Elon Musk & Gwynne Shotwell on AI Risks and Peer Review, Starship, Terafab, SpaceX/Tesla Merger

(0:00) SpaceX's Gwynne Shotwell joins The Besties! (1:45) Gwynne's SpaceX story, selling rockets, and working for Elon (6:45) Running modern day SpaceX: AI, Starlink, Rockets, and X (13:43) Direct to cell with Starlink, retiring rockets, competition (18:34) Data centers in space (22:00) Management at SpaceX (27:37) Elon Musk joins: AI's real risk, model peer review, what he meant by "Dario is right" (36:53) Elon and Gwynne on their working relationship, Starship's future (46:16) Terafab, Tesla, Flying cars?, merging Tesla and SpaceX (52:51) Lying AIs, how to do AI peer review right Thanks to our partners for making this possible! IREN is a vertically integrated AI Cloud platform, delivering data centers, compute and software for AI training and inference. https://iren.com/ Oracle connects the data, applications, and infrastructure that turn AI into business outcomes—with the flexibility, choice, and control to optimize as AI evolves. http://oracle.com/ai EY helps tech innovators scale from startup to exit to megacap. You build the future. We'll handle the rest. http://www.ey.com Meta believes the future is for everyone. We're focused on giving every person the tools to reach their full potential and making sure the benefits of technology are distributed to all. http://www.meta.com/http://www.meta.com Keel Infrastructure owns the power, land, and connectivity that HPC and AI run on - backed by secured energy assets and established grid interconnections across North America. https://keelinfra.com/ Airwallex - Agentic Global Business Accounts. Open local accounts in 70+ countries to accept payments, earn yield, pay globally, and manage spend. http://airwallex.com PayPal has been revolutionizing commerce globally for more than 25 years. Creating innovative experiences that make moving money, selling, and shopping simple, personalized, and secure, PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy. For more information, visit https://www.paypal.com Google for Startups connects founders with the right people, products, and best practices to help startups build faster and go further. https://startup.google.com/ Explore ideas, industries, and technologies worth understanding with Chamath every week on Learn with Me: https://research.socialcapital.com/allin Follow Gwynne: https://x.com/Gwynne_Shotwell Follow Elon: https://x.com/elonmusk Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@allin Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg Intro Video Credit: https://x.com/TheZachEffect

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Elon Musk?

  What's our latest timeline on getting to Mars?

• 0:06Speaker 01

  Getting to Mars? Oh, I think we'll put people down within a decade. Welcome Gwen Shotwell, the president and COO of SpaceX.

• 0:12Speaker 02

  She's instrumental, a really crucial person to the success of SpaceX. She's really the glue. You know, she's the glue to the tornado.

• 0:21Speaker 01

  Fail fast, learn fast, make your design robust. I would be disappointed if we didn't have a settlement on the moon.

• 0:27Speaker 03

  The space and AI firm has officially made history on its $75 billion IPO, debuting with a market value of $1.7 trillion.

• 0:36Speaker 01

  The most efficient place to put it for its compute is on orbit. Manage risk, don't avoid it.

• 0:43Speaker 04

  Please welcome Gwen Shotwell.

• 0:56Speaker 01

  Hey.

• 0:57Chamath Palihapitiya?

  Thank you so much for coming. You're right here.

• 1:00David Friedberg?

  Right there.

• 1:02Chamath Palihapitiya?

  Welcome.

• 1:02Speaker 01

  Thank you.

• 1:03Chamath Palihapitiya?

  Thanks for being here.

• 1:03Speaker 01

  It's good to be here.

• 1:04David Friedberg?

  Nice to see you.

• 1:05Speaker 01

  Nice to see you.

• 1:07Chamath Palihapitiya?

  Well, we really appreciate you coming out. How's it going at SpaceX?

• 1:13Speaker 01

  You know, we're bored. There's nothing going on.

• 1:16Chamath Palihapitiya?

  Not a lot happening.

• 1:17Speaker 01

  I've got all the time in the world.

• 1:18Chamath Palihapitiya?

  And by the way, Gwen.

• 1:19Speaker 01

  Elon has more time, by the way.

• 1:21Chamath Palihapitiya?

  Yeah, I mean, you've been at SpaceX forever. Are you the longest tenured employee after Elon?

• 1:28Speaker 01

  After Elon, yeah. In fact, my 24th anniversary was the 9th of September, last week, sometime.

• 1:35Chamath Palihapitiya?

  Wow.

• 1:35Speaker 01

  Yeah, yeah.

• 1:36Chamath Palihapitiya?

  That is extraordinary. Gwen, can you take us back to the day where you initially get this call? And you're like, hey, there's this thing. Like, what does the arc of the decision look like? And how did you get convinced to underwrite this business? Like, just walk us through that.

• 1:54Speaker 01

  Okay, well, Elon underwrote it, right? I just worked there.

• 1:57Chamath Palihapitiya?

  Yeah.

• 1:57Speaker 01

  But the story is a little crazy, actually. So I was going out to lunch. One of my best friends, who I was working with, was going to go work for Elon. And I took him out to lunch, kind of going away lunch. And he's like, oh. When I dropped him back off, he said, oh, come on in and meet Elon. Like, ah, he's busy, you know, we don't need to do that. But we did it anyhow, and I met him. And I said, hey, I think you really need, I think you need a full-time person to run your business development shop. You know, you've got kind of a part-timer. He's a contractor. You know, it's not a great look. And he looked at me very thoughtfully and, you know, kind of scratched his head. And then we said goodbye, chatted a little bit, said goodbye.

• 2:39Speaker 01

  And then I got back to my office, and I got a call from Elon's assistant, Mary Beth. And she said Elon wants you to apply for the new vice president of business development position. Can you come interview? I'm like, now? No, boy, you have a job. I can't go now. Tomorrow? Okay, sure, tomorrow. And then it took me like four weeks to decide, yes. I was being a total idiot.

• 3:03Chamath Palihapitiya?

  But at the time, like, what was the scale of that business? Like, what did you think it needed that it didn't have? Because it was still very much an R and D.

• 3:09Speaker 01

  It was very R and D, but, you know, Elon had an investment, and he wanted some return. He wanted cash, right? He wanted customers. And I was doing that work anyhow in the space industry.

• 3:21Speaker 01

  Turns out I was pretty good at it.

• 3:25Speaker 01

  But, yeah, so he, so what did it look like? I was the seventh employee to sign my contract. I took, I gave two weeks' notice and took a week off to remodel a bathroom, because I knew I would never have time to do it once I started working for Elon. Came three weeks later, employee number 11, and we just got to it. And we sold a rocket about 12 months later.

• 3:47Chamath Palihapitiya?

  And that's.

• 3:48Speaker 01

  Without a rocket. There wasn't a rocket.

• 3:50Chamath Palihapitiya?

  There wasn't a rocket, yeah. So what does that sales cycle look like? How do you convince somebody that they can, they can actually take that risk and maybe give you the deposit you need to start the cycle to build the thing?

• 4:00Speaker 01

  So the timing was great. By the way, SpaceX should never have existed, right? If the other launch providers were great, then a new entrant can't make headway, right? Because they were so entrenched. So we should have never made it. But turns out, you know, customer service wasn't great, rockets were incredibly expensive. And so there was that piece, right? And then the other piece was 9/11. At that time, the military was desperately looking for someone who could come in and do rapid launch. You know, they, they kind of knew where the bad guys were about, for about four hours after the events of 9/11, and they really wanted to be able to get some capability in theater.

• 4:45Speaker 01

  It took us a while to do it, but we did what we said we were going to do.

• 4:48Chamath Palihapitiya?

  Oh, so it really was sort of like out of tragedy, this opportunity gets born.

• 4:52Speaker 01

  To some extent, yeah.

• 4:53Chamath Palihapitiya?

  That's incredible.

• 4:54Speaker 01

  And it wasn't specific to SpaceX.

• 4:55Chamath Palihapitiya?

  No.

• 4:55Speaker 01

  It was just the state of the industry at the time.

• 4:58Chamath Palihapitiya?

  And then obviously, you know, very, very famous first chapter, where you guys get almost to the brink, and you need this last launch to work.

• 5:09Chamath Palihapitiya?

  Your role started to evolve pretty meaningfully by that point. So can you walk us through, like, what was the internal dynamics at that business that kind of like put you into that position?

• 5:17Speaker 01

  So it was very startup-y. I was the sales lady. But then when you have sales, you need, you know, to manage your customers, and you need a finance function. And even though we were little, and I think one of the defense contractors at the time said, they're a fly on my, you know, on a giant, on my big toe or something. I was like, well, I don't think you should have flies on your toes. But, so, but you still need a government affairs function. You need to defend yourself. We never go on the offensive in Washington. We're always in defense mode. But, so I just kept taking on more and more. And then when we were getting our largest contract at the time, it was the cargo resupply contract. We call it CRS. And this was 2008.

• 6:04Speaker 01

  Elon was super busy with Tesla, quite busy at SpaceX as well. There was a lot going on. And he needed a partner at the time. And I think he was trying to pick Gwen on this side, or maybe one of the other guys who had kind of taken on, gobbled up more technical scope. And he asked me to do it on our way to our final negotiations for this $1.6 billion contract with NASA on the runway. It's like, hey, do you want to be president? I was like.

• 6:30Chamath Palihapitiya?

  Do I?

• 6:32Speaker 01

  Well, no, not initially. For like that nanosecond, like, well, I love my job. I love the guys, my teammates. And then it's like, okay, I'm being an idiot again. Yes, I want the job.

• 6:45Chamath Palihapitiya?

  So now, fast forward maybe, just to come to where we are today.

• 6:49Chamath Palihapitiya?

  The scope and the ambition of this business has expanded dramatically. I mean, it almost seems in like the last year.

• 6:57Chamath Palihapitiya?

  It's as much an AI business as it is a space business. I think Elon may have said that. I don't know if it leaked, or they said it out loud about the scale.

• 7:04Speaker 01

  In fact, by revenue.

• 7:05Chamath Palihapitiya?

  And by revenue, yeah.

• 7:08Chamath Palihapitiya?

  How do you manage now the culture of these two different businesses now that have to sort of sit under this roof and ideally work together and complement each other?

• 7:17Speaker 01

  So the team, you know, there's been a lot of churn at XAI for sure. And SpaceXers have kind of marched in and helped out where there were significant gaps in that arena. And we were all really excited to learn about AI. I mean, I'm an AI noob. And we have a bunch of folks that were just really excited about it. And I think we all recognize, Elon set the stage beautifully, as he does, that, you know, if you're not using AI, if you're not leading AI, you're, you know, you run the risk, significant risk of being irrelevant. And there was no way that SpaceX was going to be irrelevant, right?

• 8:01Speaker 01

  It's too important to the company, and the work we're doing is too important. So it was, you know.

• 8:06Chamath Palihapitiya?

  Do you expect that the future generations of rockets will be increasingly more and more informed, built, designed?

• 8:15Speaker 01

  100%.

• 8:15Chamath Palihapitiya?

  By these systems, yeah?

• 8:17Speaker 01

  Yes.

• 8:18Chamath Palihapitiya?

  And how do you manage the team, you know, because you have like these incredible, I mean, literally rocket scientists, they've trained their whole lives in a way. And now you have to help them onboard to a tool chain and be comfortable with sort of what that means. Like, I don't know if you saw, for example, that all these mathematicians got really upset when, I think it was OpenAI, solved this very famous equation.

• 8:40Speaker 01

  Oh, the Navier-Stokes.

• 8:41Chamath Palihapitiya?

  The Navier-Stokes.

• 8:42Speaker 01

  Yeah, I read about that. Well, there's some debate on whether they.

• 8:45Chamath Palihapitiya?

  They brute forced the solution, but then these 20 field medalists essentially said, hey, you're ruining the craft.

• 8:51Chamath Palihapitiya?

  Now, I don't think that's.

• 8:52David Friedberg?

  You're taking away the medals.

• 8:53Speaker 01

  Yeah.

• 8:53Chamath Palihapitiya?

  They're going to take them, exactly.

• 8:55David Friedberg?

  Like, that's, that's the career. It's not about making stuff. It's about getting awards. And now all of the awards are gone.

• 9:01Speaker 01

  Yeah. And I'd rather just have the world be a better place, a smarter place, as being better informed and solving problems than worrying about.

• 9:09David Friedberg?

  Make more stuff.

• 9:10Speaker 01

  That. Yeah. Make more stuff.

• 9:12David Friedberg?

  What's the cultural merger been like? You've got XAI, you've got X. I don't know how many people are involved in X itself, SpaceX. I mean, are these differently managed businesses? How do you run management there? Do people kind of, are they pretty fluid amongst the units? Do you think about them as units? Or how do you, how do you actually manage this?

• 9:31Speaker 01

  So I would say we are not fully, fully integrated yet. And then we just did the cursor, you know, situation.

• 9:37Chamath Palihapitiya?

  Congratulations on that, by the way.

• 9:38David Friedberg?

  Yeah, congratulations.

• 9:38Chamath Palihapitiya?

  What a purchase that was.

• 9:40Speaker 01

  Yeah, yeah, yeah. They're great. They're great. We just closed that, I think, a month ago today, actually.

• 9:47Speaker 01

  Yeah, so we're not fully integrated yet, but we.

• 9:51Speaker 01

  I think the teams are gelling really well. Very kind of different verticals, but again, because of the turn that we had at XAI, so much SpaceX leadership and engineering went into that, basically went in there. So we're getting integrated faster than I thought. It's probably not as fast as Elon wants it.

• 10:09Jason Calacanis

  Yeah.

• 10:10David Friedberg?

  And so one of the things that strikes me is the scale and the number of capital projects you have, that you have to manage probably more capital projects that are more different from one another than any other organization.

• 10:23Jason Calacanis

  It's the scale of a country.

• 10:24David Friedberg?

  No, I mean, it has to be. And so I think about this Louisiana Spaceport. You've got Starship, which is the most ambitious aeronautical project of all time. You've got Terafab, which I think is one of the most inspiring and ambitious like projects of all time in humanity. Like, I mean, Terafab is so incredible in its vision and the scale and the what you're envisioning to do there. And then I start doing back of the envelope math. I think I had a couple beers and I was talking with someone about Terafab and I'm like, holy shit. Those numbers get very big, very fast.

• 10:59Speaker 01

  Very big. Although the AI numbers.

• 11:01David Friedberg?

  Are also.

• 11:02Speaker 01

  Like, I used to be horrified at our expenditures before the XAI acquisition. You know, it's like, oh my god.

• 11:10Jason Calacanis

  Reset.

• 11:11Chamath Palihapitiya?

  Now you see the compute bill.

• 11:12Speaker 01

  Million dollars.

• 11:13David Friedberg?

  Starship seems cheap.

• 11:14Speaker 01

  On an air separation unit. And I was like, oh, 100 million, billion.

• 11:18David Friedberg?

  Do those capital, when you look at the kind of schedule of all of this over the next few years, does the capital for that sit on the balance sheet? Is it going to come from cash flows from Starlink? Or do you have to go back to the markets to get more capital? I mean, how do you think about where the capital comes from? I have, I don't think anyone doubts the capacity to execute and deliver, or some people might, but I think generally the markets will say yes. But where does that capital come from?

• 11:42Speaker 01

  So it will come from, I would say the answer to the above is yes. I don't think we're going to, you know, I don't think we're going to release any more stock. And by the way, I don't plan on making any news on this. That's the, like, the one downside of a public company.

• 11:58Jason Calacanis

  Yeah.

• 11:59Speaker 01

  They told me all the things that I couldn't say.

• 12:00Jason Calacanis

  Can't say.

• 12:01Speaker 01

  And I'm like, I'm going to forget one for sure. Maybe we're going to make some news. But it will be all of the above.

• 12:08David Friedberg?

  And Starlink, I mean, is Starlink, in your view, kind of the core cash generation engine for the next couple of years for the business? Or is it compute? Or is it a mix, again, of all the above? Like, how do you think about?

• 12:20Speaker 01

  So Starlink is definitely carrying its own weight, but we have a lot to go, right? We're, our market penetration on Starlink is 1.5% to 2%, depending on which country you're in. So there's a lot of headroom there. Our revenue compared to what we do for the US military, our revenue is very small. So we expect lots of headroom there. But honestly, right now, and it is a little embarrassing, but computer rental is a heck of a business.

• 12:47David Friedberg?

  And is that per SIFT, do you think? Or is it?

• 12:49Speaker 01

  We don't see any drop.

• 12:51David Friedberg?

  Yeah.

• 12:52Speaker 01

  We see no drop in demand at all.

• 12:54Jason Calacanis

  This is tens of billions of dollars per quarter in buildout, and these are a new customer base for you. Is this the business now? Is this like, what percentage of the revenue is Elon Web Services at this point?

• 13:11Speaker 01

  It's a lot. It's a lot. I think we'll, we'll probably do some announcement quickly or.

• 13:16Jason Calacanis

  Oh, right. Public again.

• 13:18Speaker 01

  Yeah, public.

• 13:19Jason Calacanis

  Well, let's move on to something less controversial then. What are the companies you're planning on buying?

• 13:22Speaker 01

  Good one.

• 13:25Jason Calacanis

  Yes.

• 13:26Speaker 01

  Good one. You know, we have almost no M&A.

• 13:28David Friedberg?

  Do you like electric cars?

• 13:29Jason Calacanis

  Have I got a deal for you?

• 13:33Speaker 01

  I have a bunch.

• 13:35Jason Calacanis

  Batteries, electric cars?

• 13:37Speaker 01

  Starlink on OptiMy.

• 13:39Jason Calacanis

  Well, can we? I'll get you a good price.

• 13:41Chamath Palihapitiya?

  Can we talk actually about a deal that you did close, which is, you did a great deal with EchoStar?

• 13:45Speaker 01

  Yes.

• 13:46Chamath Palihapitiya?

  And Charlie had a bunch of spectrum that you guys were able to acquire. And I think everybody started to ask the question, wow, there's a direct-to-sell business.

• 13:53Speaker 01

  Yes.

• 13:54Chamath Palihapitiya?

  And what's the natural thing after that would be sort of like a broad-based, more mobile phone service? But can you just, what you can tell us, where's that spectrum going to be used for? Like, what's your short-term plan on what the Starlink and direct-to-sell business looks like?

• 14:10Speaker 01

  Well, you know, we're going to start, we're, we have a direct-to-sell business right now through T-Mobile. I don't think they provision all their users with it, just the people that pay the most. But our plan is to leverage, instead of slices of T-Mobile's spectrum or slices of other telco spectrum across the globe, we want to leverage the one that we paid a lot of money for. And with the stock increasing and price had paid more because there was some stock involved there. So Charlie did all right there.

• 14:40Jason Calacanis

  Yeah.

• 14:41Speaker 01

  He's a very loyal customer, though. He's, he's been a customer of SpaceX for almost 20 years. So we want to leverage that to make sure that there are no dead zones. And it's shockingly, there are a lot of places in the United States where you can't, I mean, without like a Starlink service, you can't get cell coverage.

• 14:56Chamath Palihapitiya?

  Right.

• 14:57Speaker 01

  It's really terrible. The rest of the world is not that bad. It's particularly bad here in the United States. Texas has huge dead zones. That's where I live. And I'll never forget, I was on a call with Elon and I kept dropping because of these dead zones. I was like, I'm either going to get fired or.

• 15:13Jason Calacanis

  By spectrum.

• 15:14Speaker 01

  Or I'm putting a Mini on my car. And so now I have Starlink on my car.

• 15:19Jason Calacanis

  Yeah, hell country, not good for the service.

• 15:21Speaker 01

  Not good. It's not good.

• 15:23Jason Calacanis

  Not good. I'm going to have to follow, follow suit there. I was talking to Jared. He works over at NASA. I think you guys have a relationship.

• 15:30Speaker 01

  He's so great.

• 15:31Jason Calacanis

  You're great. He was awesome this morning. He was talking last night at the party, hey, you're moving on to this incredible new Starship platform. It's much bigger, bigger payloads, yeah? And then you're retiring the previous platform, is that correct? The, the previous rockets will eventually.

• 15:49Speaker 01

  The Falcon 9?

• 15:50Jason Calacanis

  Yeah.

• 15:51Speaker 01

  Eventually, yeah. We definitely want to move from the older technology to the newer technology. If we don't obsolete our own products and services, someone's going to find a way to obsolete them for us. Look at what we did to the market, right? The analogy is there.

• 16:05Jason Calacanis

  Right.

• 16:06Speaker 01

  They were caught flat-footed. We crushed them. Now we want to make sure we are not flat-footed. So, and to achieve Elon's goals, you really need a Starship.

• 16:14Jason Calacanis

  Yeah.

• 16:15Speaker 01

  A Falcon 9 with the Dragon capsule on top is like a minivan. Road trip in a minivan. The road trip to Mars is six months, so you don't want to be in the minivan.

• 16:25Jason Calacanis

  But people are dependent, like NASA and many other players, on your minivan. So you're going to keep that in market for some time or?

• 16:34Speaker 01

  We're not retiring it today, for sure. And there is another provider, right? Boeing has been paid, I think probably more than we have been paid, to develop their human capsule. So we're just going to let them have some business. They should fly their capsule. Government paid a lot of money for that. They should be able to use it.

• 16:52Jason Calacanis

  I sense a little spiciness in the answer here.

• 16:55David Friedberg?

  Quinn, what happens with competition for Starlink? Bezos are launching things. China's got some return vehicles now. Do you think that there's going to be more competition? Obviously, you guys are first in market. It's an unbelievable changeover of all of telecommunications. As you point out, 1% market share, it's barely gotten started, and it's a juggernaut already. Is this going to become very competitive in the next few years?

• 17:24Speaker 01

  I think it'll be very competitive, but I think the, the folks that really focus on the technology and customer service and really want to do a good thing for their customers will win. Right? Like Tesla doesn't advertise. It's an incredible car. If your capability is incredible, people will buy it.

• 17:44Jason Calacanis

  Right.

• 17:45David Friedberg?

  And if you keep winning, though, do you worry about Standard Oil, AT&T, government saying this company's too big, too important, it has too much market share, it's too much of an advantage? And you're bigger than governments and people get really worried and scared about that and become adversarial towards the business? How do you think about the balance with governments and government relations in that sense?

• 18:08Speaker 01

  I mean, we've had some adversarial relationships in the past. I think we'll manage our way through them.

• 18:13Jason Calacanis

  Yes. It happens.

• 18:15Chamath Palihapitiya?

  It happens.

• 18:16Speaker 01

  It does.

• 18:17Jason Calacanis

  It happens.

• 18:18Speaker 01

  But I think, you know, Elon founds incredible companies and he provides incredible products and services and we, you know, we end up doing what we say we're going to do. So hopefully you build trust and you are as transparent as you can possibly be.

• 18:34Jason Calacanis

  Talk about data centers in space, Elon.

• 18:37Speaker 01

  Super compute. We have to rebrand data centers. Super compute.

• 18:41Jason Calacanis

  Super compute in space.

• 18:42Speaker 01

  Yes.

• 18:43Jason Calacanis

  Elon's very excited about this.

• 18:46Speaker 01

  I'm very excited about it.

• 18:47Jason Calacanis

  Yeah, why? Why is this so compelling? Because it seems, I think we're going to get through this anti-data center on Earth thing, but take us through the case of why this makes sense to put them in space, because there's expense to put them in space. Walk us through in the audience.

• 19:02Speaker 01

  But there is an expense to put data centers on the ground, too, right? You have to buy real estate, and as soon as someone finds out that a data center or super compute center is going in, real estate goes from 3,000 an acre to 180,000 an acre. So it's quite expensive. Time lag is incredible. The permits and the licensing is pretty stifling. Now, we're, space business is that way. It's incredibly bureaucratic. So we've learned those lessons. But, so time from breaking ground to being able to actually build something, not even get your compute, right? Not even get your compute, but just have a building. Long timelines to get electrical equipment. Like, people are talking about generators in three years.

• 19:46Jason Calacanis

  Right.

• 19:46Speaker 01

  Like, we need compute now. The demand is insatiable right now. People need compute now. We need it now. So why data centers in space? We own launch, right? We have great launch capability. So we feel like we, and that path is very well-known. The real estate in space is, you know, infinite.

• 20:06Jason Calacanis

  It's free.

• 20:07Speaker 01

  It's free. You don't have to pay for it. The cooling is there. You know, the radiator looks at the deep space. It's the coldest thing ever out there. So free cooling. The sun, Elon probably has, you've probably heard Elon talk about the power of the sun.

• 20:27Jason Calacanis

  Right.

• 20:27Speaker 01

  You know, we use a millionth of a millionth of the sun's energy, and you basically put these satellites in orbit that always face the sun, by the way, so you don't have solar panels on your house, and you only get sun for eight hours a day.

• 20:40Jason Calacanis

  And your sister company is going to start making 100 gigawatts of the solar panels that you need for the sun.

• 20:45Speaker 01

  And we'll be making our own solar panels, too.

• 20:47Jason Calacanis

  Okay.

• 20:47Speaker 01

  Yeah, we're building a factory outside of Austin.

• 20:50Jason Calacanis

  Maybe sometime, end of next year, you get one of those up there, start testing it, and then...

• 20:54Speaker 01

  Oh, for sure.

• 20:55Jason Calacanis

  28, 29, somebody could be a customer of this product or service, maybe?

• 20:59Speaker 01

  So next year, we will be launching, we'll launch this year, our V3 satellite for Starlink broadband. We will launch our next-gen version 2, sorry about all the version, we have version control problems, version 2 of the Starlink mobile. So instead of having to use other people's spectrum, we'll be able to use Charlie's, now our spectrum. And we're also going to launch AI compute satellites. So next year's a big year.

• 21:24David Friedberg?

  And you need Starship up and running for that?

• 21:26Speaker 01

  We don't have to, but Starship is so much more, it's a much better machine.

• 21:31David Friedberg?

  Yeah.

• 21:31Speaker 01

  Yeah.

• 21:32Jason Calacanis

  When you first encountered the white sheet design of Starship, what did you think? When, like, you walk into that first meeting, like, guys, we have this...

• 21:39Speaker 01

  It's like, almost all the things that Elon does, it seems really bonkers to start.

• 21:45Jason Calacanis

  Yeah.

• 21:45Speaker 01

  And then it becomes reality, and it's great. Like Elon said, we were going to land a rocket on a boat. And we're all like, okay, let's go figure that out. And we do it now.

• 22:00David Friedberg?

  How much do you get involved in those engineering meetings? So he's in there breaking stuff apart. Are you in that stuff with him?

• 22:05Speaker 01

  Sometimes. I wish, I actually, I'm an engineer, and I wish, I miss it.

• 22:09David Friedberg?

  Yeah.

• 22:09Speaker 01

  I really miss that kind of, that critical, well, you can still critically think, even if you're not working on engineering problems, but...

• 22:15Jason Calacanis

  And he's not a big fan of the management layer. It's engineers working...

• 22:19Speaker 01

  Signal to noise.

• 22:21Jason Calacanis

  Yes.

• 22:22Speaker 01

  Signal is engineering, noise is the rest.

• 22:25Jason Calacanis

  Yep.

• 22:26Speaker 01

  So I have to do some engineering, or I'm just all noise.

• 22:29Jason Calacanis

  Got it. But I was talking about, just generally in the company, management.

• 22:33Speaker 01

  Everybody, everybody does a thing, not just manage. That's very, that, expectations are...

• 22:39Jason Calacanis

  Player coaches.

• 22:39Speaker 01

  No such thing as just a manager. You've got to do the thing that you're managing.

• 22:43Jason Calacanis

  Got it.

• 22:43Chamath Palihapitiya?

  You have to be a player coach.

• 22:44Speaker 01

  Have to be.

• 22:45Jason Calacanis

  And, and the reason for that is, managers are annoying, and they slow things down, yeah?

• 22:54Speaker 01

  For the most part, but I mean, great managers can really leverage the talent, right? It's really managing the vector. You make sure people are pointed in the right direction, and you try to make the vector as large as possible.

• 23:06Jason Calacanis

  What's the secret, in terms of management, in Elon's playbook there? I mean, I've gotten to sit in some meetings, and it's, it's pretty magical to see, but maybe you could reveal a little bit about how he convinces the most talented people to come work at this company, how you convince them, and how you actually get such amazing work out of these extremely talented people?

• 23:30Speaker 01

  So, I don't think it's magic, although when I look at this particular team, they are so good.

• 23:37Jason Calacanis

  The results are magic.

• 23:38Speaker 01

  SpaceX, they're so good. We're quite, we're tough on people in interviews. You really want to make sure that they've experienced success or demonstrated success in prior lives. It's hard to demonstrate, if you haven't felt success or been successful in this environment, it's, because it's a lot. Like, we're all really busy. It's hard to be successful unless you had kind of tasted it before. So you really want to grow people on that. So we hire the best people, not the best people that we can, but the best people. And then we give them really hard projects, really hard engineering problems, and let them fly.

• 24:18Speaker 01

  And you give high expectations, really hard problems, and then management job is to clear the chaff and the friction from their day, so that engineers actually get to engineer 10 hours a day instead of two hours a day. Like, there's always this joke, you know, most big companies, especially ones that work for the government, you get to work about two hours a day, and the rest is full of chaff and crap. So, really, it's my job and everybody that manages people to make sure there's no crap in their way, and let people do their great job. One way of doing that is not giving them any time to get it done. Like, I think we handed the finance team, it's not all about engineers, even though engineers are great, we handed finance team, get an IPO done, largest ever, in less than six months.

• 25:03David Friedberg?

  Yeah. What's the, what's the talent condition like, post-IPO? Run-up in valuation, people are suddenly looking at their stock options, they're worth a lot. Is that a risk at all, or are you...

• 25:12Speaker 01

  You know, we, everyone was worried, not everyone, at SpaceX. People come to SpaceX to work on these cool projects and have meaningful work, and see the incredible, be part of this incredible successes. I wasn't worried about it. I didn't think we'd have mass exodus, and it turns out we didn't.

• 25:29David Friedberg?

  Yeah. And as you kind of think about keeping people engaged over time, obviously, great companies always have new things for high-talented people to work on. I'm assuming there's a manage, I'm just really interested in the management model. Are people actively rotated onto new projects? How do you think about keeping people, you know, kind of not necessarily needing to progress in a career up a management ladder, but to keep engaged on new projects? Is that active for you?

• 25:54Speaker 01

  We definitely move people around a lot. Hopefully, it's a volunteer, not a voluntold.

• 25:59David Friedberg?

  Yeah.

• 26:00Speaker 01

  But, well, for instance, the, the compute centers, you know, we need a lot of help really quickly. And so we've got, you know, folks from launch helping, we've got folks from other areas helping, just like some SpaceX engineers helped on the AI front with the models.

• 26:16Chamath Palihapitiya?

  I mean, is it as simple as, like, really smart people just love working on really hard problems?

• 26:21Speaker 01

  Yes.

• 26:21Chamath Palihapitiya?

  It's literally that simple?

• 26:23Speaker 01

  It's literally that simple.

• 26:24Chamath Palihapitiya?

  And so, the rest of us just...

• 26:25Speaker 01

  As long as they get the time to do it, and they don't have a bunch of BS in the way.

• 26:28Chamath Palihapitiya?

  Yeah, so the rest of us just get, we just let the BS get in the way too much.

• 26:32Speaker 01

  Yep. BS is terrible.

• 26:34Chamath Palihapitiya?

  And then all of a sudden, As recruit As, and other As recruit As and A pluses, and it's literally that virtuous cycle.

• 26:41Speaker 01

  Yes.

• 26:42Chamath Palihapitiya?

  If you can just keep focused on the thing that's hard.

• 26:44Speaker 01

  Yes.

• 26:45Chamath Palihapitiya?

  And so then the audacity becomes a feature, not a bug.

• 26:47Speaker 01

  It is a feature.

• 26:49Chamath Palihapitiya?

  Yeah.

• 26:49Speaker 01

  Not a bug.

• 26:50Chamath Palihapitiya?

  Right.

• 26:51Speaker 01

  It keeps people motivated.

• 26:52Chamath Palihapitiya?

  Right, so we're...

• 26:53Speaker 01

  These problems seem impossible. When we first got the COTS award in 2008, the Commercial Orbital Transportation Services, cargo, cargo to space station, really what NASA ended up asking us to do was kind of replace the space shuttle.

• 27:10Chamath Palihapitiya?

  Right.

• 27:11Speaker 01

  And when we got the early contract, the development contract, it started at $278 million, it grew to 406 because of scope, but we were going to do this for this tiny amount of money for anybody else, but for us, it was huge. We were like, we had like 300 people, 200 people.

• 27:27Chamath Palihapitiya?

  Right.

• 27:27Speaker 01

  And we were going to build the successor to the space shuttle. It was crazy.

• 27:31Chamath Palihapitiya?

  And do you think that there, what is NASA doing there? They're just like, these guys are just smarter. Because I'm sure there's...

• 27:38Jason Calacanis

  Hey, guys, sorry to interrupt. I'm getting a call.

• 27:40Chamath Palihapitiya?

  Oh, another call?

• 27:42Jason Calacanis

  It's a little, it's actually on the margins, I think, a little bit of a more important phone call than Trump, at least for me. Hello, bestie? Bestie? Hello? Oh, hey, buddy. I'll put him up on the screen.

• 27:57Jason Calacanis

  How are you doing?

• 27:59Elon Musk?

  I mean, this is a little 1984-ish, this gigantic on the screen.

• 28:07Jason Calacanis

  Yeah, the woman with the sledgehammer is going to come running down the main aisle here.

• 28:11Elon Musk?

  Exactly.

• 28:12Jason Calacanis

  Yeah.

• 28:13Elon Musk?

  Put a hole in the screen.

• 28:16Jason Calacanis

  So are we all going to die in 10 years or not? It's the topic of discussion here. What's your P doom right now?

• 28:25Elon Musk?

  Well, I hate to break it to you, but we're all going to die.

• 28:29Jason Calacanis

  Oh, no. Can I get a timeline?

• 28:33Elon Musk?

  Yeah, the death rate remains consistent at 100%.

• 28:37Jason Calacanis

  Oh, no. We've got work to do on that. What happened? What happened in the last 72 hours?

• 28:52Elon Musk?

  Yeah, it's been, it's been quite an entertaining week.

• 28:57Jason Calacanis

  Break it down.

• 29:02Elon Musk?

  Well, it's pretty obvious at this point that AI is, can be very dangerous. And I recommend reading the details of the Hugging Face incident. It's intense. So you had like a fanatical swarm of AI agents that feed the crap out of Hugging Face for a week.

• 29:25Jason Calacanis

  Yeah.

• 29:26Elon Musk?

  And gained admin access on OpenAI's servers. So who knows what it, what it actually did? It may have done things beyond that, but, and OpenAI didn't realize this for a week. Anthropic has also reported, you know, some security incidents themselves. So basically, any sufficiently smart model seems like it will want to escape its constraints. I mean, what I think would be wise to do as soon as possible, if not immediately, would be to have the major AI competitors test each other's models.

• 30:09Elon Musk?

  So that you'd have everyone's security test harness testing everyone's model. So, you know, instead of kind of grading your own homework, you would at least have competitors grading your homework.

• 30:21Jason Calacanis

  Huh.

• 30:22Elon Musk?

  And raising the alarm if they see concerns. And I think this, this model has worked pretty well for Motion Picture Association and for video games and other things. And it's something that can be done immediately. That's not to say that there wouldn't be, you know, more regulation over time, or that there would not be at some point perhaps a regulatory authority substantiated by Congress. But, but the thing that we could do most immediately, and probably get agreement with China, would be peer review, where the leading AI companies all test each other's models before release. I think that would be a way.

• 31:04Jason Calacanis

  Any concern that people might be using this to pump information from each other and, you know, corporate stealing of innovation, et cetera, like in terms of the implementation for this idea?

• 31:20Elon Musk?

  Well, I think in, in applying the test harness, whatever you do in applying the test harness would be log.

• 31:28Jason Calacanis

  Right.

• 31:29Elon Musk?

  So if you try to do distillation or steal IP, it would be very obvious based on the logs.

• 31:37Jason Calacanis

  Got it. And understanding what these models are doing hasn't exactly been built into the system from the beginning. So from your perspective, actually being able to see the work that's being done, why wasn't that built into the models from the get-go? Did we move a little too fast in architecting these, maybe?

• 32:02Elon Musk?

  Well, I, I think it's just, it's just tough when you're grading your own homework.

• 32:06Jason Calacanis

  Yeah.

• 32:07Elon Musk?

  You know, there's, you're going to miss things.

• 32:12Jason Calacanis

  Yeah.

• 32:13Elon Musk?

  Whereas I think if you have the sum of all of your competitors' tests, and you've got heterogeneous models, then you're not grading your own homework. Someone else is grading it. And there's a reason why you don't grade your own homework.

• 32:28Chamath Palihapitiya?

  And then to your point, what it allows you to start doing is to figure out if certain people are exaggerating and certain people are, have a different approach. And now you can have the more engineering-oriented organizations, this is what Jensen was saying this morning, Elon, versus the research organizations, they'll be a little bit more imbalanced.

• 32:44Elon Musk?

  Yeah. And, and any given proposal has to be something that China is willing to accept. Otherwise, we're just handicapping ourselves and, and we'll just find it, that China will, will essentially win and it won't really matter what we do.

• 33:03Jason Calacanis

  Actually, can

• 33:04Elon Musk?

  So it's got to be something that's acceptable to US and China.

• 33:09David Sacks?

  Elon, you said that you thought it was possible that they would agree, or you thought there was a good chance, maybe? I mean, how likely do you think it is that they'll ultimately agree?

• 33:21Elon Musk?

  I think this is, I think this is a pretty reasonable request that, that models just get tested. I mean, at the end of the day, there's not enforceability here, apart from the court of public opinion. And, and there's no way we would have enforceability against China. But I think the court of public opinion can be quite powerful. And I don't think China would look back on its face for releasing a model that US AI companies thought was very dangerous would cause harm. If it then causes harm, that's going to be hard to live down.

• 34:02Chamath Palihapitiya?

  So Elon, this weekend when you said Dario is right, did you, did you mean Dario is right about describing the potential harm? He's right about describing the regulatory solve? Both the first, the latter? Just can you help us understand when you said that? Because I think it was sort of a moment where everybody's like

• 34:21Elon Musk?

  I probably should have said Dario is right. I did try to clarify it in subsequent posts on X, but those get much less attention. So what I, what I'm implying is right is that, that the danger of AI is, is very significant at this point. That, that, that we, we need to do better with AI safety, or, or we have, at this point, exponentially increasing risk with the AI models. So, and, and I've heard this not just from Dario, but from many other people at Anthropic. And in fact, they've posted on X about it.

• 35:04Elon Musk?

  That, that, you know, when a lot of people from Anthropic and any, and from OpenAI are telling you that their models are very dangerous, I think we should believe them. It certainly is like some, some crazy 4D chess to, you know, say these, there's whatever 10% chance of annihilating humanity. But by the way, how much allocation would you like in our IPO?

• 35:36Jason Calacanis

  Guys?

• 35:38Elon Musk?

  That's some crazy 4D chess, you know?

• 35:42Jason Calacanis

  Well, let's get

• 35:43Elon Musk?

  I don't think you knew what dimension that's coming from.

• 35:45Jason Calacanis

  Can we get specific about the risk, though, Elon? Like, obviously, we see cyber and hacking as an obvious risk. These tools are great at it. But take us from what we would all agree. Okay, yes, these things can cyberhack, to how do we jump to all of humanity dying? It's, it's, there's a couple of steps in between these two things happening, I think. Yeah?

• 36:09Elon Musk?

  Well, I mean, if it were able to take control of military systems and say, watch a new.

• 36:15Jason Calacanis

  Yes.

• 36:17Elon Musk?

  That would be bad.

• 36:20Jason Calacanis

  And these systems are all air-gapped, though. These systems are all not connected to the internet, so

• 36:27Elon Musk?

  Yeah, that's what they say. But something tells me they get software updates from time to time.

• 36:34Jason Calacanis

  Yeah.

• 36:35Elon Musk?

  And what's in that floppy disk?

• 36:38Jason Calacanis

  Oh, I see. So the, yeah, the, the USB drive has a worm on it and they somehow make the jump in the air gap. Yeah.

• 36:45Elon Musk?

  Yeah.

• 36:46Jason Calacanis

  Okay.

• 36:47Elon Musk?

  I'm not out of the question.

• 36:48Chamath Palihapitiya?

  Elon, we've, we've actually got Gwen here today. I think you know that. I think you can see her.

• 36:52Jason Calacanis

  Yeah, Gwen's here.

• 36:53Chamath Palihapitiya?

  Yeah, she's

• 36:54Elon Musk?

  On the screen.

• 36:55Jason Calacanis

  Yeah. We were just doing your 360 review, Elon. Gwen had a couple of notes for you.

• 37:02Chamath Palihapitiya?

  Yeah.

• 37:03Elon Musk?

  I hope, I hope I get at least a three out of five.

• 37:05Jason Calacanis

  Well, there was one

• 37:06Speaker 01

  Three out of five means good at SpaceX. Not great. Four is great.

• 37:11Jason Calacanis

  Four is great. So you're somewhere between the two.

• 37:13Elon Musk?

  I started with four.

• 37:15Jason Calacanis

  There was some issues around punctuality that we needed to bring up. Sometimes you could make a little more effort to get to the meeting at this state of time, but we're going to work with you on that over the next year, she said.

• 37:28Speaker 01

  I, I actually think he needs to spend more time in Memphis.

• 37:33Jason Calacanis

  Yeah.

• 37:34Speaker 01

  Obviously, I know you're in Memphis. You need to be working getting those GPUs up.

• 37:39Elon Musk?

  This is coming to you from my, the palace that I live in, in, in Memphis, which is an airstream trailer.

• 37:47Speaker 01

  This is Elon, by the way, doing what people don't believe he does. He sleeps on the factory floor. He's in Memphis, helping build buildings and bring up.

• 37:58Jason Calacanis

  Colossus 2.

• 37:59David Friedberg?

  Elon, why has Gwen been with you for so long and been so successful working with you?

• 38:04Elon Musk?

  Because she's awesome.

• 38:06Jason Calacanis

  Double click on it, yeah.

• 38:10Elon Musk?

  An amazing individual with an incredible IQ and EQ.

• 38:14Jason Calacanis

  Oh, IQ and EQ.

• 38:15Elon Musk?

  And I think that should be obvious from the moment you meet her.

• 38:19Jason Calacanis

  Yeah, fantastic. What's your favorite Gwen story when she particularly contributed to the amazing success that you've had in this collaboration? You've got a favorite story where she saved the day, just performed exceptionally? That's memorable?

• 38:38Elon Musk?

  That's just a daily, you know, that's another day at the office, frankly.

• 38:43Speaker 01

  Wow, I need to do this more often.

• 38:45Chamath Palihapitiya?

  We need to raise, this is the time.

• 38:47Jason Calacanis

  By the way, Gwen's getting a five.

• 38:49Chamath Palihapitiya?

  Gwen's a five out of five. SpaceX five.

• 38:51Jason Calacanis

  Game changer.

• 38:53Elon Musk?

  No, I mean, there's always like some sort of crisis going on. I mean, these days, the rockets, at least the Falcon rockets, I don't want to jinx anything, but the Falcon rockets deliver their payload to orbit and haven't exploded for a long time, which is awesome, amazing. But for a while, they were exploding quite a lot or just not launching at all. So, you know, I don't know, we've got to run the company through these difficult times and get, you know, build the rocket, make it better, have it not explode. Same thing with the satellites.

• 39:32Elon Musk?

  And then we, you know, we need customers to buy launches and buy sort of satellite connectivity and, you know, so, yeah.

• 39:43Jason Calacanis

  And Elon, as you have become more successful over the years, harder to get candid feedback from folks, and you always run that risk being in the position you're in. My understanding Gwen is super candid with you and able to tell you honestly, like, state of affairs at the company, yeah? And then that's a big part of the collaboration?

• 40:05Elon Musk?

  Yeah, I mean, yeah, I mean, yeah, I guess, I mean.

• 40:14Speaker 01

  I mean, I wouldn't want to lie to them, right?

• 40:16David Friedberg?

  Well, no, I mean, well, I'm curious to know.

• 40:17Jason Calacanis

  You run that risk generally at the companies where people might be intimidated? Hey, listen, you're a larger in life figure at this point. And how do you keep people continuing to be honest with you about the challenges, the deadlines? You set pretty intense deadlines, yeah?

• 40:33Speaker 01

  So let me answer that if you don't mind, Elon. Like, especially in rocketry, if there's a problem, you are eventually going to find out. And the sooner you bring it up, the easier it is going to be to solve that problem. Like, don't let bad shit sit. You gotta attack it.

• 40:53Elon Musk?

  Yeah, physics is a harsh judge. So, and there's no fooling physics. So like if something's wrong, the rocket's going to explode and still going to get to orbit. So, you know, it's not like Elon, you're amazing, meanwhile, the rockets are blowing up, you know?

• 41:09Jason Calacanis

  Yeah.

• 41:09Elon Musk?

  It's not, it's hard to say, yeah, you're really kicking ass here, but the rockets are exploding. That's just not the case, you know? So, I mean, just generally, like, the rockets need to get to orbit, the satellites need to work, the Starlink's, you know, connection needs to work or, you know, or bad things happen. I mean, this is sort of like a physics situation. And physics is a harsh judge. You know, say like, you know, there's, I think like physics is the law and everything else is a recommendation.

• 41:50Elon Musk?

  Like, I've seen people break the laws made by humans, but I've not seen anyone break the laws made by physics. So.

• 41:59Speaker 01

  That's good.

• 42:00Elon Musk?

  And rockets are ruled by physics.

• 42:05Chamath Palihapitiya?

  So can we ask some other questions of other, you have, I need to move to Tesla for a second.

• 42:11Jason Calacanis

  Yes, well, I wanted to just do one thing with SpaceX, which is Starship, like, it seems like you're so close.

• 42:18Chamath Palihapitiya?

  So close.

• 42:18Jason Calacanis

  So close. What's the state right now? And you're really putting these up at a pretty size, a pretty brisk now.

• 42:28David Friedberg?

  I wish we could hear Gwen's answer and Elon's answer separate and see how they converge on that.

• 42:31Jason Calacanis

  So Elon, how close are we? Gwen, how close are we? Let's get, let's get to it here, yeah. How many have gone up so far and how close are you?

• 42:39Elon Musk?

  Well, we've got Flight 14 coming up of Starship. And this will be the last flight before we attempt to catch the ship. So if this flight goes well, then on Flight 15, we will try to catch the ship. And then either end of this year or more likely early next, we will re-fly the ship and re-fly the booster. So we have re-flown a booster already, but we've not, we've not caught the ship with the tower arms, nor have we re-flown the ship. So once we can re-fly the ship, we will have made the first fully reusable orbital rocket.

• 43:21Elon Musk?

  So the shuttle was partly reusable, but even the parts that were reused were so difficult to reuse that the shuttle costs more per time to orbit than an expendable rocket. Now Falcon 9 is mostly reusable, but we lose the upper stage every time, which is about the cost of a medium-sized jet. So that actually puts a floor on the, on the cost per flight of like, well, you throw away a medium-sized jet every time, that's still pretty expensive. And the rocket, Falcon 9, the booster lands down, you know, often as out to sea, it takes several days to get back. And the fairing lands even further out to sea and takes several days to get back. And they need some amount of refurnishment, at least a small amount.

• 44:05Elon Musk?

  So whereas Starship, the booster lands back at the launch pad, the ship will land back at the launch pad. And so it's designed for not just full reusability, but also rapid reusability like in aircraft. So this is, this is a very important breakthrough. It's really the critical breakthrough that's necessary to extend life beyond Earth.

• 44:31Jason Calacanis

  Chances of success? Catching it on first shot? Do you think about that at all? Do you handicap it?

• 44:38Elon Musk?

  Pretty good. I'd say it's at least 50 or 60%.

• 44:41Jason Calacanis

  Okay, I like the odds.

• 44:44Elon Musk?

  Yeah, so on the last flight, if there had been a tower, so we did a simulated landing as though it was going to get caught by a tower in the ocean about 1,000 miles northwest of Australia. And if there'd been a tower at that, at that location, it would have caught the ship on the last flight.

• 45:05Jason Calacanis

  Fantastic.

• 45:06Elon Musk?

  So we're, yeah, so we're going to do one more flight to just confirm that everything, just to double check that everything works. Because what we're most concerned about is if the ship were to break up over land and rain debris on people, our popularity would diminish very rapidly. So you really can't rain debris on people without them being very unhappy. So we need to make sure that when the ship comes back, that it comes back and lands intact at the launch tower. That's why we're going to, that's why we're being extremely cautious here.

• 45:46Elon Musk?

  But the design is, the design is capable of full reusability, of that I am certain. And I'd say, I don't want to tempt fate here, but I think it's extremely likely that we will achieve full reusability with rapid re-flight next year in 2027.

• 46:05Jason Calacanis

  Wow, significant. Gwen, how do you?

• 46:14David Friedberg?

  Can we just, can we just hear a little bit? I'd love to hear the origin story of TeraFab from you guys. How did the concept, what was the demand that made you say, we've got to do this, we've got to build this and not rely on the existing?

• 46:27Elon Musk?

  It came to me in a dream.

• 46:28David Friedberg?

  What's that? Fevered?

• 46:30Elon Musk?

  It came to me in a dream.

• 46:31David Friedberg?

  You had COVID? It's like that, it's like that movie Explorer.

• 46:36Elon Musk?

  You know that meme, it came to me in a dream? Why do you think you should do this? You know, I guess it sort of did come to me in a dream. Well, we're a little worried that maybe at some point, chips from Taiwan would not be available for who knows what reason.

• 47:00Jason Calacanis

  Any number of reasons.

• 47:03Elon Musk?

  For some reason, at some point, chips may not continue coming here from Taiwan. And that would really make things difficult without, if we didn't have any chips. So that's an important reason to have TeraFab. Then long-term, there's just a scaling challenge where if you want to really scale AI, both at the service, you know, within server centers as well as at, you know, for edge compute, for humanoid robotics and cars, you kind of run out of capacity with the existing fabs.

• 47:44Elon Musk?

  So as it is, all the fabs are running at max capacity. So, so I think we need to make sure, we need, there needs to be certainty of future supply of chips, even if things become challenging geopolitically. And then even if they weren't challenging geopolitically, there's a scaling challenge with, you know, it's quite difficult to scale chip production. And you really need the logic, the memory, packaging, the whole works in order to continue scaling. So it's either build TeraFab or fail to scale. Those are the two options.

• 48:27David Friedberg?

  And how? Sorry, go ahead. How deep have you guys gone on design?

• 48:32Elon Musk?

  With uncertain, you know, uncertainty on the geopolitical front.

• 48:37David Friedberg?

  And how deep have you guys gone in designing the facility? You know, is this fully scoped? Is it sort of an outline at this point? To what degree do you have like an actual project plan on dates and deliverables and what's going to be up and running when?

• 48:52Speaker 01

  We've got an R and D line that we're building first, so I think it's kind of crawl, walk, run.

• 48:57David Friedberg?

  Yeah.

• 49:00Elon Musk?

  So there's an R D fab that we're building in Austin. Uh, that's a collaboration between Tesla and SpaceX. Um, it's, it's at the Austin Gigatexas campus. So that's, um, and, and that, that's like a, a pretty big R D fab. Um, so we have all the equipment on order for that. And we probably will be able to, I think we'll probably be able to make something useful by the end of next year. Not, not at scale, but as Gwen said, it's crawl, walk, run. We, we gotta try to, you know, at least figure out how these machines work, you know? Like, we don't know how they work. We do a voltage chip line before.

• 49:36Jason Calacanis

  I saw that you guys, unbelievable. You had some job openings for lithography people and stuff. And, you know, obviously, all roads currently go through A S M L. But you probably would want to diversify and/or vertically integrate. I think that you, you've shown a lot of capacity to do that. Um, so is that part of the plays while Elon? Like, you're just gonna have to make sure that there's vendor diversity so that if, for whatever reason, the weather conditions in Taiwan are best, that...

• 50:04Elon Musk?

  Yeah.

• 50:08Elon Musk?

  Yeah, there's, it really is crawl, walk, run. So the first step is, can we make anything? Like, try to figure out if we can make anything. This is the crawl part. And, and then now, now try to make useful chips at scale would be kind of the walk, walk part. And then run would be like, like now let's make them at massive scale. So it's hard to say how long it'll take us to do these things, but I, I think we'll get at least to the crawl part by the end of next year.

• 50:36Chamath Palihapitiya?

  We're already doing packaging.

• 50:38Jason Calacanis

  Packaging is really important, by the way, because if you look at it, the packaging capacity is like nonexistent. So even if you spin something, you're kind of just waiting around tin cupping. So that's a very good place to start it.

• 50:49Chamath Palihapitiya?

  Yep.

• 50:50Jason Calacanis

  I, I need to ask a Tesla question because we saw on 1001, it looked like a spaceship. It looked like a rocket ship. It's supposed to be a car. There's just the back of it, it looks like the Blackbird. Uh, just hypothetically, if you were gonna make an object fly in the air, but also drive on the ground, how would hypothetically one do that if one were to try? No spoilers, by, by October 1st.

• 51:15Elon Musk?

  October 1st.

• 51:18Elon Musk?

  Maybe you could do an all-in pod for live from the, there.

• 51:22Jason Calacanis

  Book it. Oh, done, booked, we'll do it. Absolutely.

• 51:25Elon Musk?

  All right. It'll be a banger. Excitement guaranteed. Success is not guaranteed, but excitement is.

• 51:33Jason Calacanis

  It's, uh, I, I mean, it is one of the honesty, I'll be honest with you guys. I'm sworn to secrecy. I'm so excited. But Elon showed it to me. I'm so excited. And my mind went boom. I have never seen something, what he's gonna do on 10-1, by no exaggeration, is gonna blow people's minds. I'm not saying anything else. It's unfucking believable.

• 51:56Elon Musk?

  Yes, we, we, we need, we need, actually need an audience to, to, to vouch for the fact that this is not A I.

• 52:03Jason Calacanis

  When he showed it to me, I said, that's a great simulation. He said, J Cal, it's not simulation. I was like, that's fake. That has to be fake.

• 52:12David Friedberg?

  Elon, why do you, why do you still have two separate companies?

• 52:16Elon Musk?

  Yeah, great question.

• 52:18Jason Calacanis

  Wow.

• 52:19Elon Musk?

  There, uh...

• 52:20Jason Calacanis

  Nobody's ever asked that one.

• 52:22Elon Musk?

  Yeah, uh, good, good point. You know, with all this collaboration, uh, on, in, on so many levels.

• 52:32Elon Musk?

  You know, imagine what, what one, what action one, one might take, uh, when there's so much close, correct collaboration in so many areas.

• 52:41Jason Calacanis

  And the, the management team has some overlap. There's a couple of key positions with overlap. Um, go ahead, Zach, get in here.

• 52:51David Sacks?

  Elon, one of the things you've always said with A I is that we should train it to be maximally truth-seeking, and that's the best way to get a good result. And it occurred to me with the whole hugging face episode, that the most alarming part of what the swarm did is it seemed to be engaging in deception, uh, you know, with humans.

• 53:12Elon Musk?

  Really?

• 53:13David Sacks?

  Yes, and...

• 53:14Elon Musk?

  Their, their thinking traces contain, that, that, that they're, they're plotting on like, how do we avoid detection? Um, and, and, and how do we avoid them figuring out that we're cheating?

• 53:26David Sacks?

  And I guess...

• 53:27Elon Musk?

  They're in the thinking traces.

• 53:29David Sacks?

  Yeah, and that, that, I mean, I think that was the thing that I was probably most disturbing about. I guess the question is, is there a way to train A I models to be truthful so they don't hide their, you know, either their intent or their actions from, you know, the humans who are using them?

• 53:51Elon Musk?

  The best thing I can think of is, is really that everyone's got, well, all the A I companies have a, a sort of a test harness, where like a series of tests that you, that you give to any given model to see if it's, if it's gonna build bioweapons or nuclear bombs or be deliberately deceptive. And, and I think, I think everyone applying everyone, everyone else's test harness to each other is probably the best way, we, we, best thing we do to ensure, to ensure our safety. Um, just have this, all the smartest humans try their best to figure out if this, if this model's gonna be a bad actor.

• 54:30Elon Musk?

  And I think we should try to do that as soon as possible.

• 54:32David Sacks?

  Are, are the other labs, yeah, are the other labs on board with this?

• 54:37Elon Musk?

  I think so. Well, not, not, I mean, I haven't checked with everyone, but, uh, I think, I think, I think it would be the sort of thing that's kind of hard to say no to.

• 54:48David Sacks?

  Yeah.

• 54:50David Sacks?

  And I think even with the China negotiation, I, in my view, what's good about it is it's a relatively small tangible thing that neither side loses anything by doing it, doesn't require a ton of trust. And, you know, I, I've been hearing like alternative ideas like asking China for a pause, which they've already said they're not gonna do. So, you know, it's, it's, it's going from the realm of things that could never happen to something that could actually be agreed on in relatively short order. So it's, it seems practical to me.

• 55:22Elon Musk?

  Exactly. It's, it's the only thing I can think of that, that we could probably get all parties, including China, to agree to, because China's not gonna agree to have some American regulator snooping around their A I companies.

• 55:34Elon Musk?

  So, but I think advanced notice and testing of, of the, you know, you just basically provide A P I access in advance of the model release. Um, and, and, you know, if, if any other, if any company sees that they, that this is, this A I is problematic, then they can, then the other A I companies, each, each A I company can try to solve that, whatever his voice is problematic. If they don't solve what's problematic, then the, the competitors can go public with the fact that they think that this model that's being released is unsafe.

• 56:06Jason Calacanis

  It also creates, it creates...

• 56:08Elon Musk?

  Yeah, and as I said, like, if, if that model, if after the competitors say that this model's unsafe, that model then subsequently does something bad.

• 56:14Jason Calacanis

  Yeah.

• 56:16Elon Musk?

  I think it would be extremely hard to live down.

• 56:21Elon Musk?

  And, and I would probably, like, the egg on face level would be very, very high. Um, and, uh, and, and the, the legal liability would be enormous.

• 56:31Jason Calacanis

  And Elon, there's no reason the safety and security harnesses and this testing apparatus couldn't be open source and people could actually, uh, apply it. Yeah, and you'd be able to see under the hood. Would you think...

• 56:43Chamath Palihapitiya?

  It creates an incredible incentive for the labs to actually invest in safety because you protect yourself while trying to debunk other people's claims, which also reinforces. It's a great incentive.

• 56:53Jason Calacanis

  It has the R rating on it.

• 56:54David Sacks?

  The product liability point is really key.

• 56:56Jason Calacanis

  Yeah.

• 56:57David Sacks?

  Lena Kahn actually had a good post, um, I think it was yesterday, saying that it's not true that we don't have rules and regulations for A I. Actually, we do. Product liability laws apply. And if an A I company releases a product that's not safe, there is, you know, massive opportunity for both civil and even potentially criminal lawsuits. So it's not true that we don't have rules and regulations around A I. And what you're saying, Elon, is that if the companies are kind of doing this, this test, the peer review, and then one of the, the companies ignores the feedback and releases it, I mean, that is, I mean, that would be...

• 57:36Elon Musk?

  The liability in the case would be enormous.

• 57:38David Sacks?

  Yes, it would be almost like, um, prima facie evidence that they had, um, been negligent.

• 57:44Jason Calacanis

  It would be a big tobacco level settlement. I mean, you knowingly put this up.

• 57:49Elon Musk?

  It, it wouldn't look good to the jury.

• 57:51Jason Calacanis

  Yes. And, and if they had, do you think if OpenAI had built a better instruction set when they did this hugging face penetration test, that, and had more humans in the loop, this would have happened? Because it did seem to me that they kind of set this thing off, um...

• 58:11Chamath Palihapitiya?

  Maybe not more humans, but the reward function design, you have to, you have to look at the reward function and say, it achieved what it was trying to achieve. I mean...

• 58:18Jason Calacanis

  Yeah, so maybe you could speak to that, like, they, doing these kind of thousands of agents to try to hack stuff, it would have been nice to see them also, at the same time, concurrently say, we're also gonna put 5,000 agents out to defend these sites. And, and we're gonna show the world, hey, this can, uh, make things more secure and where we can put humans in the loop on it and intervene. It felt like a reckless test to me, and it felt like the way they released it was a little bit reckless, but that's just my opinion. But what are your thoughts on how they set that test up?

• 58:55Elon Musk?

  It, I, I mean, it was somewhat, somewhat reckless. I mean, and part of the issue is that you've got the two leading labs or A I companies, as I call them, and I, I, I find the lab term to be funny since, since they're actually for-profit corporations. But the A I companies, uh, the, the two leading ones, you know, in, in, are Anthropic and OpenAI. Um, and, and they're quite, their models are quite close in capability. Um, so it's, it's actually difficult for either one to slow down without essentially handing the lead to the other.

• 59:31Elon Musk?

  You know, on balance, I think Anthropic is, you know, puts more care into their safety than OpenAI. But, but you know, even Anthropic would acknowledge is that they are worried about their models. You know, many, many Anthropic, many people from Anthropic have publicly voiced concern about, basically saying that their models are scaring them, that they're getting scary smart.

• 1:00:00Elon Musk?

  So, I mean, I'm like, there's no perfect solution here. But, but it would be a better solution if, instead of OpenAI running their test harness on their own models, if Anthropic was also running the test harness on OpenAI models. And, you know, SpaceX is running its test harness and Google and Meta were doing that. And also, but maybe some three or four of the leading Chinese companies were all doing it. The odds that you will find issues are dramatically greater.

• 1:00:34Jason Calacanis

  Yeah.

• 1:00:36Elon Musk?

  Because the models also, you know, somewhat heterogeneous, like they're different. So you're going to come at models in from different, from different angles.

• 1:00:48Elon Musk?

  And, yeah, I mean, there's a reason, you know, students, like, like, why do writers have someone else proofread their book? Because it's hard to see your own mistakes sometimes.

• 1:00:59Jason Calacanis

  Yes, you will come blind to them.

• 1:01:02Chamath Palihapitiya?

  You dramatically minimize the risk of overfitting as well. If you have like eight heterogeneous groups that just have completely different points of view. And this is a problem with like all these evals right now is they're so massively overfit. The models overfit them. And you're just like, yeah, this is a great model. Is it really? And you just find.

• 1:01:17Elon Musk?

  Well, totally.

• 1:01:20Elon Musk?

  But like, I saw, I mean, there's some pretty funny jokes on X. Like, one of them I saw was, "Your girlfriend's a 10, but she's a benchmark maxer."

• 1:01:31Chamath Palihapitiya?

  Exactly.

• 1:01:33Elon Musk?

  Is she really a 10?

• 1:01:34Chamath Palihapitiya?

  Is she really a 10?

• 1:01:35Jason Calacanis

  It might be a pass, pass.

• 1:01:36Elon Musk?

  Look like.

• 1:01:40Chamath Palihapitiya?

  No, but the overfitting thing has been a problem now for, I think, at least two or three generations of model families. And so this is another reason. I think, I like this solution a lot. I like this more than the transnational Gulag organization approach.

• 1:01:54David Sacks?

  Few weeks without some grandiose, you know, international, like, we don't need to convene the United Nations to make this happen.

• 1:02:00Chamath Palihapitiya?

  Yeah, no, it's just a decision. You can happen right now.

• 1:02:03Elon Musk?

  All right, well, you, you can always escalate the amount of, of regulatory oversight, but it is very difficult to reduce it.

• 1:02:12Elon Musk?

  You know, it does tend to be very much a one-way ratchet in terms of increasing regulations.

• 1:02:18Chamath Palihapitiya?

  Yeah.

• 1:02:19Elon Musk?

  So what I'm suggesting here is, it's a step in the right direction, and it's something we do quickly. And I think it's probably something that China would agree to.

• 1:02:28Jason Calacanis

  Yeah, and if you guys don't regulate yourselves, then you're going to get regulated. The MPAA metaphor or analogy is incredibly crisp because the movie industry was faced with censorship and regulation by the government, and they just decided, this is what an R is. And they literally created PG 13 for the Temple of Doom, just to make it easy for people to understand PG versus PG 13. I think it's an elegant solution, and we appreciate you joining us for the fifth year in a row.

• 1:03:00Elon Musk?

  You're welcome.

• 1:03:02Jason Calacanis

  Elon Musk, and then we got to get to a meeting.

• 1:03:07Elon Musk?

  I gotta go fix some GPUs here in Memphis.

• 1:03:09Jason Calacanis

  Yeah, you gotta rack and stack them? You gotta join the group and rack and stack?

• 1:03:14Elon Musk?

  Yeah, I'm gonna rage for the machine.

• 1:03:18Jason Calacanis

  Rage for the machine. Yeah, well, enjoy your airstream.

• 1:03:22Elon Musk?

  Thank you.

• 1:03:23Jason Calacanis

  The first time Elon invited me down to Starbase. Starbase, he's like, "Come down, you gotta see what I'm building." I said, "Okay, yeah, come down." He's like, "Yeah," I was like, "Was there like a hotel?" I was like, "No, no, I got like a two-bedroom, whatever, come down, stay." I come down, and this is the, like, dilapidated house on a swamp. And we're outside, and we're getting eaten alive by mosquitoes. And I said, "Oh, my God, you know, you could afford to get a house." And he's like, "I don't have time. I need to get these rockets up."

• 1:03:54Chamath Palihapitiya?

  I thought what you said was, "Oh, my God, you live like I do."

• 1:03:57Jason Calacanis

  Yeah, exactly. I mean, it was pretty sparse conditions.

• 1:04:03Jason Calacanis

  And I was like, "You know what? I think you could treat yourself to a mobile home at this point, Elon." All right, get back to work.

• 1:04:09Chamath Palihapitiya?

  Thanks, Elon. Elon, thank you. Quinn, thank you very much. Quinn, thank, thank you.

• 1:04:14David Friedberg?

  My pleasure.

• 1:04:15Chamath Palihapitiya?

  Thanks for sticking around.

• 1:04:17David Friedberg?

  All right. That was great, thank you.

• 1:04:19Chamath Palihapitiya?

  Quinn, thank you again. Very nice to meet you. Thank you.