What up, Hyperchange? Welcome to another episode. We've got the legendary guest, Tesla Larry, back in the hot seat. Um, I wanted to pick his brain on his epic idea for the Tesla share swap, consolidating Musk economy empire. This is, I think, kind of not only a very interesting move to in to contrast the SpaceX IPO potentially, but also gives us insight into how much cash Elon's companies will need and the future sort of the financial engineering that goes on behind his empire. So, very fired up to dive into this. Um, so Larry, you put together a little presentation for us here. Um, maybe walk us through what we're looking at. >> Sure. So if you look at the first slide um after the introductory side if you can bring that up GI. >> Mhm. I mean what what's motivating me to talk about this is the kind of capital requirements uh that we're talking about um needed by the musk companies in the coming couple of years if Elon is serious about the projects that he has muted and you know we know that Elon is always serious so what are the projects that we're talking about we're talking about orbital orbital compute. And so that's all about putting satellites kind of like Starling satellites but in a slightly more slightly different orbit from the current Starling satellites but into an orbit where they're always going to get sunshine and that sunshine is going to be their power. So we we did a back of the envelope calculation on orbital compute and how much capex they'll have to spend. And if we want to scale uh really to the kind of levels that Elon is talking about the numbers look like something like a hundred million per gawatt. Um, and if we scale uh 100 billion, that should read actually, excuse me, 100 billion per per gawatt. If we scale to 7 gawatt, that would be $700 billion of capex, that's a very formidable amount of capital. I mean, go ahead. >> Yeah. Yeah. So what I guess the key thing that you're saying here is even if SpaceX were to raise hundred billion that wouldn't necessarily be enough for the capex requirements for all of Musk's empire. So you're like wait let's instead of the SpaceX IPO let's do this share swap because there's way more capital raises and Tesla this consolidated Tesla because they have more assets and they're a bigger company will have an easier time accessing the capital market. So, can you dive in a little bit more on like the why behind this and what >> the why is that the amount of capital that orbital compute, Gigafab, the Cyber Cab fleet, the Optimus fleet are going to need is getting to the trillion dollar level. And right now, the cash flow from any one of them is a little bit down the road. There there's a timing for each of these cash flows against the capital spend, but there's an enormous amount of outlay between then and now. So you may get good cash flow. For example, Starlink is flowing about 5 billion a year, getting to that order of five billion a year. We have the car company flowing to about two billion, you know, a quarter and maybe a little bit less in the fourth quarter of this year, but or maybe zero in the fourth quarter of this year, even negative. But typically in a quarter, they're going to flow about $2 billion. So that's 24 billion a year. Um, but other than those two flows, that's about it in terms of sizable cash flows. But we're talking about, you know, an investment that could be as much as a trillion dollars across all of the of all all of these projects. And the the real problem is there's always some cash required for each one of these projects. Some cash is required by each one of the components of the company of of the total masony. So how to balance that cash flow and the cash needs and the credit capabilities of these different entities and the the whole the sum of the whole is greater sorry the whole is greater than the sum of the parts. So if you put these together, you'll have a much stronger case to be made for raising this kind of capital and for um uh normalizing the cash flow from the various entities into the cash needs. At the at the bottom of this is it eliminates the problem of the conflict between these companies both as to cash needs cash flow but also in terms of interests of the parties and the use of the the resources the personnel the technology and so on. So when you consolidate them, you create an entity that has much greater leverage in the capital markets. It has much greater means to move that capital around between them and so on. Unfortunately, you can't just put them all together because I don't think Elon would end up with control of the end entity. So I think you have to start by acquiring Tesla, acquiring all these other companies at least a proportion of the stock that leaves Elon in control of the sub uh of of the subsidiaries but also gives Tesla a meaningful stake in all the subsidiaries. Does that make any sense? >> Yeah, totally. And it almost feels like now's the perfect time to do it with the timing. And I I really like your statement of like there's all these different projects at once. If we kind of roll them up into one, all the bumps kind of get smoothed out and it becomes a lot easier. So I I've kind of been wondering, okay, well, if Elon got this idea for data centers in space, this is going to require a ton of capital. Um why didn't he just raise it in the private markets? What is it that because it's hundreds of billions and that would be ridiculous to do privately or so is he kind of insinuating? Yeah, >> it's way way I mean the answer is very simple. I don't mean to interrupt you, but go for >> when you're talking about when you're talking about hundreds and hundreds of billions of dollars tending towards the trillion dollar mark, the private markets would never be able to support that. >> It would just be impossible. This way you can access the public markets, the very deep public markets in the United States, but also the public markets across the world. >> Yeah. So you you're talking trillions instead of billions in the public markets. >> So in some ways then if we play that out then it's like okay well the reason why he's IPOing is because Elon's decided he needs a h 100red billion or plus in capital. And so if you're deciding to take on that much capital you must have a smart way to spend it. So, I'm kind of curious of what's changed. If I thought the limiting factor for SpaceX was getting Starship to work, but it's almost feels like he's thinking two steps ahead if it already works. We're already thinking about building the capex to get Starship going. And if you think about Elon moving fast, like trying to go as fast as possible, it's essentially like, wait, like if it's going to take us this much time and money to build Starship and more capital is the bottleneck, then why wouldn't we just raise more capital? It's kind I'm trying to put the two and two together of like why now did he decide capital was the bottleneck because up until now it almost felt like it wasn't. >> Okay. Because the plans have just exploded. If you I mean you were at the um annual the shareholders meeting with me uh just a few months ago. At that at that meeting he talked about orbital compute. He talked about the Gigafab and he talked about the Cyber Cab fleet and he talked about the Optimus fleet. Add that together, you get to a trillion dollars of capital requirement. Think about, and by the way, that doesn't include Starship. That doesn't include capital for Starship. I haven't added, you know, a thousand 10,000 Starships to this total and I've got to a trillion dollars. 10,000 starships >> at, you know, at $5 million a starship, you're at $50 trillion, five $50 billion. So, I mean, you the the capital requirements far far outweigh anything he's talked about. So if you look at just SpaceX, Starlink and Starship just that SpaceX would do fine going to going to the markets going public and raising 30 to50 billion they'll do fine. That covers that covers Starship and and Starlink is already producing5 billion dollars a year. They're going to go to 10 billion dollars next year. They've got the cash flow that will keep SpaceX churning along until you add orbital compute. So, who's going to finance the orbital compute? Is it going to be Tesla or is it going to be SpaceX? My argument is that neither one of them can bear that weight fully. It has to be both of them together. >> Wow. And what do you think Elon's thinking about this? like if he looked at this proposal, what do you think his reaction would be? >> I don't think Elon will react well to this proposal. Elon doesn't like finan what he considers to be financial engineering. Elon likes simplicity. In his mind, SpaceX is SpaceX. Tesla is Tesla. And he looks at the worst case condition. you know, Tesla could go bankrupt, SpaceX could go bankrupt. He doesn't want the one to impact the other. And that's a fair point of view. That's a very fair point of view. That is the argument against this. The argument for this is if he really wants this program of orbital compute, Gigafab, CyberCab fleet, and Optimus fleet, he has to think much larger than either of these two companies can think. he has to work a scheme that ultimately brings them into a single company. You know, they are in fact if you look at Elon's personal balance sheet, they're a single company. The problem is he doesn't have access to the cash flows of each company. He only has access at the share share ownership level >> and that gives him far less flexibility. I'm looking to the future and the flexibility he's going to need both in uh deploying the cash flows and in uh implementing the plan. So you know if let's assume Tesla generates huge cash flows but SpaceX doesn't he can't move the cash flow from Tesla into SpaceX at this point >> and vice versa. >> That's that's a good point. He would all have to do like a separate investment of now Tesla's officially giving the cash to SpaceX somehow. >> Yeah. And then you'd have to figure out the terms and conditions and so on and so forth. And it'd be a lot easier if SpaceX were in fact a subsidiary of Teslas. Well, and the one thing that to the argument of simplicity seems like if you have the kind of Bank of Tesla essentially doing all the capital needs, isn't that a lot more of a streamlined of a process than every single company doing these capital raises in their own little silo? In some ways, >> it could be argued both ways, but I think if you combine the three, the five actually, you get a much much more vigorous capital base. you get a much more um uh what is the word malleable capital base. You get a you get the kind of structure that you can move the pieces around with much greater ease than if you have five separate companies. Right now there absolutely no argument ma to be made for moving any assets from stalling to Tesla or any assets from Tesla to XAI. combine the companies or at least make each company a subsidiary if not wholly owned subsidiary but a subsidiary of Tesla then the movement of personnel and and capital between the companies becomes much more e much easier and it makes the whole structure much more malleable. Can we dive into why now is such an interesting time for this proposal especially with the the voting rights essentially because I think that would be that control is obviously on Elon's mind on everyone's mind is like we don't want you know Glass Lewis to be running this company or whatever some proxy firm so walk us through a little bit of your thinking here you've managed to at a high level come up with a way where Elon can keep 50% control over all his companies I guess except Tesla um >> which would be essentially almost better than he has now in some ways. Is that even right? >> No. Uh let me re let me re um pause that. Look, right now he's got about 20 less than 20% of Tesla self and he has absolute control through golden share in SpaceX and he has absolute control of the other companies through his majority. >> So he learned and went through super voting with SpaceX is he was like I want to do a separate class and is SpaceX the only one that has this this super voting class? The answer is I'm not sure what the voting structure is of Neuralink or Boring Company, so I can't answer that. But but here's the thing. He's got such a large percentage of Neurolink and Boring Company that I don't think it makes a big difference. However, he could sell enough of Neurolink Boring Company and SpaceX into Tesla to make Tesla a if not a controlling shareholder, at least get it to the point that it has to consolidate those companies into its balance sheet. and he can still retain control of them and that would boost his shareholding in Tesla by at least two and a half to three uh points which would put him within within shooting distance of 25% of Tesla such that he only has to hit two of the milestones of his uh of his plan rather than five milestones of his plan. So he could be in control of Tesla within 2 years rather than 5 years time. >> Ooh. >> So >> and eventually own more. Eventually he could go beyond 25%. >> To 30 30% is my estimate. Yeah. So this and by the way that also gives him the opportunity of selling the balance of those companies uh to Tesla and getting up to a 50% mark. So I I mean it it's very >> ooh >> on p on paper and in theory it sounds very delicious. I mean it could also go the other way. I mean one of these companies could go bankrupt and it could >> Yeah. >> If if I'm getting this right. Okay. So then let's say Tesla has a stake in takes a huge stake in Neuralink. Neuralink gets huge. >> Then Tesla could buy the rest of its then Tesla buys out the rest of Neuralink. But Elon Musk owns so much of that that he would then increase his ownership in Tesla. >> Yeah, that's the plan. That's the plan. >> So he could go How high could he get of Tesla if if all this works? >> I think the big the big opportunity is SpaceX. I mean ultimately it could be argued that he could sell his control, his golden share and control of SpaceX. I think SpaceX is the one that's going to grow bigger and faster than anything else. >> Yeah. >> And and so he only relinquishes his share in SpaceX when it will, you know, secure a 50% or or a meaningful such a meaningful stake in Tesla that he becomes al you know absolute control of Tesla. This is a kind of I don't want to get us onto a tangent, but I just thought of this and this is uh one of my friends, shout out to Aiden, had this interesting comment that was like what happens post Elon or if anything happens to Elon because he's set himself up as such an influential shareholder that what happens with his shares is like super duper I don't know. It's just like everything relies on that. So, do we have any idea what his plan is or how that would even work? Yeah. So, you know, Elon has put a fairly significant uh number of his shares into a trust and so it's, you know, we don't have any visibility into the governor into how he has how he has planned the governance of that trust when he passes. But um our experience with Ford and you know Howard Hughes and other mega uh billionaires trillionaires uh what is the equivalent of trillionaires today is that you know you pass the control of the company in Ford's case he passed the control to the family and it's quite possible you know Elon has got a very a large number of children. >> Yeah, >> some of them are are extremely bright and extremely capable uh to my knowledge and uh it seems that they would several of them would do very well running the company. You know, I I keep thinking about my my hero um Edison. He passed his company on to his son. his son didn't do very well with it and yeah and the company dribbled away but Elon has got you know he's got some really capable sons and and daughter and you know he's got a couple of them that are still very young so time will tell but it seems that um that would be the way I would go if I were him >> I would trust my lineage more than I would trust some third And if you're speaking strictly from like a Wall Street angle analyzing that situation, what do you think happens? What is the market's interpretation of that? Is it >> I feel like it could get rocky and pretty crazy, >> especially if Elon keeps shooting for the moon. That's what I keep thinking. Like he keeps every time he's always got a project that's 20 years ahead that he's working on. Yeah. >> And so the chance of those projects being succeeded without him is like zero in my opinion or I I would immediately assign it to zero. You know, >> they would be zero if the company was placed in a trust and some you know >> somebody was appointed to run it. >> Yeah. But if it were if it were entrusted to a family member that he felt or a group of family members that he felt comfortable with that shared his vision then I think it would probably be quite possible for it to continue. You know he he comes from a remarkable family and his children are remarkable children. So it's more than possible. It's more than possible that they could carry the, you know, carry the torch forward. More than possible. >> Is there any precedents in history where someone has built this big of an empire kind of >> Rockefeller? Rockefeller. >> And that I'm going to look like a real amateur here, but was that the oils and then they got that? They had to, you know, break those up essentially. >> Yeah. But but but the Rockefeller family still maintained control of Exxon, you know, into into second generation. >> Yeah. But they broke it up is in into Chevron, too, right? Or something. >> Oh, they broke it up into seven into the seven sisters. Seven sisters, literally seven companies. It was that big. >> But what remained um you know, this is goes back to my high school years, my college years. So you'd have to go back a long way. But as I recall it, it was broken up into Esso and then the seven sisters and they had one they had one of them and that remained in the family for some some generations to come and very successfully. >> Yeah. Interesting. So, because I'm I was trying to think if there's any historical precedents for this kind of thing, and you have to go back a long time, like we're kind of in a little bit of uncharted waters. And as much as I was trying to think of this as like when we have these insanely successful people in history like Henry Ford or, you know, they make these big impacts and then it's like it's almost like what happened with Steve Jobs. Like Apple still crushed it and it like has gained so much value since he's gone, but it lost the soul and that was the day they started decaying. So I feel like that's >> as unfortunate as it is that is probably the the life cycle of emp you know capitalist empires. >> But look at the Ford family. The Ford family. Henry Ford passed it on to his son Henry Ford II who actually saved the company by the way. Um because Henry Ford went kind of crazy in his old years. But Henry Ford kind of saved the company and that company remained very viable. And when General Motors went bankrupt in the global financial crisis, Ford survived. Why? Because the family, you know, instituted the actions necessary to keep that company alive. And it's still owned by the com by the family today. And it's still successful. People think it's going, you know, its demise is written in stone because of uh EVs. But I all I can say is that there's a company that managed to maintain its position for many many many generations. >> Yeah. >> I think five generations, six generations. >> So it can be done. >> So this is another >> hole to poke in the because I'm always thinking of B, you know, we're so bullish and optimistic. I feel like we're in this weird kind of like euphoria of like everything can go right. Elon's gonna take over and get so big and then I'm kind of playing out these other things of like he's already worth 700 billion. Like Rockefeller's thing got broken up cuz it was so big. you know, like when things get this big, there's a almost market mechanism of breaking them up and attacking them, which I think can't I can't put my I can't like tell you how it's going to happen, but I do think there's like clear socialism like coming like this idea of some people shouldn't have all this money. And it's honestly kind of hard to argue against like when my cousins are like my Italian cousins, it's like Elon Musk tropis like no, it's not right. He's got too much money. It's not. There's no even. Like, how are you going to say that, GI? He has a 500 billion and this guy is sleeping with no home. How is how is that fair? And like I can see that being way more than 50% of the population feeling that. So, how do we if you're a Tesla or Musk investor, even just a tech enthusiast, how do you think about where we're moving as a society and like trying to put that into the investment thesis? Because that's where I'm almost like I'm like at some point the music stops. Like people are going to get sick and tired of like the 2 million people who are shareholders in the Musk economy being 10 being so much richer than everyone else. Everyone's going to hate them. I don't know. I'm like I don't like to think about this. But then in some ways it's like as an investor you want to think through all the bad things. So to me the greatest risk for Tesla is we need Elon as CEO. That's number one. We and number two I call it the dumbism new lite movement of you know just because someone else is successful they're the enemy. So, do you think about that? Am I going crazy paranoid here about that being a part of the risk of investing in Tesla today or how do you even think about that? >> I think you're right on the money. There is that risk. Elon attracts even more hatred due to his um you know his political prediliction his prediliction to become active politically which you know I mean traditionally is a really really bad thing for a billionaire to do. I mean you only have to look at Henry Ford and his alliance with the Germans. I mean it was a terrible situation. So your your your point is extremely well made and you know the times are getting really tough in terms of the socialism and you know we've got a mayor in New York who's a who's a you know publicly said that he's a socialist um and and so the times are very you know the public is extremely divided um and Elon's political activism really plays against him. So you're absolutely right. And by the way, it's a strong argument against uh combining these companies because it makes the target even richer. So that is a negative. There's no doubt about it. Not that these negatives have ever influenced Elon's uh strategy. >> I mean, he's going to IPO SpaceX. Talk about getting heat and negative negativity. He was he's willing to go in there. So >> absolutely. There's no question about it. I mean, you know, you only have to see uh, you know, today, I mean, in or yesterday or just in the last week, Nvidia announced that they're going to into autonomous cars and immediately the stock drops. Why? Because all the haters come out and say, you see, it's all going to happen. Everybody else is going to have it. Blah blah blah blah. And so you get this extraordinary um blindness and and willfulness in these investors uh because they hate Elon and and that's that's that's all there is to it. And so Elon is very exposed in this regard. So, you know, that's a real problem for investors in Tesla and it's a real problem for optimizing the companies uh the the company all the company's financial situation. But on the other hand, you know, Elon's never cared about that in the past. >> And and has it stopped him? You know, like you can point to the Nvidia stock going down, but it's like Tesla's worth a trillion and a half with like five billion in earnings. Like I'm pretty sure the vote is pretty clear. We believe Elon and are supporting him and don't give a crap. So that's what's so interesting is like the everyone's always like, "Well, the stock didn't jump after earnings. The people are in charge of it or manipulating it." I'm like, "No, no, no. The people in charge of it are the visionaries." Like Ron Baron, the market is it the you you can't have an opinion. You almost just need to watch the market and accept that is what it is. And so the market's telling you the clearing price for Tesla is way above the normal PE. way above whatever you think the business is today because so I think in some ways that gives me some pause and it's like Tesla and Elon aren't doing bad things. What they're doing is actually super good for the world and in many ways pushing towards socialism because it's healthcare and housing and abundance for all. So that gives me some pause of like maybe eventually people stop getting off their phones and get a new app besides Instagram and stop being so polarized and that'll actually diffuse the situation, you know? So, I think there's like there there's like as much as I'm negative on it, I think the pendulum could also just swing back to like, you know, this whole idea of like the most productive people sucked was actually kind of wrong. Let's So, I'm hoping that. But anyway, I don't I don't want to get too Do you have any comments on that? >> I've lived I've lived through this so often. Golly, I I you know, at the time of Nixon and the um Vietnam War, there was equal fervor on the left. There was equal hatred uh towards capitalists. Yeah. I mean there were riots in Germany. The red what were they called? The red something red brigades or something would riot in Germany. I mean the whole country was a flame. There were riots in Paris. The whole country was a flame. And uh here in the US there were massive massive antivietnam war protests. They were all aligned with you know the an extremely strong socialist movement and you know times change and and you know the world revolves. So I think this too shall pass but your point is extremely well made. You know the problem is that you know we have an extraordinary amount of fraud and and just grift in the economy that's built into our government. We haven't had the clearing of all of that through some reform movement. It seems to me that a reform movement in government is the most important method of getting this country back on track. Um far more important than destroying billionaires and I think that would increase the the earning power of the man in the common man in the street and would somewhat you know compress this. But you're right. If a future of abundance were to arrive, a lot of this would go away. >> So >> yeah. Yeah. >> I I think there is there are multiple paths to how this revolves resolves multiple paths. But in my you know in my 80 years I've seen it oscillate backwards and forwards and backwards and forwards. And I think that oscillation is going to continue. I have a prediction about the end of the the how this resolves at least with the Musk Empire. Then I want to come back to your final slide here to wrap it up. But I think it ends in I've been thinking about this a lot is there's the runaway moment of like chaos where it just there's too many projects. There's too much money. Elon gets too old and tired and it's like there's chaos in every direction. It's not going to end with like a neat bow on it and everyone gets a gazillion dollars and like click it's Tesla Musconomy perfect. It's going to end in chaos. SpaceX is going to be f fought for this way. Tesla's going to be fought over this way. Neuralink's gonna have the CEO that takes, you know, it's going to be like a I just feel like when you're it almost like I feel like I'm like it's kind of bad to think about the end of the the Musk Empire, but it's kind of it makes me appreciate what we have while it's going because it's like this like it's like a bullet train. everything else is like moving so slow and the Musk economy is this bullet train that is like you know so whenever it stops it's going to be this huge explosion kind of like the more inertia the more >> you failed to factor in you you failed to factor in one very important point Elon may be the of all you know the good the good things and bad things like everybody he he has positives and negatives but one of the strongest one of His strongest skills actually I think it may be his single strongest skill is his ability to hire. He has an extraordinary ability to hire. And so amongst his dozen or so kids, I've lost count. Amongst his dozen or so kids, he will be able to choose and find the right one to take the mantle. That's my That's my judgment. And if he does, I think this c company can not only survive, this mcon economy can only survive but prosper. And maybe it's multiple of the kids, but I think this this economy this mcon economy can survive and and prosper. Now, there there's obviously the possibility that he chooses the wrong person that ends up in a squabble and it's a mess and everything you say is true, but I don't think that's going to happen. I have a I I think this is going to be a Ford kind of situation rather than, you know, Howard Hughes kind of situation. >> Interesting. >> Remember, Howard Hughes had no progeny that he recognized. Elon has more than a dozen. >> It's it's it's I feel weird talking about these like end of empires things, but it is >> it is like this is one of the biggest things in history and it's so important and consequential that it's like anyway it's it's interesting. So let's get back to your big theory which could make this easier for Elon to make the Musk economy prosper faster. What's like this final outcome slide kind of wraps a nice bow on your proposal. So maybe like let let's run through what happens if if let's assume the Tesla board takes a meeting with Tesla. Larry is like you know what Elon actually loves this idea. We're running with it. What happens next? Well, I rate that probability as something like 0.1 of a percent. But um you know, we'll have to issue about $1.2 billion of new shares, which would dilute present ownership by about a third. The market cap is going to jump to about 1.8 trillion. Musk's final Tesla stake would be 22.1%. Now, that may change because I haven't I haven't factored in the outcome with this current it it could be that I haven't sufficiently factored in I should say the outcome of this of the of the board of the Delaware U Supreme Court's decision. It could be slightly higher than this. But if you take Musk's controlled equity in Tesla and direct private and and and you look at the valuation resulting from this deal, which by the way I think would increase the value of each of these companies, Tesla, he he would become a trillionaire. He would definitely be the outcome of this would be a trillionaire and his path to 25%. All he needs another 2.9%. Um through this approved option plan that he has which is less than the first two trenches. So it it gives him immediately a 22% which is like a four or 5% increase in his current ownership and it places him within two tranches of that 25% mark of of Tesla and and so I think you know I think this would be this would give the companies the group companies tremendous borrowing power tremendous capital raise power and it would give him a much stronger stake and control of the company of the of Tesla without yielding control of the subsidiary companies. Wow. So, okay, I'm just trying to make some sense of this here. Um, so basically we have Tesla issuing a third new of its new shares. >> Yep. adding $450 billion essentially >> in sharecount dilution, >> putting giving uh 28 like half of it to space more than half of it to SpaceX, couple billion to Neurolink, couple billion to Boring and then a hu another huge chunk 160 billion to XAI and then we would own how so then Tesla shareholders we're looking at ownership of like a huge chunk of XAI Okay, we're looking at >> Can you walk us through what what as a Tesla shareholder, what would my percent ownerships in these other companies be? >> So, all you have to do is look at the the third column. Tesla acquires Pro Roer, 35.6% of SpaceX. >> Oh, that's what we're looking at. Wow. >> 44% of Boring Company, 28.4% of Neurolink, and 69% of XAI. Okay, I like this. I'm thinking it was We're going to need to adjust the numbers a little bit though because I'm thinking you undervalued Neurolink. Maybe that was what was throwing me off because I'm like Neuralink could I think Neuralink's worth like 25 billion right now even though they're raising at like 9 billion or something. It's I don't know what >> you may be right. You may you may well be right. And these numbers, you know, I I got to I've got to state error and emissions accepted. I mean, I'm sure these numbers are are not necessarily accurate because firstly, I don't have the financials of each of these companies. I don't have the full, you know, cap table of each of these companies and I've had to do some estimation and maybe my estimation's a little bit out. So, yeah, I >> this is directionally very accurate and you give room for like wiggle room on all these numbers, I think. And I think the point stands that now is the time to execute this thing because Tesla is worth so much where it could leverage its high price stock to actually get these meaningful ownerships. This may change. Tesla stock goes down, the other companies go up, then all the numbers start to shift around a little. So I think >> the math you've done right now of why this is the moment is what's so compelling to me. Um, which in many ways is almost like you could say Tesla's overvalued in some ways relative to the other companies and you're taking advantage of that by this mechanism. Maybe that's a whole there's a lot of things to consider, but that's one I don't know. I think this would be extremely bullish if I was a Tesla shareholder cuz I'm looking at it like we barely Okay, we diluted 20 or 30%, maybe even 35 40%. It's like, okay, that's still not an insane amount of dilution here. I think the Tesla business can grow 30 40%. And now I've got a third of SpaceX. That's insane. Like a third of SpaceX, which all of a sudden at 1.6, you know, let's say SpaceX goes to two trillion, that's worth like 600 billion, 700 billion. And then that already makes up for all the dilution and more. So, I think it it's it's interesting to me from a Tesla standpoint where it's like we could acquire all these meaningful stakes with just this 20 to 30% dilution. It feels like a very strategic trade that for Tesla shareholders. >> Golly golly, it's even better than that. What is Why is Tesla's stock worth so much more than you can calculate out its value using standard, you know, standard measurements? I mean the Musk Musk premium it's the only Musk company you can buy essentially maybe growth I call it the Musk premium but I'm curious what you're going to say. >> So so the Musk premium is let's dig let's drill a little bit into the Musk premium. The Musk premium is based upon all these projects that he has spun into this company. Tesla's got like the robo robo taxi. It's got Optimus. It's got the energy business. it's got some really serious projects underway. Now you spin these other companies in and instead of three serious or four serious projects, you've got eight, nine or 10 serious projects. So you you've got even greater futures than you have with Tesla. So my argument is that this really, you know, significantly expands the what I would see as Tesla's premium over the standard market measures. So my argument is that the sum of the whole is much greater this the the whole is much greater than the sum of these parts. >> And what what's the kind of phase two of your plan like? So let's say Tesla does this, acquires the stake. Is that kind of how it stays and they can all partner or are you thinking this is a broader stepping stone to Tesla eventually outright acquiring them all? >> Absolutely it is. Absolutely it is. And and you know that the time will come look Berkshire is controlled was controlled by one man who had like you know a couple of maybe four or five%. I mean, this this puts Tesla in the in the absolute position to acquire like Apple. And I've argued for a long time that Tesla should take control of Apple. That's a whole another. Wait, give me why. >> Well, for very simple reason. Apple no longer, you know, it it Apple is a dead company. Apple is a company that survives only from the strength of its iPhone. It it survives based upon a product that was developed 20 years ago. It has lost its way in terms of you know building futures. It needs a product manager. It needs Elon Musk. Elon doesn't have to buy 50% of it. 10% maybe even 5% takes control of Apple. Interesting. >> But they want they want the they Apple is in desperate need of the greatest product manager they can lay their hands on. And the greatest product manager in the world in my judgment is Elon Musk. So Apple needs to hire Elon Musk. And how do they hire Elon Musk? They allow Elon Musk to buy control of Apple. >> Wow. >> You've got a bunch of old men. You know, it's this is no country for old men. I I mean, I'm the first to tell you that I I should not be in high-tech. The youngsters, you and and other youngsters should be taking the mantle and are taking the mantle. I'm happy to invest in them, but but they are the people who should be running and are running the businesses I'm invested in. Tim Cook and his gerant I mean they're not a gon geronttocracy. They're but they're all old men. They should not be in that business. So Elon should be in that business. Elon should be doing the hiring. They they've done a terrible job of hiring. He should build a product team back up again. That Tim, you know, that Tim just devastated. I mean, Tim Cook created China's industrial might. Literally created it. I mean, he built that industrial might from zero to this giant giant power. Why? Because he just simply relied upon them to make better and better iPhones at cheaper and cheaper prices. And they learned to create an industrial might, an industrial power that the world has never seen before. He he trained 28 million Chinese workers. I mean anyway, >> well I like I like what you're saying because it's my interesting theory of like companies or countries in some ways or becoming so powerful. And so it's interesting to think of it in the lens of like economics has become the forefront of like war I don't want to say or geopolitical strategy has be has boiled down to economics and like economic strategy. And so that's why I think Elon, what Elon is doing is so he's such an American asset when you look at the world from that angle of like, bro, we need this player on our team. Like he went into China when they never wanted to let us have a factory and got like like it's not Apple where Foxcon's building the cars. He's owning the factory. He's making a ton of profits. So >> you can you can point to a handful of people who are transforming this country. Elon, the guys at Andural, Rivian if you like, but there are very few people who have built a lot of the a lot of space people who really are spin-offs from SpaceX. A lot of them, I mean, they are reinventing the United States as industrial base, industrial might. They are. There's no doubt about it. Who's destroying it? It's the apples of this world. The people who are getting stuff made in China and selling them cheaply and and selling, you know, the there's no invention. There's no inventiveness there. There's no product management there. So, yeah, I mean, there's no doubt at all in my mind that Elon has created the road map for the United States to resume its its position in the world. And that's why I think he should acquire control of Apple. This this plan gives him the the the the means to do that >> for like geopolitical strategy because it's it's it's almost like we didn't realize how hollowed out the US had become and how weak we were and like our incredible financial engineering to get the world on the dollar and exporting everything or like you know we export culture that's it. We don't make anything anymore. like that had gotten to a point of being such a blunder in this economic, you know, game we're all playing that I think that's >> good that that that the Tesla's in and that's why I love when Elon says like we're geopolitically, you know, we're geographically diversified for geopolitical hedges and it's like that's why I always think it's like you're owning a business like Warren Buffett, as much as he wasn't in tech, his idea of like there's a business behind the stock, it's like this business is so strategic, Tesla, like they can do it all in house. they can do it on every continent like you know and then you look at these other Ford and GM who outsource it and they can't do it and they need they rely on all this other stuff. So it's like you the even though they do the same thing the strength is so different even though it may take like decades or centuries to reveal that strength potentially >> right >> well you know if you think of Warren Buffett I mean you have to be kind to the man because he's done incredible job and and you know nonparal I mean you can't compare anybody to him but look at the industries he bought into railroads carpets I mean oil uh you know I you these aren't industries that are going to transform the United States. And by the way, he bought into Apple, which is consistent with, you know, buying into old, you know, he talks about he talks about, you know, building a business for the future and da da da da da, but all he's done is buy for the past. It's Elon that's bought for the future and that is >> blaze the trail >> for the future of the United States. >> And so yeah, I think that if he were to take control of Apple, it would change the future of Apple quite dramatically. You know, there are other people who could buy Apple. Maybe Angel could buy Apple, but >> it doesn't take a large >> I don't it doesn't take a large percentage. I should get off the whole Apple thing. All I'm all I'm saying is that you know Elon's empire should be retained as an empire because it it it is the possibility to build, you know, to to really share the knowledge and share the capability and share the financial strength to take on the challenges that he's identified. And actually now I love this Apple tangent we got on because it makes me it realizes it sets on the importance of like this may be the only way we combat China. If you go to China and you see how fast they're moving like they have the Musk economy. It's the CCP. It owns everything. It's has you know and so >> we I think that's a kind of scary place that I feel like is the difference between a lot of people who are anti-AI and tech in the US. It's like this is coming whether we like it or not. Like the this we can't just chill in this world that's perfect forever and it's going to get rocked and change and it's either by like a non-democratic country that has zero like ideas of what we want or cares versus or it's like our own homegrown thing. So I think people aren't realizing that as much as like Elon's our only hope, not the enemy in some ways and the Musk your your whole pitch here in many ways to me that's the first time in my head I'm like ooh now we really rival China with something big powerful and why do I say that? Because mathematically there's a key reason here. It's like the ability to move a hundred billion dollars like that and not think about it and make an investment. That's what it takes. We're at this point where we have the most technology, the most resources, the most potential, the smartest people and all the all the money, but it takes spending that money and going. And that's like what we're so bad at. And that's why I like that Elon's a dictator or or that's almost a bad word for it, but like monarch, you know, we've gone back to these systems realizing that monarchies with a mission are actually much more efficient than not. And and Yeah. And then the US has to become a pseudo tech monarchy to be able to stay relevant. And that's >> so there was a monarch there was a monarch in the industrial revolution and his name was Andrew Cariegi. If it were not for Andrew Cariegi, I don't think the United States would be where it where it where it reach would have reached where it reached by the 1930s. Andrew Kiggi, you know, he brought Bessimist Steel to this country and he he actually made it happen. And absent him, I don't think we would be where we are today. In a way, Elon is like the Andrew Kiegi of our time rather than the Edison of our time, rather than the, you know, Henry Ford of our time. >> Yeah. Yeah. >> I like Elonardo da Vinci. It just has a good ring to it. Well, Da Vinci was never a great success in terms of >> like commercially, you know. I feel like he had like a lot of oneoff good things. That's why I'm like Elonardo Damuski, he has all the inventions, but he takes them to a billion people. >> Exactly. >> You know. Exactly. >> Dainci's out here still sketching by himself. >> Yeah. Yeah. I mean, there there's a You could say that about a lot of people. I I regard Elon like Henry Ford. Uh not Henry, excuse me, Henry, his his pal Edison because Edison was responsible for so many inventions and for so many products that became standard in American life. >> I mean there's almost no product that you could pick up today that doesn't have its antecedance back to Edison. whether it's the phone, the phonograph, the you know the batteries, I mean of course the the electric light. Um there's almost there's almost nothing that that is important in modern life that doesn't find its way back to Edison and of course the generation of electricity. And so, you know, people argue, well, he wanted direct current, not alternate current, and so on so forth. But that that was a trivial process compared to actually creating a an electric system and electric lights in the city of New York. That, you know, that was the nucleus of the explosion of electricity. But the and so he was responsible for so much change in our lives more than perhaps any other single person. But you know he didn't have Elon's financial acumen. He didn't have Elon's product management skills or product management genius really. And so he never re achieved the the what I think he never achieved the heights that I think Elon will achieve. Yeah, it's it's crazy. I can't even wrap my I feel like it's just it's like a classic case of disruption where the thing that's better gets bigger than you've ever imagined it could be. And that's what we have with like one person. It's just that we need to rebrand Elon to inventor. Still call him a billionaire. Billionaire inventor Elon Musk. Like cuz to me that's what is so interesting. It's like maybe other people have invented these technologies, but the idea of bringing them to so many people like that's Yeah. And I And even though you said your scheme only has a 0.1% chance of working, how crazy is it to be alive at a time where you have Edison Damuski 10.0 and you're even pitching a scheme that has a.1% chance? like and I don't I think 0.1%'s bad because I still think SpaceX IPO is that's probably the way they're going to go and that makes the most sense and it's the most tried and true and they can crush it with that. >> But I I actually think one of Elon Musk's strengths is he's he does one move and he focuses on it >> and he he's always thinking longterm, but he's very loose about the long-term plan. And so to me it's like, okay, we need a hundred billion. SpaceX can IPO, we can get the 100red billion, kick off the orbital data centers, raise more money when we need to. That's the move right now. He's not he's and I'm and and I'm trying not to I'm not to like say he's not thinking about it because we know he's thinking about it, but I just feel like that's kind of and that's his strength is that he doesn't get tied down to these big things. He just gets the next thing done and then is willing to move on. But in some ways to me without with with there's a there's a hint more this is the trillion this allows a trillion dollars of capital to flow very easily and much faster than if SpaceX were to IPO. So if your theory is right that he really needs a trillion dollars for all these capex projects, I think this gets his trillion faster. This gets the Musk economy more successful faster than a SpaceX IPO. Like maybe not for sure, but very good chance. >> I agree. And I, you know, there are so many so many uh projects that need so much money. You need something better than just a SpaceX IPO. You need, you know, you need to be able to mobilize gigantic amounts of money. And I think the combined entity will will be just that. >> Well, >> and >> yeah, >> and that would give them so many that would give them so many more um shots at goal. I mean, each one of these initiatives, oral compute, gigaf, cyber cab fleet, optimus, these are each a shot at goal. here we're combining them into one company and so Tesla's valuation is very much tied to its shot the number of shots at gold that it's got and so you know you have to think about Cyber Cab and Optimus can you imagine if you added Gigafab orbital compute and Neurolink and Boring Company and Mars to that and here's another thing to noodle on just last little point is what when we have AI moving into the management suite is Grock not becoming a bigger percentage of management decisions. You have to imagine Elon's on the forefront of that. How much easier I think the biggest bottleneck to AI I'm realizing with my with my farming projects is data which is sounds so dumb but like and even the this other random company I just had on the micro one they're making like they have $150 million business in like a year that they built because it's just data labeling for these AIs essentially because they you can't it's all about what we put in. So in some ways like you have all these companies getting all this proprietary data feeding it back to the super grock. Maybe that's an angle to to combine these entities is you have >> absolutely is you are right on target. Listen I wrote a paper earlier last no two two and a half years ago that the guy who invents the best AI is not going to win. It's the company that has the proprietary data that makes their their AI worldbeating. And so it's got nothing to do with how good the models become, the large models become. It has everything to do about what proprietary data that you own that you know is critical to your field of business. So, if you own critical data that's unique to your field of business and other people don't, it doesn't matter how powerful their their models are, you're going to win. And that's really the secret behind Tesla and it's going to be the secret behind SpaceX and it's going to be the secret behind orbital compute and it's going to be secret the secret behind Gigafab and and so the the larger this group is the more the data repository that they own is the more powerful they become. >> Wow. And the corporate governance they need to allow that AI to communicate. Wow, I'm loving it. Okay, well, this is this was even more fun than I expected, Larry. I really I really appreciate having you on. It's a blast. Um, is there anything else we need to cover here? >> No, I think uh I think I've probably bored a lot of people for a long enough time. >> No way that people loved your last episode. So, um yeah. No, this has been awesome. Thank you so much. I really appreciate it. And thanks to everyone tuning in. Leave comments below on this idea because I feel like this is a crazy idea. Do you think it's a 0.1% chance or is Larry being a little too humble here? Because I think it's actually I don't know. I just think it's there's still the last shoe hasn't dropped on the SpaceX IPO. So, we're still in the scheming phase. So, it's really cool to be able to have uh these discussions. >> Thanks very much for having me.