Transcript: Is Elon Musk the New Rush Limbaugh?

(Bloomberg) -- In recent months, Elon Musk has shown an openness to Donald Trump’s falsehoods that the 2020 election was stolen and that the Jan. 6, 2021 insurrection was a government conspiracy. Musk has also promoted the far-right claim that White people are under threat from Black people and immigrants—popular racial fixations of some Trump supporters. This week, the Elon, Inc. podcast is joined by Bloomberg reporter Davey Alba to discuss how Musk is increasingly engaging with memes and falsehoods favored by Trump and his followers. The panel also breaks down the current drama over at Tesla.

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Here is a lightly edited transcript of the conversation. Listen in full below, learn more about the podcast here and subscribe on Apple and Spotify to stay on top of new episodes.

Joel Weber: Welcome to Elon, Inc., where we discuss Elon Musk's vast corporate empire, his latest gambits and antics, and how to make sense of it all. I'm your host, Joel Weber, sitting in for David Papadopoulos.

Donald Trump Jr., on tape: I know, I must be incredibly racist if I just want someone who knows how to fly the plane, not someone who got in because they checked a couple boxes and maybe there's a big boy in the room to teach them how to do it in case something goes wrong.

Weber: What is Donald Trump Jr. talking about? And what does it have to do with Elon Musk? More than you might think. To discuss Elon's recent fringe posts about undocumented immigrants and corporate diversity initiatives and more, we'll convene Davey Alba, who covers tech and misinformation here at Bloomberg News.

Davey Alba: Hi.

Weber: Dana Hull, the world's most meticulous Tesla reporter.

Dana Hull: Good morning.

Weber: And Max Chafkin, senior reporter at Bloomberg Businessweek.

Max Chafkin: Hello.

Weber: Later this episode, we'll also talk about the latest Tesla drama. But first, what has Elon been posting about on X, Davey Alba?

Alba: Oh boy. I mean, there's been a lot. Recently he's been talking about how HBCU grads have lower IQ, how cis is a heterophobic word. He's been talking a lot about quote unquote illegals, particularly, you know, sort of illegal immigrants and their voting patterns, and that this idea of meritocracy that is very prevalent in tech, that competence must win over racism and sexism. There's a lot to dig into there.

Weber: What's also interesting, he seems to be noisier lately than usual.

Alba: Yeah, I mean, I would point to a report by the Institute for Strategic Dialogue that I read recently, and they basically tracked Elon's, you know, sort of pattern of posting and topics that he's been writing on X from before he was the owner of the platform to the months after. And before, you know, most of his rhetoric was around crypto. It was around Tesla and SpaceX and the other companies that he owned. And then once he was the owner of Twitter, he started interacting very frequently with right-wing users. And you know, this is not anecdotal, it's based on an analysis of his most popular posts and just kind of who he follows, who he replies to. And you know, we see that that changed after he acquired Twitter, which I think is notable. I think that says something about his information bubble, like what he's up to in some ways. And, you know, gives us a sense of where this is all leading

Weber: Max, what is happening in Elon's information bubble. And let's bring back that, that Don Jr. reference that we started the show with. What is he being exposed to?

Chafkin: Yeah, so the latest thing – Davey kind of hinted at it – and that Don Jr clip gets at it, is basically the idea that somehow diversity caused the door of the Alaska Airlines flight to blow off. Now again, this doesn't make a lot of sense. It's based on, as far as I can tell, a right wing influencer sort of doing a kind of a tortured reading of a Boeing SEC proxy that talked about executive compensation and, and linking executive compensation to meeting diversity metrics in addition to safety. And so you go through like several logical leaps and the suggestion is that somehow diversity is hurting the ability of airlines and plane companies and regulators to hire competent people. And hop, skip and a jump to somehow DEI is to blame for these in air issues. It is nonsense.

Chafkin: It's nonsense. Both in the sense that there's no evidence that air travel has gotten less safe, right? Air travel is historically extremely safe. So that part doesn't make any sense. The other thing is, there certainly is a critique to be made of Boeing, but I think if you talk to critics of Boeing, what they will talk about has more to do with the need to meet quarterly earnings challenges and so on. And what I also think is that basically what we're seeing is Elon Musk, he's sort of broadcasting these existing right-wing memes, but he's bringing them to a much wider audience, right? He found this Boeing thing. He didn't create it himself, but it goes from Elon Musk into Don Jr. and to a much, much wider audience than it otherwise would've had.

Alba: Just to connect the dots a bit more, United Airlines program partners with Hampton University in Virginia, Elizabeth City State University in North Carolina and Delaware State University. Those are historically black colleges. And the partnership allows graduates to get an interview with United Airlines pilot program. Elon's tweet, if we look at it verbatim, he said, it will take an airplane crashing and killing hundreds of people for them to change this crazy policy of DIE – a play on DEI. There's so many problems with that argument. First of all, this kind of partnership is just kind of like a chance to interview and the idea that HBCU grads have lower IQ in general is completely baseless. And I think it's worth just stating that as fact as we lay this out for our audience.

Hull: One thing that I just keep thinking about whenever I see these posts, I really struggle with like how much to call Elon out on them because calling him out also kind of like shares them, right? So it's like that whole thing of like amplification – unwittingly amplifying as a journalist. And so I always am on the fence about how much to even talk about it because I feel like we're doing Elon's work for him by injecting these horrible ideas into the mainstream. But the thing that I always think about is his companies are incredibly diverse, and it's so striking to me that he is on this rampage about DEI when Tesla, for example, is a minority majority company, like those factory workers are overwhelmingly Latinx, Black, you know, Filipino, I mean, there are ERG groups at all of his companies. There's Women at SpaceX, there's Black at Tesla, there's LGBTQ at Tesla, or there was, and I just have to wonder if he's actively trying to dismantle those groups or if the people who are leading those employee groups are just gonna leave in frustration and not be replaced. It's a real slap in the face to his workers.

Chafkin: We should also just keep in mind the context here is the 2024 presidential campaign, and you know, much of what Elon Musk is tweeting, you know, it's, it's, it's tempting to be like, well, why is he saying all these horrible things about migrants? Or why is he sort of suddenly fixated on these White nationalistic tropes around Black crime and things like that? And the answer is it's because it's what Donald Trump and many of the Republican presidential candidates are talking about right now.

Weber: We are now on the heels of the Iowa Caucus, where Trump ran away with it, frankly. And so you think all of these recent tweets from Elon over the past week totally was part of the buildup to a political moment in Iowa?

Chafkin: I'm just saying that Elon Musk now operates within a conservative media political ecosystem. Like he is, basically in addition to being the world's richest man, in addition to running a bunch of companies, we say that all the time, he's a political figure. He's simultaneously like Rush Limbaugh and I don't know, like Warren Buffet. It's weird.

Chafkin: Yeah. And so I was actually, before this podcast, trying to think back – have we had somebody like this in American history? And it's pretty hard, like maybe go back to Charles Lindbergh, like where somebody who has the level of celebrity and power and money that Elon Musk has alongside the political interest and, you know, influence and demagoguery. It’s pretty unusual.

Weber: Howard Hughes, we'll stick with the aeronautic theme maybe.

Chafkin: Well, I don't think Howard Hughes had quite the ambition to be an influencer in the same way, right? And Lindbergh, of course, was this celebrity, very admired and also leading up to World War II, you know, an isolationist and giving these big speeches and so on. I was thinking of Ronald Reagan in the mid seventies, you know, before he ran for president. But Reagan by that point was I think maybe more of a, has been as a celebrity than Elon Musk is today. So it's very hard to look for historical parallel. Most rightwing and leftwing political figures who are sort of doing this weird stew of conspiracy theorizing and so on, they don't have this kind of money, right? Like, there are checks on their ability to spread crazy ideas, which is that the media networks won't air their stuff and they'll start losing money. Elon Musk has as, at least so far, neither of those concerns, right? He owns a media platform and the value of Tesla – while, you know, the stock actually hasn't been doing great over the last week or so. He's obviously still very, very wealthy.

Weber: Davey. One of the other themes that came up in some of his tweets was around immigration. What do we know about Elon's views about immigration and how do his recent posts and comments jive with that?

Alba: You know, I think that Elon has been, like I said earlier, building up to this argument that illegal immigrants getting the ability to vote in the upcoming election will lead to Democrats being elected. And if you look at just the last few tweets he had about these quote unquote illegals, the dozens of replies to his tweets are about, well now we have mail-in ballots. We have all of these ways to commit voter fraud that has been enabled by Democratic people in power. And so I think that this is all kind of part of Musk courting controversy, which has been the shift since he became owner of X. Max was saying that there isn't really a good comparison to a public figure, but what keeps coming to my mind is Trump. The way that Trump courts controversy and the way that people are forced to report on him, as you know, first a presidential candidate and then the president, and you know, this idea of misleading information coming from the top. And just because it is a person in power, people are forced to pay attention to it. That gives that person and all the platforms he controls, and for Musk it’s X, way higher profile.

Chafkin: I would also say, you know, we've talked about the possibility that Musk would sort of move towards Trump. You know, originally he backed Ron DeSantis, he sort of played footsie with RFK and Vivek Ramaswamy who dropped outta the race, shortly after losing the Iowa Caucus. Elon, by sort of going, you know, “stop the steal” or “stop the steal” curious, he has in a bunch of different ways basically endorsed the idea of being open-minded to Donald Trump's view that the 2020 election was stolen. And it's a way for him to maneuver himself to where, you know, the heat of the Republican party is. I think he misjudged where Republicans were going initially. And now, as a part of what's going on with this misinformation, is an effort to tack closer to the sort of heart of the MAGA movement

Alba: Where there is certainly a lot of engagement. I also like this phrasing Max, that you said, “stop the steal” curious, because a lot of folks who spread misleading stuff on social networks often tow this very delicate line of not exactly crossing directly into misinformation, but are in this space of, well, we're just asking questions about what's going on here, what might be behind, say this airplane malfunctioning, could it possibly be that we are hiring unqualified pilots? Could it possibly be because these pilots are from historically black colleges? And you know, this swirl of just asking questions about it, introduces the topic into the public sphere without exactly stating something that is provably false.

Weber: Dana, as a close watcher of Elon for a long time, and just to kind of connect all the things that we've talked about from the undocumented immigrants to the political ambitions or interests, how do you think Elon's views have evolved in the time that he's owned X?

Hull: Well, I think, as Max and Davey have pointed out, we've definitely seen a more open pivot to the right. But I don't think it's been like a hard pivot. I think he's always been, frankly, a right wing libertarian. He just was politically astute about where the winds were and when President Obama was president, you know, he kept those ideas under wraps and just was the green clean energy person ushering in the shift to the electric vehicle revolution. Now that we're in an election season, and, you know, I think he's been emboldened by his wealth and has seen so far that nothing has really stopped him. And the other kind of context that is always in mind here is that his empire is under investigation by several agencies. And when it comes to diversity and racism, remember that Tesla first was sued by the state of California Civil rights division and then by the Federal EEOC for rampant, systematic, widespread anti-black racism at their factory in California.

Hull: And so everything that he does to call into question DEI as an ethos is the backdrop that his companies are really being sued by the federal government for that. And so the more that he can kind of amplify his concerns about DEI, the more popular support he gets for whenever the EEOC levies a fine or, you know, whatever the EEOC does. And so it's like a two track thing of him cosying up to Trump, but also really portraying himself as this victim of big government overreach.

Weber: These lawsuits are ongoing, by the way, and Tesla says that in California, the Department of Fair Employment and Housing conducted a bare bones investigation without interviewing key witnesses, requesting key documents or ever stepping foot in the Fremont facility, and that the agency has abandoned its founding purpose in favor of making sensational headlines. Anyway. Max?

Chafkin: What's different here is that Elon Musk has, as Dana said, he's been pretty politically savvy, right? In prior elections, including in 2020, he has seemed to try to keep his options open. You know, in 2020 he had sort of backed away from Trump and in some ways turned critical, though he was also saying that there were things about – he was sort of trying to have it both ways a little bit on Trump. And now what we've seen is a much more sort of full-throated embrace of the Republican party. And he's basically trying to navigate to whoever is going to be the Republican nominee for president. And I think it's because of what Dana is saying – he perceives that the Biden administration has turned against him, and feels that he needs to make a more full bet on the election, which of course comes with a lot of risk. There's a reason most CEOs don't do this, and it's because if you pick a side and your side loses – that is not always great for you. And both from a regulatory perspective or from just like a brand perspective, right? Like you're potentially alienating half the country.

Weber: Okay, so last week there was news that Hertz was selling 20,000 EVs to shift back to gas powered cars. That's about a third of its EV fleet. This comes after in 2021, Hertz announced it would buy 100,000 Teslas also without a discount, full price for those. Also in Tesla news on Monday night, Elon posted on X that he'd like to own 25% of Tesla – he currently owns about 13% – or he’d just pivot into AI and robotics elsewhere. So let's start with the Hertz news, and then we're gonna talk about Tesla ownership and maybe even a little bit of board talk. Dana, any particular meaning to what these EV numbers that Hertz are about?

Hull: Yeah, so this is super interesting to me. When Hertz announced that they were buying all these Teslas, that was like a big moment that led Tesla to get this trillion dollar evaluation. And it was this like sign that EVs had finally really gone mainstream and it was a big part of the Tesla stock rise. And I've rented Teslas from Hertz several times, and it's been a great experience for me. But I think that for the average person who maybe has never driven an EV before, you have to learn some things about charging and you know, like it hasn't been a seamless experience for everybody. And what happened was Tesla really dropped their prices, which meant the resale value was lower, and then Hertz was kind of left holding the bag because now they own all these cars that have depreciated and rental car companies typically sell off their cars pretty quickly.

Weber: Max, what's the response been from Elon on this?

Chafkin: Has Elon brought it up? I think he has attempted to, as the kids say, like tweet through it or whatever. This is a nothing issue compared to the question of will CNN ignore Vivek Ramaswamy's chances of winning the Iowa caucus, which he was on for days prior to what happened last night and now has congratulated Vivek on, you know, going quietly and with dignity or whatever. I think Dana has brought up the kind of Hertz side of this. I do think there is a Tesla demand side of this. You look at what Hertz is saying, and to me, it seems like they're kind of trying to be nice about it, and they're saying, well, you know, the demand wasn't there, the repair, they're sort of saying a bunch of things that make it sound like, you know, people aren't as excited about EVs as we thought. But of course people are not as excited about Tesla EVs as they thought. I think that may partly be a result of Elon Musk's crap posting, which we talk about all the time. And we've been looking for sort of signs, like is this gonna maybe hurt demand for the cars? I think we're seeing it here.

Weber: Okay, Dana, let's connect this into the X-post that Elon did Monday night, where he currently owns 13% of the company, says that he wants to own 25%, or he is taking his aspirations for AI and robotics elsewhere. What do you make of that?

Hull: So it's hilarious. Like here it is, like Martin Luther King weekend, like most people are trying to, you know, honor Dr. King and enjoy a long weekend, but Musk always does stuff on the weekends when the beat reporter is not working, and the beat reporters on his companies are not working. So this is sort of classic Elon. So there's two things going on. Musk used to own like 22% of Tesla, and then he sold shares to buy Twitter. So he's in this position of not having this controlling stake because of his own folly of buying this social media platform. So, that's one piece of it. The second piece of it is that he got incredibly wealthy because of this crazy moonshot compensation package that Tesla's board approved in 2018, where he basically met these milestones and tranches and then got more shares as the company hit this market cap.

Hull: And it was crazy at the time, but everyone won, right? Like Tesla did gangbusters, Elon got all this money, he's met all the tranches, and he's basically signaling to his board that he wants a new comp plan to stick around. But the current compensation plan has been the subject of this huge lawsuit in Delaware Chancery court. And the judge has not ruled on that yet. So there's no way that the board is gonna do another comp plan while they're still waiting for the last one to be decided on, but it's clear that there's something happening there. And then finally what just cracks me up to no end is he's like, Tesla's an AI and a robotics company. It's not just a car company, we're an AI company. I don't know guys. Like if I don't have 25%, I might just have to take my marbles and go do AI and robotics elsewhere. And it's like, dude, come on. I find it fascinating and hilarious and I would love to know what the people on the compensation committee of Tesla's board are thinking, but it seems to me like they've got another plan ready to go. But they're waiting for the ruling from Delaware Chancery court before they spring it out.

Chafkin: Normally you wait till you're doing something really good before asking for a massive pay increase. I don't know, it's like hundreds of billions of dollars conceivably over some period of time. The thing that's funny to me is that, if I was like, guys, yesterday I was thinking a lot, and if Bloomberg chooses not to double my salary, I might have to do a different Elon podcast. You guys would laugh at me because there's no other credible Elon podcast for me to do. But in the case of Elon Musk, of course there is a credible threat because, you know, he's done this thing with X and Grok, right? Like it doesn't sound so crazy to think that the board might be like, oh geez, like we better watch out or Elon's gonna get all the AI value and stick it in Grok.

Alba: Forgive me if I'm wrong about this, but I also wanted to maybe ask Max and Dana, the AI that Elon is doing with Tesla has nothing to do with generative AI and Grok, right? These seem to be completely different spheres. And so is this somewhat of an empty threat? Like this is just words, rhetoric.

Hull: Like with everything with Elon, everything is related, right? So he is training Tesla's cars on AI, you know, they're using AIi vision datasets for the cars, but then he’s got Optimus the robot, which is also sort of AI-ish , but then he's probably using the language on X to train something. But, then he's gonna need data centers to do all this and I could see all the companies intertwine in various ways. But yeah, I mean, I think you raise a good point. Like when he says AI and robotics, he seems to be clearly talking about Tesla, but then what is he gonna do, like spin off the Dojo computer to a separate company? Like if he doesn't get the 25%, that's what I'm wondering about.

Weber: This comes down to the board, right? Like you've asked for a pay increase, the board is waiting on a decision in Delaware. I mean the board is friendly, we know this, with Elon, but wouldn't the board just push back and say, no, we don't need to pay you any extra. And also anything that's AI and related to Tesla, you can't take out and go put it in your other company if you're not working for Tesla anymore, right?

Chafkin: The funniest thing about this to me is the stated reason for this – why Musk said he needs, you know, a bunch more equity, a huge amount of equity is that the risk of a takeover of Tesla – if he doesn't have 25% – you could have a hostile takeover, somebody else could get control of Tesla. Which is hilarious because Musk, there's absolutely no way, and I mean, Musk can literally do anything he wants on the board, at least so far it has basically gone along with it, you know, owning multiple companies, posting crazy stuff, basically ignoring all sorts of government rules and regulations. You know, the board basically says yes to everything he does. So the idea that somehow some hostile investor could get a few percentage points and somehow, you know, take over is kind of insane. But of course, the board historically has just basically rubber stamped everything Elon does because they've understood that a lot of the company's value is in this guy's personal brand and his personal identity. And it's unclear that Tesla would be better off. In fact, it's very likely that Tesla's stock price would, you know, sink like a rock if Elon Musk left. So the board is sort of in a bind.

Hull: Tesla always discloses the Keyman risk. They're highly dependent on his services. And until they have a clearly named number two, they always will be. And I think what's interesting about Elon and Tesla is that anytime anyone has kind of risen to be a potential number two, that person has been axed. JB Straubel, Zach Kirkhorn, Doug Field, Jon McNeill, Jerome Guillen, like all of the executives who were rising stars, you thought, oh, maybe this is gonna be the COO they've always needed. Once they've risen to that height, they've always left. And so I think succession planning remains a huge issue. And basically, yeah, Elon seems to be indicating like, give me more, give me 25% control, or I'm outta here, or I'm gonna start another startup. And that puts the board in a really difficult position.

Chafkin: And like if Elon Musk left, this would cease being an AI and robotics company. Like right now, Tesla isn't a car company, it's an Elon Musk company because you know, the shareholders believe that somehow Elon Musk is gonna swallow up other industries. At various points it's been different things. Self-driving Robotaxis or whatever. If you just put an auto industry executive in charge of Tesla, it would be worth a lot less, like way, way less. It sells fewer cars than the big car companies and it's worth many times more. And so the value only makes sense if it's an Elon Musk company. And I mean, we could talk about why that is maybe a questionable assumption, but it's one that investors by and large have bought into at the moment.

Weber: Dana, can I just ask a stupid question? Doesn't Elon have tons of money? Why doesn't he just use his money to go buy more shares?

Hull: He's not liquid. I think that's the thing that we've all deduced, right? Oddly he's the wealthiest person on the planet, but he does not have liquid assets. He doesn't have cash in a bank account.

Weber: And he sold all his homes already, so that's not an option.

Hull: Yeah, he doesn't have homes. I mean, he's got a jet, but he doesn't have homes. He doesn't have a yacht. He's running six companies. He had to sell Tesla shares to complete the deal on X. Now he's gotta service the debt. And you know, he's like basically banging his fist like, I want more control. Like, you know, he's bummed out that he's down to 12%. Well that's his own fault. And it's just crazy to me too. Like, okay, does Tim Cook have five other companies? No. Like, you know, usually the CEO is singularly focused on the company at hand and Elon never is, and yet that's been okay because the stock has largely done well over these past several years. But like on no other planet does someone basically say, I want more control of this company. But by the way, I'm not gonna be a full-time CEO and I'm gonna do all these other things and you're just gonna have to live with it.

Weber: Alright, we'll leave it there. Davey, Max, Dana, thanks so much for joining us on this episode of Elon, Inc.

Hull: Always a pleasure.

Chafkin: Great to be here.

Alba: Thanks for having us.

Weber: This episode was produced by Stacey Wong. Naomi Shavin and Reyhan Harmanci are our senior editors. The idea for this very show also came from Reyhan. Blake Maples handles engineering and we get special editing assistance from Jeff Grocott. Our supervising producer is Magnus Henriksson. The Elon Inc. Theme is written and performed by Taka Yasuzawa and Alex Sugiura. Sage Bauman is the head of Bloomberg podcast and our executive producer. I'm Joel Weber, filling in for David Papadopoulos. David Papadopoulos will hopefully be back next week. If you have a minute, please rate and review our show. It'll help other listeners find us. See you next week.

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