have given that away, but if you made it all the way here and you hate-watched this whole thing, I'm sorry. [SPEAKER_00] It's like the percentage of the population that tastes cilantro—what is it?—cilantro. And it tastes like bleach to them, genetically. This might've been the cilantro for some people and I'm sorry if it was. All right. [SPEAKER_00] That's it. That's the pod. Thank you. And in some cases, like what I'm talking about with Google and Facebook and Amazon, these were obvious horses.

SPEAKER_01

These are not like, it was not a surprise to anyone in 2010 that those were going to be important companies over the next 15 years. And you just had to not do other shit. But famously, you know, Bill Gates selling his Microsoft stock. Bill Gates would be the wealthiest man in the world had he just not sold his Microsoft stock. Chamath, after Facebook, you know, started his own fund and then started doing SPACs and bought the Warriors. And he's done this and that and this and that and this and that. All he had to do was just hold his Facebook stock. For when he was an employee, he would have done better than everything he's done since then. So we seek out sophistication.

SPEAKER_01

We seek out activity. But simplicity is actually, you know, a more powerful thing if you get it right. And so he was this email basically says, like, I remember when he said that. I remember what everybody was thinking. And was it like a chain email? Like he announced that he was leaving and he sent it to like his buddies? No, no. This is somebody who was at Founders Fund just emailing me telling me about this. Oh, wow. And so it always kind of stuck with me. And now when I'm looking at this filing and you see Gigafund and Luke Nosek. Oh, they're listed. So they have a huge stake. They have a huge stake. Got it.

SPEAKER_00

I was never sure how big it actually got. But I remember Steve, through a friend of a friend, someone was telling me Steve's story.

SPEAKER_01

And he was like, he had this company that was like doing really well. But he kind of quit it to just do this.

SPEAKER_00

And I'm like, that's it?

SPEAKER_01

That's all he does? And I remember I had the same emotion.

SPEAKER_00

I'm like, but why would he? There's got to be more to it.

SPEAKER_01

And obviously.

SPEAKER_00

Yeah, you can do that. But you should also do XYZ. It's like, no, actually, you should not do XYZ in addition. You should just do the one thing. So I thought that was pretty funny. Steve Jervison is who I thought you were going to say. Do you know Steve Jervison? Yeah, I do. He started DFJ like a fun. Now he's got his own fun. Future Ventures. I've met him once.

SPEAKER_01

Really surprised. Just a really nice guy. He's like a wacky, like silly. Wacky, future, a true futurist. And if you go, I think a fun, interesting read is go Google. If you're a true business nerd, go Google Steve Jervison and go look at his Flickr.

SPEAKER_00

That's right.

SPEAKER_01

Flickr, like the old photo sharing website. For some reason, he's like an amateur photographer. He loves to, like he would go and take pictures of the early rocket launches at SpaceX and shit like that. And like, you know, the first Bitcoin mining rig, he'll go take a picture. And he's talking about Bitcoin back in 2012. And he's excited about Bitcoin.

SPEAKER_00

And he would basically take a photo, post it on Flickr and write like a mini caption that was essentially a blog post.

SPEAKER_01

But why he's really excited about a certain technology. I've actually learned a lot just by going and reading Steve's Flickr. I think there's very few true like futurists in the world and he's one of them. And he was one of the earliest investors at Tesla, earliest investors at SpaceX. Never sold a single share, which is the other remarkable thing is to hold through all the ups. His wife, Genevieve, was my boss at my first job ever. And so I knew Genevieve very well. He's cool, yeah. Yeah, and I'm friends with her on Facebook. And so like I've seen like this whole thing and like I, you know, I see all these like cool photos of what they're doing.

SPEAKER_01

And it's like going to rocket launches, this and that. And it's been really cool to like see behind the scenes a little bit of that. And so that's been kind of funny as well. Yeah. And, you know, I think one of the reasons on this podcast, I try to be more optimistic and benefit of the dowdy with, I don't know, technology. If you're like, yeah, a lot of people get things wrong.

SPEAKER_00

Yeah, a lot of people build dumb stuff. Yeah, a lot of stuff doesn't work.

SPEAKER_01

That's pretty obvious.

SPEAKER_00

And I do that for two reasons. One is I have this phrase, which is like pessimists get to be right and optimists get to be rich. If you hang out in Silicon Valley long enough, you realize that pessimism is a losing strategy when you're around innovation and technology. It pays to be an optimist. That's the first thing.

SPEAKER_01

The second thing is I had a friend recently who, you know, had a family member who was dealing with like health issues and had had that like, you know, health issues for decades. And this kind of like it was resolved to like I have to live with this. And then on our podcast, we've talked about that guy from GitLab who like is curing his own cancer using AI. And, you know, that sounds like futuristic, but like he actually, you know, did it. It's not like a theoretical thing. Like, you know, at least one person did it. And so he went back home recently and, you know, on the East Coast and was like, hey, I've been talking to Claude and I got some ideas. We could try this.

SPEAKER_01

And if I get this data, I can feed it to here and I could do this. And what I told him, I was like, you know, it's not that, oh, there are different types of people. They resist it and we don't. It's we are in the bubble where you hear about people doing these remarkable things. It becomes normalized. It feels possible. It's like the Roger Bannister four minute mile type of thing. Like once you hear that somebody cured their own cancer with AI, guess what? You're going to approach somebody, you know, a loved one with cancer very differently than you would have if you had just not heard that that was possible.

SPEAKER_01

And one of the great things about hopefully listening to this podcast, but also just generally being around ambitious, interesting, innovative people is that you get that normalization of what's not normal. You get to hear you get you you get your frame broken enough where you will in your own situations of life approach it slightly differently. And, you know, because I think part of this is like, you know, it's just Elon glazing and it's SpaceX glazing. But like another part of it is like, damn, this dude literally called his shot 20 years ago. Learn, you know, self-taught, learned how to build rockets and recruit this team. It did what was pretty much impossible.

SPEAKER_01

And then today is, you know, the biggest tech IPO in history. You have to, you know, respect that and also like forget about how good it is for them. But like let it break your frame a little bit so that in your life, when an opportunity strike or an idea comes, you don't count yourself out. You don't miss that opportunity. You don't ignore what's in front of you and you actually take action. One of my biggest takeaways of living in Silicon Valley for 10 years was to use the word mostly and almost more often than not. And what I mean by that is I used to say things like that will never happen or that cannot happen or that's impossible.

SPEAKER_01

And then I then I started changing this to where I see something I think is unlikely. And I I almost always try to say it almost never works, but sometimes it does. Or like, you know, it mostly ends this way instead of saying that will fail and it will end this way. I've seen this so many times where I think in my head like to black and white of like if A, then B, you know, if someone has this idea, it cannot work or this cannot happen. And you have to train yourself to always think in like not absolutes, but like the odds are this. But those are still like odds that like if enough people try, it could work.

SPEAKER_01

Well, speaking of the impossible, one thing I wanted to bring up was the his pay package. I didn't know this until I was digging in. So I thought it's kind of new learning.

SPEAKER_00

So you remember at Tesla when he had that like crazy, Elon had that crazy pay package idea. And he was like, yeah, like if we if we become, you know, the world's most valuable car company by far, if we get to like, you know, 500 billion in value and we're delivering this many cars and we do this and we do this, then I get this like huge pay package. And if I don't, I get nothing. I've worked for free. And it's like laughable when they sign it. They're like, yeah, dude, whatever. You do that. It happens and people freak out over it.

SPEAKER_01

Exactly. There's a compilation of people of mocking it, laughing, being like, this is ridiculous, never going to happen, blah, blah, blah. So ludicrous. But, you know, whatever. And then it happens and he gets the money and then a dude with eight shares sues him in Delaware. Yeah.

SPEAKER_00

And says, no, you know, that wasn't that wasn't he shouldn't that shouldn't have been approved. That's too generous. And it's like, dude, it was seen as impossible before. And he got stripped of the pay package and then blah, blah, blah. You know, he got ended up getting revoted and reinstated.

SPEAKER_01

But the plaintiff was like, no, that that was basically the argument. Yeah, it's insane. Have you seen what his pay package is here? And he has like the same one. OK, so let me just read this to you.

SPEAKER_00

So the very first one is called the Mars Award.

SPEAKER_01

So Elon gets one billion shares in SpaceX. How much? How many points is that? So it's going public at one hundred thirty five dollars. So that'd be one hundred and thirty five billion at today's value.

SPEAKER_00

But obviously, if he did all this stuff, it would be worth a lot more than today's value.

SPEAKER_01

It would be the total grants are like seven hundred fifty billion dollars. That's his like hypothetical comp if he hits all these things. But now listen to what he's going to hit. Two things are required. One, the market cap has to grow to seven and a half trillion, which would be the most valuable company ever. And two, a permanent self-sustaining colony on Mars of at least one million people. Both have to happen for him to get paid. That's the Mars Award. That's crazy. A million people living on Mars. The other one is the AI CEO Award. So this is 300 million shares. So a third of that. This is kind of like the like the consolation prize. You know what I mean?

SPEAKER_01

Like this is like a little ice cream he gets as a treat, which is the company goes to six point five trillion in value. And he's delivering a hundred terawatts of compute per year from non-Earth data centers. So he does the space data center thing and delivers a hundred terawatts of compute per year. Now, you might be wondering, a hundred terawatts? I don't really know how to put that in perspective. Guess how much? So he's trying to, he gets it if he does a hundred. Guess how much the total kind of current U.S. terawatt production is? I don't even know what a terawatt is. So we're talking like a unit. You said 750. Is that what you said?

SPEAKER_01

He wants, if he does a hundred, he gets the award. A hundred. What is that relative to all of the U.S.? So he gets money at a hundred. What's the current U.S. at? I don't know. Take a guess.

SPEAKER_00

Fifty. So that would be like if he doubled the U.S. total electric grid, that'd be pretty crazy, right? It's currently one terawatt. So we'd have to 100X the entire U.S. grid just to get this award. In space?

SPEAKER_01

From space data centers, yes.

SPEAKER_00

From something that doesn't even exist and people don't even believe is possible. So yeah. Huh. Goals. Yeah.

SPEAKER_01

Set big goals, I guess.

SPEAKER_01

It's hard to reply to that. By the way, his base salary on the way is zero. I mean, he owns obviously a huge percentage of the company anyways, but like this is the additional grant he gets for continuing to work in the company. This is crazy, man. It goes back to the fact, like the biggest risk is that he dies. That's the... The biggest risk is that he dies. The biggest risk is that he dies. Like the biggest risk is that he doesn't have... Like if I'm a shareholder, I'm like, you must have a dietician. You must have a sleep coach. Like that's what we're talking here. Or is it like a Jon Jones situation where... Like the more coke you do.

SPEAKER_00

It's the wildness that creates the fighter. You know what I mean? And if you put him on that sleep at 8 p.m. schedule, he's not Jon Jones anymore. Dude, I talked to a person who trains professional athletes and he was like, it's so funny. I used to train these baseball players and the ones that were the most eager and did exactly what I said and came to me all the time and said, give me more. I want more. I want to do this. Because they almost always were never as good as the guys who were like eating M&Ms or doing

SPEAKER_01

skid... Like eating poorly and like going to bed at late because they played video games all night and they just show up. And like he was like one guy made like a game winning shot. And afterwards, I was like so excited.

SPEAKER_00

I ran up and high five him. He's like, what are you doing, man? He's like, you did the shot. He's like, oh, whatever, dude. Who cares? And he like kept walking. He's like the guys who cared, you know, treat them mean, keep them keen. The guys who cared the least amount and like tried, not exactly tried, but like put brain space on like the effort or the best. And maybe that's what's happening here. You know, the weirder that things are, the better that he's going to perform. Yeah, which is, which is, but I mean, how crazy is it that when we hear this stuff, it's like, oh, like, can he make starship work? Can he make an orbital data center work?

SPEAKER_00

It's like, we think the higher risk is just that he dies. It's like in the probabilities game, we're like, I don't know. The bigger risk seems like that. It's just, it's, you've learned so many times in a row that it's, it's not wise to bet against. So I don't think that like, I'm a dumb idiot and I, we should preface this before this episode. Don't listen to anything.

SPEAKER_01

But the one thing that is true is that he's a challenging person to bet against. And so all these science fictiony things, I, I, I, I think that he's bad at timelines, but I think he's good at doing it eventually.

SPEAKER_01

Um, okay. Okay. Well, the glaze fest is over.

SPEAKER_00

So, if you hate Elon, we're sorry. Yeah. This wasn't the episode for you. If you hate Elon, um, hate to break it to you. Maybe the thumbnail should have given that away, but if you made it all the way here and you hate watched this whole thing, I'm sorry. It's like, you know, you know, the, the, that percentage of the population that, uh, they taste, um, what is it like the thing, cilantro, cilantro.

SPEAKER_01

And it tastes like bleach to them, like genetically. Um, this might've been the cilantro for some people and I'm sorry if it was. All right.

SPEAKER_00

That's it.

SPEAKER_01

That's the pod.

SPEAKER_01

Oh, just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just to just

SPEAKER_01

Thank you.