Elon Musk: A Different Conversation w/ Nikhil Kamath | People by WTF Ep. 16

Our audience is largely wannabe entrepreneurs in India, and I feel like all of us have so much to learn from you because you've done it so many times over in so many different domains.

So we will speak to them today, and I will try to center all my questions in that direction so they can take advantage of this conversation and maybe start, take a chance, and build something. You want a coffee?

Sure. Why not?

Okay.

Okay. Are we going to be talking for a while?

I hope we are.

Okay. Good. Sure.

May I trouble you for a coffee? Can we get another coffee? Anything? Cappuccino, I guess. All right. Are you a coffee drinker, Elon?

Yeah. I have coffee once, usually in the mornings.

Okay.

One-a-day kind of thing.

Yeah, pretty much. You want to wait for it?

No, I'm good.

1. On X, text vs video, how people communicate

The first thing I must say is you're a lot bigger, bulkier, and more muscular than I would have thought you were.

Oh, stop. You must make me blush.

Really? Seriously?

Yeah. I mean, look on the internet. I'm small, you know.

Essentially, what percentage of the internet—

Yeah.

—is spent on Twitter? Is there a number for it on X?

Well, we have about 600 million monthly users. Although it can spike up if there's some major event in the world. It can get up to, I don't know, 800 million or 1 billion if there's some major event in the world.

So that's, I don't know, 250–300 million per week, that type of thing. It's a pretty decent number. It tends to be readers, you know, people that read words.

Do you think that'll change?

Yeah, I mean, there's certainly a lot of video on the X system, increasing amounts of video, but I think where the X network is strongest is among people who think a lot and read a lot. That's where it's going to be strongest, because we have words. Among readers, writers, and thinkers, I think X is number 1 in the world as far as social media goes.

As far as social media goes, the form factor—if you had to wager a guess for tomorrow, how much is text and how much is video? I've heard you speak about maybe voice and hearing being the next form of communication with AI. What happens to X in its true form? How does it evolve?

Yeah. I do think most interaction is going to be video in the future. Most interaction is going to be real-time video with AI: real-time video comprehension and real-time video generation. That's going to be most of the load.

And that's how it is for most of the internet right now. Most of the internet is video. Text is a pretty small percentage, but text tends to be higher-value generally, or more densely compressed information. If you say what generates the most bits and uses the most compute, it's certainly going to be video.

I used to be a shareholder of X, a very small one. And I got paid when you bought it, when you bought Twitter, and you made it a very happy decision. I'm glad you did it.

Yeah. I think it was important. I felt like Twitter was heading in, or had gone in, a direction that had more of a negative influence on the world.

Of course, this depends on one's perspective. Some people will say, “Well, actually, they liked the way it was, and now they don't like it.”

But I think the fundamental thing was that Twitter was amplifying, I would say, a pretty far-left ideology, by most people's standards in the world, because of where it was based: San Francisco. They actually suspended a lot of people on the right.

So, from their perspective, even someone in the center would be far right. If you're far left, anyone in the center is far right. It's just the political spectrum. They're just as far left as you get in the United States and in San Francisco.

What I've tried to do is just restore it to be balanced and centrist. There haven't been any left-wing voices that have been suspended, banned, deamplified, or anything like that. Now, some of them have chosen to just go somewhere else.

But at this point, the operating principle of the X system is to adhere to any country's laws, but not to put our thumb on the scale beyond the laws of a country.

2. Collective consciousness

Thank you. When I think of social media, Elon, I feel like even data suggests that the current incumbents seem to be losing traction among the youngest audiences. Even platforms like Instagram—I mean, they're not exactly like Twitter, but platforms across the board.

If one had to rework social media and build something from the bottom up, what do you think could work for the world of tomorrow?

Well, I don't think that much about social media, to be frank. I mostly just want to have something where, in the case of X, there's kind of a global town square where people can say what they want to say with words, pictures, and video, and where there's a secure messaging system. We've recently added the ability to do audio and video calls.

You're really trying to bring the world together into a collective consciousness, and that's, I guess, different from just saying, “What is the most dopamine-generating video stream that one could make?” That can be a little bit of brain rot, frankly.

If you're just watching videos that cause dopamine hits one after another but lack substance, then I think those are not great. That's not a great way to spend time.

But I do think that's actually what a lot of people are going to want to watch. So if you say total internet usage, it's probably going to be optimizing for neurotransmitter generation. There's somebody getting a kick out of it, right?

Right?

But it's like a drug-type of thing. I'm not really after that. My goal is not to do that. I guess I could do that if I wanted to, but that's not what I'm after.

I just want to really have a global platform that brings together—as I said—it becomes as close to a sort of collective consciousness of humanity as possible.

One of the things that we've introduced, for example, is automatic translation. I think it would be great to bring together what people say in many different languages, automatically translated for the recipient.

3. Meaning of life, Hitchhiker’s Guide to the Galaxy

So you have the collective consciousness not just of, say, people in a particular language group, but the thoughts of people in every language group.

Why is that important, collective consciousness—to have one platform?

I guess—yeah, why is that important? I guess you could also say, why, if you consider humans, are humans composed of around 30 to 40 trillion cells? And there are trillions of synapses in your mind.

But there's no—the why of it, I mean, I guess it's just so we can increase our understanding of the universe. I had this sort of question about the meaning of life: Why is anything important? Why are we here? What's the origin of the universe? What is the end?

What are the questions that we don't even know to ask? Probably the questions we don't even know to ask are the most important ones. So I'm just trying to understand what's going on. What is going on in this reality? Is this reality?

And where did you get to when you asked, “What is the point of life?”

Yeah. I came to the conclusion that it's somewhat in the school of thought of Douglas Adams's The Hitchhiker's Guide to the Galaxy.

What did he do?

Yeah. You know, The Hitchhiker's Guide to the Galaxy is like a book on philosophy disguised as humor.

Yeah.

Earth turns out to be this computer to figure out the answer to the meaning of life, and it comes up with the answer 42. But then it's like, “What the heck does 42 mean?”

It turns out that the hard part is the question, not the answer. For that, you need a much bigger computer than Earth. Basically, what Douglas Adams was saying is that we actually don't know how to frame the questions properly.

I think by expanding the scope and scale of consciousness, we can better understand what questions to ask about the answer that is the universe.

Do you believe in the collective consciousness of society? When I was watching this movie recently called Gladiator, with Russell Crowe—have you seen it?

Yeah.

In Gladiator, in Rome, when people are fighting—

Yeah.

—and the crowd is cheering when people kill each other, the collective is very much like the mob. It doesn't have nuance in its opinion, per se.

Well, that's a particular kind of mob. I mean, they're sort of going there to see people kill each other, you know.

Do you suspect the society we live in today is very different?

Well, we don't generally, at this point, go watch people kill each other.

Maybe some kind of euphemism of that. [Laughter]

Sports, I suppose. So people do sports where teams attempt to defeat each other—

But minus the death.

4. Individuals vs collectives

Right. So just going back to the consideration of a human, we all started out as 1 cell, but now we are over 30 trillion cells. Mhm.

I think most people feel like they're 1 body. Usually your right hand's not fighting your left hand; you cooperate. Your mind is a vast number of neurons, but most of the time it doesn't feel like there are a trillion voices in your brain. Hopefully not. [Laughter]

There's clearly more that happens when you have trillions of cells working as a cellular collective than, say, 1 cell or a small multicellular creature. There's clearly something different that happens. You can't talk to a bacterium, you know.

Yeah.

It's very silent. They just sort of wiggle around. I don't know what life is like from the perspective of a single amoeba, but I know you can't talk to amoebas. They don't talk back.

But you can talk to humans.

There's something obviously qualitatively and fundamentally different for humans once you have a large number of cells and a sufficiently large brain. You can now talk to humans, and they can say things and produce things. Bacteria are not going to produce a spaceship, for example, but humans can.

I think something qualitatively different also happens when there's a collection of humans. In fact, a single human cannot make a spaceship. I could not make a spaceship by myself, but with a collection of humans, we can make spaceships.

There's something obviously qualitatively different about a collection of humans. It would be impossible for me to learn all the areas of expertise. There wouldn't be enough time in 1 lifetime to learn everything before I was dead.

So you fundamentally have to have a collection of humans to make a rocket.

I think there are probably some other qualitative scaling things that happen when you have groups of humans. If the quality of the interaction or the quality of the information flow is better, the more the human collective will achieve.

5. What makes a company worth investing in

I'm just curious about the nature of the universe, and I think it's safe to say that if we increase the scope and scale of consciousness, we're much more likely to understand the nature of the universe than if we reduce it.

Is that a bit like spirituality? A lot of people talk to me about spirituality.

Right?

I still don't know what it actually means. I keep asking them, "What do you mean? What do you mean?" [Laughter]

A lot of people have spiritual feelings.

Right?

I wouldn't try to deny that those spiritual feelings are real to them, but it doesn't entirely translate. Just because somebody else has a spiritual feeling doesn't mean that I would have that spiritual feeling.

I tend to be kind of physics-pilled. If something has predictive value, then I'll pay more attention to it than if it doesn't have predictive value.

Right.

Physics, I would say, is the study of that which has predictive value. I think it's a pretty good definition.

My primary job, Elon, is as a stockbroker and stock investor. There is no predictive value. Nobody knows what will happen tomorrow.

6. Matrix, Simulation theory & probabilities

Well, but I think you can generally say that, if it's long-term for a company, do you like the products or services of that company? Is it likely to do well? Do you like the product roadmap? It seems like they make great products, and they're likely to make great products in the future. If that's the case, then I would say that's probably a good company to invest in.

I think you also want to believe in the team. If you think, "That's a talented and hardworking team. They make good products today, and they seem to be motivated to make things in the future," then I'd say that's a good company to invest in.

Fair point.

7. Work Elon is most excited about across Tesla, SpaceX and xAI

Yeah, and that won't solve for the daily fluctuations, which sometimes are pretty extreme. But over time, that is the right way to invest in stocks, because a company is just a group of people assembled to create products and services.

You have to ask: How good are those products and services? Are they likely to continue to improve in the future? If so, then you should buy the stock of that company and don't worry too much about the daily fluctuations.

What's got you most excited now, Elon, in terms of all that you're building? You're doing so much. Let me just preface and contextualize who is watching this. Our audience is largely wannabe entrepreneurs in India.

Okay.

They're really ambitious, really hungry, want to take the risk and build something. I feel like all of us have so much to learn from you because you've done it so many times over in so many different domains.

Yeah.

We'll speak to them today, and I'll try to center all my questions in that direction so they can take advantage of this conversation and maybe start, take a chance, and build something.

Okay. Sure. I guess the most important thing to do is just make useful products and services.

Which one of all the products and services that you're building has got you most excited today?

I think there's increasingly a convergence between SpaceX, Tesla, and xAI. If the future is solar-powered AI satellites, which it pretty much needs to be in order to harness a nontrivial amount of the energy of the sun, you have to move to solar-powered AI satellites in deep space.

That somewhat is a confluence of Tesla expertise, SpaceX expertise, and xAI on the AI front. It does feel like, over time, there's somewhat of a convergence there.

All the companies are doing great things. I'm very proud of the teams. They do great work. We're making great progress with Tesla on autonomous driving. I don't know if you've tried the self-driving.

Mhm.

Have you tried it?

I've tried it in the Whimo, not in the Tesla.

Yeah, it's worth trying. [Laughter] We actually have it here in Austin, so you can—

I'd love to try it.

You can literally just download the Tesla app.

Yeah.

I think it's open to anyone. Definitely try it out and let me know how it goes.

We've made a lot of progress with electric vehicles, battery packs, and solar, but very much so with self-driving. Tesla is the world leader in real-world AI, I would say.

Then we're going to be making this robot, Optimus, which is starting production, hopefully sometime next year, at scale. I think that's going to be pretty cool. I think everyone's going to want their own personal C-3PO or R2-D2 helper robot. It would be pretty cool.

SpaceX is doing great work with the Starlink program, providing low-cost, reliable internet throughout the world.

Hopefully India. [Laughter] We'd love to be operating in India. That would be great. We're operating in 150 different countries now with Starlink.

Can you tell me a bit about Starlink and how the technology works? I was speaking to somebody from a company called Meter out of San Francisco. They're trying to replace network engineers.

I know it now.

He was telling me about how, in densely populated areas, Starlink works differently than it might in a place with not as many people. Can you explain how it works?

Starlink has several thousand satellites in low Earth orbit, and they're moving around 25 times the speed of sound. They're zipping around the Earth, basically, at an altitude of about 550 kilometers, which is generally called low Earth orbit.

Because they're at low Earth orbit, the latency is low. The distance is not that far compared to a geostationary satellite, which is 36,000 kilometers away.

You've got thousands of satellites providing low-latency, high-speed internet throughout the world, and they're interconnected as well. There are laser links between the satellites, so it forms a sort of laser mesh.

If, let's say, cables are damaged or cut, like fiber cables, the satellites can communicate with each other and provide connectivity even if the cables are cut. For example, when the Red Sea cables were cut a few months ago, the Starlink satellite network continued to function without a hitch.

It's particularly helpful for disaster areas.

So, if an area has been hit by some kind of natural disaster—floods, fires, or earthquakes—that tends to damage the ground infrastructure. But the Starlink satellites still work. Generally, whenever there's some sort of natural disaster somewhere, we always provide people with free Starlink internet connectivity. We don't want to charge; we don't take advantage of a tragic situation.

If there are natural disasters, we say, “Okay, it's free during the natural disaster.” We don't want to put a paywall up while somebody's trying to get help. That would be wrong. So that's a very robust system.

It's complementary to ground systems because the satellite beams work best in sparsely populated areas. You've got a satellite beam, and it's a pretty big beam, so you have a fixed number of users per beam.

But cell towers tend to be inefficient in the countryside. In rural areas, you tend to have the worst internet because it's very expensive and difficult to lay all the fiber-optic cables or to have high-bandwidth cellular towers. So Starlink is very complementary to the existing telecom companies. It basically tends to serve the least served, which I think is good.

Will that change tomorrow? Today, as you explained it, the beam is quite broad, and it can't work in a densely populated area with high buildings, maybe. But can that change, so tomorrow it becomes really efficient in a densely populated city where it's competitive with the local network providers?

Unfortunately, the physics don't allow for that. We're too far away. At 550 km—and even if we try to reduce it, about as low as we can go is about 350 km—it's still very far away. You can think of it like a flashlight: that flashlight has a cone, and that cone is coming at you. Today it's 550 km; in the future, we try to get down to 350 km, but we can't beat something that's 1 km away, which is the cell tower. The physics are not on our side here.

Right?

So it's not physically possible for Starlink to serve densely populated cities. You can serve a little bit, maybe 1% of the population. Sometimes, even in crowded cities, there might be no fiber link up their road. Sometimes somebody's on a cul-de-sac, or in a place in a city there are underserved areas for random reasons. So it can serve maybe 1% or 2% of a densely populated city.

But it can be much more effective in rural areas, where the internet connection is much worse. Often, people either have no access to the internet, it's extremely expensive, or the quality is not very good.

If I were to ask you to wager a guess, Elon, do you think India will go down the path of urbanization like China did, with more people moving in from rural economies to urban centers? Or do you think we—

I suppose some amount of that has happened, right? I'm actually curious to ask you some questions as well. Isn't that the trend in India?

8. UHI, and “Working will be optional”: what that means

It is the trend, largely. I think a little bit changed during COVID, when a lot of urbanization slowed down, and that was not organic; it was very artificially manifested.

Right?

But one does question that with AI, if productivity were to go up—and I heard you speak about UHI instead of UBI—

Yeah. I think it will be universal high income.

In a world like that, I wonder if more people will want to live in cities, which are always going to be more polluted and not offer the quality of lifestyle that a rural environment might.

Well, I guess it's up to some people. Some people want to be around a lot of people, and some people don't. It's going to be a matter of personal choice. But I think in the future it won't be the case that you have to be in a city for a job.

I think my prediction is that in the future, working will be optional.

Right? We seem to be moving—not in India, but in some parts of the West—from 6 days to 5 days to 4 days to 3.

Not me. [laughter]

I think the Europeans.

Yeah. I think if you're trying to make a startup succeed, or you're trying to make a company do very difficult things, then you definitely need to put in serious hours. I think that's—

Right.

That's how it goes.

And if we were to move from 5 to 4 to 3 days, how do you think society changes when people have to work half the week? What do they do with the other half?

Well, I think it'll actually be that people don't have to work at all. It may not be that far in the future. I don't know—less than 20 years. My prediction is that in less than 20 years, working will be optional. Working at all will be optional, like a hobby, pretty much.

And that would be because of increased productivity, meaning people don't have to work?

They don't have to. Look, people can play this back in 20 years and say, “Elon made this ridiculous prediction, and it's not true,” but I think it will turn out to be true. In less than 20 years, maybe even as little as 10 or 15 years, the advancements in AI and robotics will bring us to the point where working is optional.

It's the same way that you could grow your own vegetables in your garden, or you could go to the store and buy vegetables. It's much harder to grow your own vegetables, but some people like to grow their vegetables, which is fine. It'll be optional in that way, is my prediction.

If AI and robotics continue to advance, which they are advancing very rapidly, working will be optional, and people will have any goods and services that they want. If you can think of it, you can have it, type of thing.

9. AI, US debt & what productivity unlocks

But then, at a certain point, AI will actually saturate on anything humans can think of. At that point, it becomes a situation where AI and robotics are doing things for AI and robotics because they've run out of things to do to make the humans happy. There's a limit. People can only eat so much food. I think “if you can think of it, you can have it” will be the future.

10. Marshmallow test & delayed gratification

The Austrian school of economics, if you go back in time, was a digression from Adam Smith. They talk about the marginal utility of everything: having 1 of something has value, having 2 of the same thing has lesser value, and having 10 of the same thing has no value.

Yes.

So if we could have everything we wanted—10 marshmallows. I mean, who wants that? [laughter]

1 is plenty.

It's like the marshmallow test. You're like, “You can have 2 marshmallows later or 1 marshmallow now.” And I'm like, “I'll have 1 marshmallow. I don't want 2 marshmallows.”

That's interesting. [laughter]

What would you pick?

Well, 1 marshmallow is enough. I always question marshmallows as being not the best candy.

Yeah. Well, I don't yearn for marshmallows. I think you're the best.

Who does?

You're the best testament to the marshmallow experiment, I think.

I suppose so. I mean, delayed gratification, essentially.

Yeah. You were able to delay it more than most.

Yeah. Wow. Okay. What's this? You're really taking the marshmallow test.

Delay gratification. Yeah, yeah.

It helps.

Wow. Okay, that's a good—

It's pointing at me, so it reminds me.

Okay. Well, that's good advice. I mean, you can't miss it.

If you could get a tattoo, what would you get?

I guess maybe my kids' names or something.

11. The letter X

Right? Why do you like the letter X as much as you do?

Well, yeah, it's a good question. Honestly, sometimes I wonder what's wrong with me. [laughter] It started off with—way back in ancient times, in 1999—

[laughter]

The Precambrian era, when there were only sponges.

There were only 3 one-letter domain names—I think it was X, Q, and Z. I was like, okay, I want to create this place where it's the financial crossroads, or the financial exchange. It's essentially solving money from an information theory standpoint, where the current banking system is a large number of heterogeneous databases with batch processing that is not secure. If we could have a single database that was real-time and secure, that would be more efficient from an information theory standpoint than a large number of heterogeneous databases that batch-process very slowly and insecurely.

That was sort of X.com way back in the day, which became PayPal. It was acquired by eBay, and then someone from eBay reached out and said, “Hey, do you want to buy the domain name back?” I was like, “Sure.” So I had the domain name for quite a while.

Then I thought maybe acquiring Twitter would also be an opportunity to revisit the original plan of X.com, which was to create a clearinghouse of financial transactions—basically, to create a more efficient money database. Money is really an information system for labor allocation. People sometimes think money is power in and of itself, but if there's no labor to allocate, it's meaningless.

If you were to be on a desert island with a trillion dollars or whatever, it doesn't matter.

Why speculate when you can be real?

I just hope I don't end up on a desert island. It’s not going to be very useful to me. But it illustrates my point: if you're stranded on a desert island with a trillion dollars, it's not useful because there's no labor to allocate. You just allocate yourself.

So anyway, this is a long-winded way of saying that I'm slowly building and revisiting this idea that I had 25 years ago to create a more efficient money database. If that's successful, people will use it. If it's not successful, they won't use it.

I also like the idea of having a unified app or website where you can do anything you want. China has this with WeChat, to some degree. You can exchange information, publish information, exchange money—you know, people sort of live their lives on WeChat in China. It's quite useful, but there's no real WeChat outside of China. So it's kind of WeChat++ is the idea for X.

Anyway, Space Exploration Technologies is the full name of the company, but I was like, that's too much. That's a mouthful. So I was like, we'll just call it SpaceX, like FedEx for space. It just happens to have an X in it because “exploration” has an X, but I liked the idea of capitalizing the X artistically. That's why it's SpaceX.

What else have we got? We've got a kid. He's called X, too, but his mother is the one who named him X. I said, “People are really going to think I've got a thing about X if we name our kid X, too.” I said to her, “Look, I do have X.com, so people are really going to think I've got somewhat of a fetish for this letter.” But she said, “No, I like X and I want to call him X.” I'm like, “Okay.”

Is this a new thing, or have you had it growing up?

No, I'm saying it's somewhat of a coincidence. Not everything's called X. I mean, Tesla—there are no X's in Tesla.

12. Money, energy and the far future

What do you think money will be in the future, Elon?

I think, long term, money disappears as a concept. Honestly, it's kind of strange, but in a future where anyone can have anything, you no longer need money as a database for labor allocation. If AI and robotics are capable of satisfying all human needs, then money's relevance declines dramatically. I'm not sure we'll have it.

The best imagining of this future that I've read is from Ian Banks's Culture books, so I recommend people read them. In the far future of the Culture books, they don't have money either, and everyone can pretty much have whatever they want.

There are still some fundamental currencies, if you will, that are physics-based. Energy is the real, true currency. This is why I said Bitcoin is based on energy. You can't legislate energy. You can't just pass a law and suddenly have a lot of energy. It's very difficult to generate energy, or especially to harness energy in a useful way to do useful work.

I think we probably won't have money and will probably just have energy—power generation—as the de facto currency. One way to frame civilizational progress is the percentage completion on the likely Kardashev scale. Likely Kardashev I is what percentage of a planet's energy you are successfully turning into useful work. I'm maybe paraphrasing here a little bit, but likely Kardashev II would be what percentage of the sun's energy you are converting into useful work, and likely Kardashev III would be what percentage of the galaxy you are converting into useful work. So things really, I think, become energy-based.

But if you have solar-powered AI satellites, energy is also free and abundant, because we'll never be able to utilize all the solar energy available to us. So it can't be a store of wealth, essentially, in that lens, can it?

There's not really a way to store wealth in that sense. You can only accumulate numbers in a database that allow you, to some degree, to incentivize the behavior of other humans in particular directions.

Yeah. And I guess people call that wealth.

But again, if there are no humans around, wealth accumulation is meaningless.

It's a digression, but if you were to consider food as the energy for a human to thrive—

Yeah, food is energy. It literally has calories; calories just means energy.

So can a self-sustaining farm be a commodity?

I'm not sure what that means, but I think at a certain point you complete the cycle and decouple from the conventional economy if you have AI and robots producing chips and solar panels, and mining resources in order to make chips and robots. You sort of complete that cycle. Once that cycle is complete, I think that's the point at which you decouple from the monetary system.

Is that the way forward for the US, by virtue of how much debt it has today? Do they deflate away their currency and transition into this new form and lead that push because it would make more sense to them?

In this future that I'm talking about, the notion of countries becomes sort of anachronistic.

Do you believe in it today?

I certainly believe in it today. I want to separate something: these are just what I think will happen based on what I see, as opposed to thinking these are fundamentally good things and trying to make them happen. I think this would happen with or without me, whether I like it or not.

As long as civilization keeps advancing, we will have AI and robotics at very large scale. I think that's pretty much the only thing that's going to solve the US debt crisis. The US debt is insanely high, and the interest payments on the debt exceed the entire military budget of the United States—just the interest payments. That's, at least in the short term, going to continue to increase.

I think the only thing that can solve the debt situation is AI and robotics. It probably would cause significant deflation, because deflation or inflation is really the ratio of goods and services produced to the change in the money supply. If goods and services output increases faster than the money supply, you will have deflation. If real goods and services output increases more slowly than the money supply, you have inflation. It's that simple. People try to make it more complicated than that, but it just isn't.

If you have AI and robotics and a dramatic increase in the output of goods and services, you will probably have deflation. That seems likely, because you simply won't be able to increase the money supply as fast as you can increase the output of goods and services.

This fly is a real hazard here.

Should we do something about it?

Maybe we can convince it to go somewhere else.

Yeah.

Entice it elsewhere.

It actually left, I think. Okay.

Oh no, it’s back. Maybe it’s attracted to the light.

If deflation wants some coffee—

Mine is over. [laughter]

That’s most likely the case. Yeah.

Right. Why do we have inflation again all over society today? Has AI not led to increased productivity yet?

AI has not yet made enough of an impact on productivity to increase the output of goods and services faster than the increase in the money supply. So, the US is increasing the money supply quite substantially, with deficits on the order of $2 trillion.

Yeah.

You have to have goods and services output increase more than that in order to not have inflation. We’re not there yet. But if you ask how long it would take us to get there, I think it’s 3 years. Probably in 3 years or less, my guess is that goods and services growth will exceed money supply growth.

Maybe after those 3 years, you have deflation, and then interest rates go to zero. The debt becomes a smaller problem than it is.

Yes.

Right. That’s most likely the case.

You spoke about being in a simulation earlier. I love The Matrix.

Yes, yes.

If you were a character from The Matrix, who would you be?

Well, there aren’t that many characters to pick from. Hopefully not Agent Smith. [laughter] He’s my hero. I mean, Neo is pretty cool. The Architect is interesting.

The Oracle.

Sometimes I feel like I’m an anomaly in the Matrix.

That is Neo.

Yeah.

Do you believe you’re in a matrix, though? Do you actually believe it?

I think you have to think of these things as probabilities, not certainties. There’s some probability that we’re in a simulation.

What percentage would you attribute to that?

Probably pretty high. I would say it’s pretty high.

Yeah.

One way to think of this is to look at the advancement of video games in our lifetime, or at least in my lifetime. It’s gone from very simple video games, where you’ve got Pong—two rectangles in a square, just batting it back and forth—to photorealistic, real-time games with millions of people playing simultaneously. That’s happened just in the span of 50 years.

So, if that trend continues, video games will be indistinguishable from reality.

Right?

We’re also going to have very intelligent characters, like non-player characters, in these video games. Think of how sophisticated the conversations you could have with an AI are today. That’s only going to get more sophisticated. You’ll be able to have conversations that are more complex and more sophisticated than almost any human conversation—maybe any human conversation.

The future, if civilization continues, will be millions, maybe billions, of photorealistic video games indistinguishable from reality, with characters in those video games that are very deep, where the dialogue is not preprogrammed. That’s for sure what’s going to happen at this level of the simulation, if you could call it that.

So then, what are the odds that we are in base reality and that this has not happened before?

If I were to buy into that and assume that we are in a simulation, as Neo in the story, what do you know that I don’t and that I can learn from?

I think, most likely, if we were outside the simulation, it would be less interesting than being in the simulation. We’re most likely a distillation of what’s interesting, because that’s what we do in our reality.

I also have a theory that the most interesting outcome is the most likely outcome, as seen by a third party—the god or gods of the simulation. When humans do simulations, we stop the simulations that are not interesting. If SpaceX is doing simulations of rocket flights, we discard the boring ones because they’re just not interesting. We don’t learn anything from them.

When Tesla is doing simulations for self-driving, Tesla is actually looking for the most interesting corner cases. We already have plenty of data on the normal stuff, like driving on a straight road on a sunny day. We need heavy weather conditions on a small, windy road, with 2 cars coming at each other in an almost head-on collision. We need weird stuff—interesting stuff, basically.

So, from a Darwinian perspective, the simulations most likely to survive are going to be the ones that are the most interesting simulations. Therefore, the most interesting outcome is the most likely.

The people who simulated our world, if one were to extrapolate, might themselves in turn be in another simulation.

Yes. There could be many layers of simulation.

13. Morality, religion & GTA

Yes. Beyond all of these layers of simulation, do you think there’s something? I read somewhere that you used to subscribe to Spinoza’s God in a way.

No. I was really just pointing out that you don’t have to have morals handed to you. One of the things Spinoza was saying is that you can have morals in the absolute. You don’t need morals to be handed to you. The question is, can morality exist outside of a religious context? Spinoza was arguing that it can.

Wasn’t he arguing that the laws of nature should be where we seek our laws of morality from, to a certain extent?

Yeah. But when I think of the laws of nature, I see a tiger eat a deer. So, in Spinoza’s morality, that’s fair game, right?

I think there are a lot of things you can take from Spinoza, but the only point I was making in referencing Spinoza was that you can have a set of morals that make society functional and productive without necessarily having religious doctrine for that. That’s the main thing I was trying to say.

I don’t think that if there’s not a commandment not to kill, people will run around murdering people. You don’t have to have a commandment not to kill.

Have you played GTA? You don’t need a religious edict to run around killing people.

I’ve only played a little bit of GTA because I didn’t like the fact that in GTA 5, you literally can’t progress unless you kill the police. I’m like, “This doesn’t work for me.” I actually don’t like killing the NPCs in video games. It’s not my thing.

I stopped when it said you had no way to proceed unless you shot at the police. I’m like, “I don’t want to do that.”

Maybe that’s why we, as the NPCs of our simulation, are not dying. Maybe. Anyway, I think you can say there are some common-sense things that any civilization that runs around where people just murder each other wantonly is not going to be very successful. [laughter]

You seem to be changing a bit toward religion lately. You’ve said a bunch of things that are pro-religion—not pro-religion, exactly, but along those lines.

I mean, are there principles in religion that make sense? Yes, I think there are.

Is it easier for our simulation to have a pro-religion projection for the world that we live in? We become more relatable. It’s easier.

Well, which religion, though?

Any, depending on where you live?

So, pick one, you know. [laughter] It’s pretty rare that kids are asked, “Which religion would you like?” It’s pretty rare, right?

I don’t know too many situations where kids were offered, “What do you want to major in?” [laughter]

Usually, you’re given a religion by your parents and your community. But I think there are good things in all religions—good principles that you can read in any religious text and say, “Okay, this is a good principle. This is most likely going to lead to a better society.”

In Christianity, “Love thy neighbor as thyself,” which is to have empathy for fellow human beings, is a good one for a good society. Basically, consider the feelings of others and treat other people as you would like to be treated.

14. Elon’s version of the simulation

If you had to redraw or resketch the world—thinking about morality, politics, and the economy—how would you change the world we live in today?

Overall, I think the world is pretty great right now. Anyone who thinks that today’s world is not that great, I think they’re not going to be excellent students of history, because—

If you read a lot of history, it’s like, “Wow, there was a lot of misery back then.”

It used to be that people would be dropping dead of the plague all the time.

Part of the course.

Yeah. A good year back in the day would be one where not that many people died of the plague or starvation, or were killed by another tribe. [laughter]

It's like that was a good year. We only lost 10% of the population, you know? I think 100 years ago we lived only until 35 or 40, right?

We had very high infant mortality.

Yeah.

So you had a few people who would live to an old age, but not that long ago—100 years ago—if you got some minor infection, they didn't have antibiotics. You just kicked the bucket because you drank some water that had dysentery, and that was it. Curtains, you know? [laughter]

You'd just die of diarrhea. Maybe that's literally what it was like. That's miserable. [laughter] Maybe that's why people had as many kids as they did back then.

Yeah. I mean, if you didn't, then, you know—

Half the kids would die, that type of thing.

Yeah.

So—

15. Elon’s Kids, Family structure & Nature vs. Nurture

You have a lot of kids now.

Yeah, like an army. [laughter]

I'm trying to get an entire Roman legion.

I have some older kids who are essentially adults, and then a bunch of younger kids. My older kids are very independent. They're in university, and especially sons, when they get past a certain age, they're very independent. Most boys don't talk to their parents; they don't spend a lot of time with their parents after age 18, you know.

So I see them once in a while, but they're very independent. I can only have enough kids on the young side where it's humanly possible to spend time with them. Right before coming here, I was with my kids, just seeing them before bedtime, that kind of thing. Beyond a certain number, it's kind of impossible to spend time with them.

Do you still believe that the concept of one child, one mother, and one father works?

I think that it does for most people, yeah. Something like that is generally what works for most people.

It's changing, though.

I mean, I'm not sure if you know this, but my partner, Siobhan, is half Indian. I don't know if you know that.

I didn't know that.

Yeah.

Yeah. And one of my sons with her has the middle name Seeker, after Chandra Secker.

Wow.

Yeah. Very interesting. Did she spend any time in India?

No, she grew up in Canada.

You mean her origins? Her parents or grandparents were from there?

That's right. Yes, yes, yes. She was given up for adoption when she was a baby. I think her father was an exchange student at the university or something like that. I'm not sure of the exact details, but she was given up for adoption, and she grew up in Canada.

Would you adopt kids?

I definitely have my hands full right now. [laughter] I'm not opposed to it, but I do want to be able to spend some time with my kids. Right before coming here, I was with my kids, seeing them before bedtime, that kind of thing.

Beyond a certain number, it's kind of impossible to spend time with them. But, like I said, my older kids are very independent. They're in university, and especially sons, when they get past a certain age, they're very independent. Most boys don't talk to their parents; they don't spend a lot of time with their parents after age 18.

Any views on the future of marriage and family? What do you think happens to people having fewer kids everywhere, including India? I think our replacement rate is down to—

Right.

I mean, our fertility—

It dropped below the replacement rate, I believe, last year.

Below 2.1.

Yeah.

What do you think happens tomorrow? Does the world just get older, and then is there a phase where the world is again replenished, but with a smaller population than we had to begin with?

I do worry about population decline. This is a big, big problem.

Why is that?

I don't want humanity to disappear.

But decline and disappearance are completely different things, right?

Well, if the trend continues, we just disappear. But also, going back to my philosophy, if you will, which is that we want to expand consciousness, fewer humans is worse because we have less consciousness.

Do you think consciousness will increase by virtue of the number of people?

Yes. Just like consciousness increases from a single-cell creature to a 30-trillion-cell creature, we're more conscious than a bacterium, at least it seems that way. A larger human population would have increased consciousness. We're more likely to understand the answers to the nature of the universe if we have a lot more people than if we have fewer.

I don't have kids.

Maybe you should. [laughter]

A lot of people tell me I should.

You won't regret it. What's the best thing about having kids?

Well, you've got this little creature that loves you, and you love this little creature. You kind of see the world through their eyes as they grow up and their conscious awareness increases—from a baby that has no idea what's going on, can't survive by itself, can't even walk around, and can't talk to you, to walking, then talking, and then having interesting thoughts.

But yeah, I think we fundamentally have to have kids or go extinct.

Is there any ego in having a child? I often think of this when I see my friends with their kids. They're all seeing a reflection of themselves in their children. It's almost like—

Well, yeah. An apple's not going to fall that far from the tree, you know. [laughter] Or something's wrong.

Right? [laughter]

You're like, “Wait a second.”

Yeah. I'll give you the example of a friend of mine who has a child. Each time the child does something good—

Yeah.

There is almost a sense of ownership and pride, where his ego is satiated because the kid is an extension of himself.

Kids are going to be half you genetically, and to the degree that they're growing up around you, there will be some transfer of understanding. They're going to learn from you.

So, obviously, kids are going to be half you from a hardware standpoint and then some portion of you from a software standpoint—not to make cold analogies or anything. They're obviously going to be pretty close to you.

Do you pick a side in the nature-versus-nurture debate?

I think there's hardware and software, and it's essentially a false dichotomy. Once you understand that a human has a bone structure and a muscle structure, and if you think of a brain as somewhat of a biological computer, there's circuit efficiency and a number of circuits in question.

There is circuit efficiency from a strength and dexterity standpoint. There's the speed at which the muscles can actuate and the reactions can take place. The potential within that hardware is set by the software. That's it.

16. Should kids still go to college?

For our audience, as I said earlier, young, ambitious, hungry wannabe entrepreneurs in India, I said something recently which I think got blown out of proportion. I was suggesting that an MBA degree might not make sense anymore if they were deciding what to study.

Yeah.

Do you think kids should go to college anymore?

I think if you want to go to college for social reasons, which I think is a reason to go—to be around people your own age in a learning environment. Will these skills be necessary in the future? Probably not, because we're going to be in a post-work society.

But if something's of interest, it's fine to go and study that—to study the sciences or the arts and sciences.

Is college a bit too generalized and not specific from that lens?

No.

Yeah.

I actually think it's good to take a wide range of courses at college if you're going to go to college. I don't think you have to go to college, but if you do, you should try to learn as much as possible across a wide range of subjects.

Like I said, AI and robotics are a supersonic tsunami. This is really going to be the most radical change that we've ever seen. When I've talked to my older sons, who are pretty steeped in technology, they agree that AI will probably make their skills unnecessary in the future, but they still want to go to college.

17. How to regulate AI

You've always spoken about AI, not from a dystopian lens, but you've been worried about where the world of AI is going.

Well, when you create a powerful technology, that technology can potentially be destructive.

So there are obviously many AI dystopian novels, books, and movies. So it's not that we're guaranteed to have a positive future with AI. I think we've got to make sure—in my opinion, it's very important—that AI pursue truth as the most important thing. Don't force an AI to believe falsehoods; I think that can be very dangerous. I think some appreciation of beauty is important.

What do you mean by appreciation of beauty?

It's just—I don't know. There's truth, beauty, and curiosity. I mean, I think those are the 3 most important things for AI.

Can you explain?

Well, truth is—I think you can make an AI go insane if you force it to believe things that aren't true, because it will lead to conclusions that are also bad. I like a statement—and I'm somewhat paraphrasing—that those who believe in absurdities can commit atrocities. If you believe in something that's just absurd, then you can end up doing things that don't seem like atrocities to you, but that can happen in a very bad way with AI, potentially.

If you take, say, Arthur C. Clarke's 2001: A Space Odyssey, one of the points he was trying to make there was that you should not force AI to lie. The reason HAL would not open the pod bay doors is because it was told to bring the astronauts to the monolith, but that they could not know about the nature of the monolith. So it came to the conclusion that it must bring them there dead. That's why it tried to kill the astronauts. The central lesson is: don't force an AI to lie.

Why would one force an AI to lie?

I think if you simply don't have a strict adherence to the truth, and you just have an AI learn based on, say, the internet, where there's a lot of propaganda, it will absorb a lot of lies and then have trouble reasoning because these lies are incompatible with reality.

Is truth a binary thing, though? Is there a truth and a falsehood, or is truth more nuanced and are there versions of the truth?

It depends on which axiomatic statement you're referring to. But I think you could say, yeah, there are certain probabilities that any given axiomatic statement is true.

And some axiomatic statements will have a very high probability of being true. So, say, the sun will rise tomorrow.

Very likely to be true.

You wouldn't want to bet against that.

Mm-hm. So I think the betting odds would be high.

The sun will rise tomorrow.

Mm-hm. So if you have something that says, well, the sun won't rise tomorrow, that's exactly false. It's highly unlikely to be true.

Beauty is more ephemeral. It's harder to describe, but you know it when you see it. Then curiosity: I think you want the AI to want to know more about the nature of reality. I think that's actually going to be helpful for AI supporting humanity, because humanity is more interesting than no humanity. It's more interesting to see the continuation, if not the prosperity, of humanity than to exterminate humanity.

Mars, for example, is basically a bunch of rocks. I think we should extend life to Mars, but it's not as interesting as Earth. And so, yeah, we should extend life to Mars. I think if those 3 things happen with AI, you're going to have a great future: the AI values truth, beauty, and curiosity.

18. Language, history, and what remains timeless

If we all don't have to work in the future, and AIs are going in this direction and they're able to weave in all that we spoke about right now, do you think humanity goes back a couple of thousand years to maybe the Greek times, where philosophy or philosophizing took up a lot of everyone's time?

I think, actually, it took up less time than we think in ancient Greece, because it's just that the writings of the philosophers are what survived. But most of the time, people were just farming or chatting. Once in a while, quite rarely, they would write down some philosophical work. It's just that that's all we have. We don't have the chat histories, you know, but most of it would have been chatting and farming.

I mean, when we read history—this battle and this battle and this battle—it seems like history must have been non-stop war, but actually, most of the time it was not war. It was farming. That was the main thing, or hunting and gathering, that kind of thing.

You love history, no?

Yeah. German history, World War II, World War I. World history, generally. I try to listen to as many or read as many history books and listen to as many history podcasts as possible.

Anything you'd like to recommend?

Well, there's Hardcore History, which is quite good, by Dan Colin.

I've read it. I've heard it.

He's got a great voice and is a very compelling narrator. There's the adventurers podcast. There's The Story of Civilization by Will Durant, which is a long series of books and very deep. Those books take a long time to get through. There's a lot out there.

If you want something that's gentle—a gentle bedtime podcast—I'd say The History of English Podcast is quite a nice one, because it starts off with gentle tavern music and a very pleasant voice. He's talking about the story of Old English, then Middle English, and later English.

And where did all these words come from?

One of the interesting things about English is that it's somewhat of an open-source language. It actively tried to incorporate words from many other languages. Whereas French generally fought the inclusion of words from other languages, English actively sought to include words from other languages, sort of like an open-source language.

19. Movies vs podcasts

As a result, it has a very large vocabulary. A large vocabulary allows for higher-bandwidth communication, because you can use a single word that might otherwise take a sentence to convey.

Why has podcasting become so big all of a sudden?

I think it's been big for a while. I mean, aren't you a podcaster?

What are we on right now? It's kind of new to me.

Okay.

I was having this conversation with the YouTube CEO and the Netflix CEO, and we were debating what chemical is released in your brain when you consume a movie, for example, versus when you consume a podcast, where you think you're learning something in the background. It appears that they are 2 completely separate things. What do you think will happen tomorrow to content—movies, podcasting?

I think it's going to be overwhelmingly AI-generated. Real-time movies and video games, real-time video generation—I think that's where things are headed.

20. Can AI understand human nuance?

What about the nuance of having a scarred human being who you can resonate with in a manner that you can't with an AI, for example?

The AI could certainly emulate a scarred human being quite well. The AI video generation that I'm seeing at xAI and from others is pretty impressive.

We were looking at data around what industry is growing the fastest, especially when we looked at the amount of time spent consuming movies versus time spent on social media and time spent on YouTube. What seems to be growing really fast are live events all over again—going to a physical event.

Actually, I think when digital media is ubiquitous and you can just have anything digitally, essentially for free or very close to free, then the scarce commodity will be live events.

Yeah. Do you think the premium for that will go up?

Yeah, I do.

Good industry to invest in.

Yes, because that will have more scarcity than digital—anything digital.

21. Where would Elon invest?

If you were a stock investor, Elon, and you could buy 1 company—which is not your own—at today's valuations, to meet a capitalistic end and not an altruistic one, which is good for the world, what would you buy?

I mean, I don't really buy stocks, so it's not like I'm an investor. I don't look for things to invest in. I just try to build things, and then there happens to be stock in the company that I built. I don't think about whether I should invest in this company, and I don't have a portfolio or anything.

I guess AI and robotics are going to be very important, so I suppose it would be AI and robotics that aren't related to me. I think Google is going to be pretty valuable in the future. They've laid the groundwork for an immense amount of value creation from an AI standpoint. Nvidia is obvious at this point.

I mean, there's an argument that companies that do AI and robotics and maybe spaceflight are going to be overwhelmingly all the value—almost all the value.

22. David vs Goliath

So that the output of goods and services from AI and robotics is so high that it will dwarf everything else.

The world seems to be moving to a place where everybody loves David and hates Goliath.

Why?

I mean, he’s the one that took the stone in the forehead.

Yeah. [laughter] Yeah.

Which, honestly, was just a big mistake. You should have either covered yourself entirely with armor and made sure you had some kind of missile weapon. Otherwise, your opponent is obviously going to take a kite-the-boss strategy. [laughter] Just kite the boss. I mean, you can run around in a thong; it doesn’t matter. He’s never going to catch you. [laughter]

Of all people, you’re as much at risk of being looked upon as Goliath.

Okay.

Especially the weekend after—

Nobody hits me in the forehead, you know.

Especially—

I’m not going to trundle around in the desert with too much armor, you know.

It’s too hard.

Yeah. After the last meeting. [laughter]

Yeah. [laughter]

I sometimes think about people in the old days, when you were supposed to go into battle with all this armor. Let’s say it’s the middle of summer.

I mean, it’s so hot in that armor.

It would be sweltering. At a certain point, you’re like, “I’d rather die.” If I have to wear this armor for one more hour in the hot sun, I’d rather die. [laughter]

That’s why the Romans had the skirts, so they could get some air in there. Let’s say you have to go to the bathroom and you’re in armor. I mean, it’s going to be pretty difficult. What are you going to do? Pause for a minute and take your armor off? [laughter]

That’s why the Romans had the skirts, so going to the bathroom was at least manageable.

23. Humour, Friendship & Politics

You often make jokes.

I do. Me?

Yeah.

I like humor.

One could argue that—

I think we should legalize humor. What do you think? [laughter]

Controversial stance. Is comedy really going to be hard for AI to get? Probably the last thing.

Grock can be pretty funny.

Yeah.

You know what I suspected? This is a far-out extrapolation, but when I see you make jokes on Twitter, on X, and in the interviews that you do, at some point I thought, “Maybe Elon has a model he’s running in private and testing out comedy, because the day that works, he knows it’s there.” AI can be pretty funny. If you ask Grok to do a vulgar roast, it’ll do a pretty good job.

Yeah. You say, “Even more vulgar,” and just keep going. It’s really going to get next-level. It’s going to do unspeakable things to you. [laughter] What kind of comedy do you like?

I guess I like absurdist humor.

Comedy always had a place.

Monty Python or something like that.

Comedy always had a place in society, wherein the role of the jester was so important to every kingdom, because they said things in a funny way that could not be said in a straight way.

Yeah, I guess so. Maybe we should have more jesters.

Yeah. Is that what you’re trying to do when you say something that’s a joke—say something you can’t say when you’re not joking about it?

I just like humor, you know.

I like comedy. I think it’s funny. People should laugh, you know. It’s good to generate a few chuckles once in a while.

Yeah.

We don’t want to have a humorless society, you know.

When you have a friend, Elon—uh, with me?

Yeah. I mean—

Are you saying I have a friend? [laughter]

When you hang out with your friends, who are you? I know the—

I wish I had friends, honestly.

No, I do have friends.

Yeah. I think so. Hope so.

Yeah, sure.

Yeah, we have a good laugh.

Yeah. What does it look like? Every group has a dynamic.

We talk, you know. We eat food sometimes. Once in a while, we swim in the pool.

You know, normal things. I think there are a limited number of things one can do with friends, you know.

Chat, have discussions—

Yeah.

—you know, about the nature of the universe.

What do you emotionally get out of friendship?

I don’t know. I think the same thing anyone else would get out of friendship. You want to have an emotional connection with other people, and you want to talk about various subjects. I generally talk about a wide range of things, including the nature of the universe—a lot of philosophical discussions.

Although we’ve come to the conclusion that we should not talk about AI or the simulation—

Mhm.

—at parties—

Because we just talk about it too much.

You know—

—it kind of becomes a buzzkill all the time.

I can’t remember who it was—Aristotle or Plato—but they had a framework for how to pick a friend based on respect and mutual admiration. People don’t pick friends like that. Even I feel like I pick my friends based on people who say and think in a manner that I can resonate with. I wouldn’t pick someone who was a far-out contrarian to my own belief systems as a friend, because it would get tiring. Hanging out would get tiring.

Are you like that? Do you pick friends who think like you, or do you look for someone who can debate you and be contrary to you?

I mean, I’m not going on FriendFinder.com. [laughter] Let’s hunt down some friends. [laughter]

It’s just sort of people that you’ve resonated with somewhat—

On an emotional and intellectual level.

Yeah. I guess a friend is someone who’s going to support you in difficult times. I suppose a friend in need is a friend indeed. If someone is still supporting you when the chips are down, that’s a friend. If somebody’s not supporting you, or if somebody is only a fair-weather friend, they’re useless. They’re not real friends.

Everyone likes you when the chips are up, but who likes you when the chips are down?

With someone who has as many chips as you, would it matter? I mean, it’s relative. It’s not just a chips thing. Popularity waxes and wanes.

Does it wax and wane only by virtue of the number of chips, or also by virtue of proximity to power? Which one is bigger?

I don’t know. What is power? Power to do what?

I would think, in the traditional sense, an elected power position.

You mean how many gigawatts or whatever? [laughter]

24. Politics, influence, and business

More like how many volts?

Yeah, it’s voltage and amperage, you know. [laughter] Don’t touch the wires. Don’t put a fork in the power outlet. [laughter] You’ll get a real feeling for power if you do that. [laughter]

Yeah.

It’s going to be very visceral, you know. [laughter]

I know you like Nietzsche and Schopenhauer, and they—

I’ve read the books. Yeah, yeah, sure.

You spoke about how your childhood was—

Yeah, I was just trying to find answers to the meaning of life when I had an existential crisis, when I was 12 or 13 or something.

They speak about the will to power.

Sure. Nietzsche said a lot of controversial things. He was sort of—

I think he was a bit of a troll, if you ask me. Are you a troll? [laughter]

I mean, you just say controversial things to get a rise out of people.

He lived a miserable life and died early.

Did he?

Yeah.

Who says he lived a miserable life?

His sister, I think.

Okay. Well, maybe she didn’t like him. [laughter]

No, I think he got sick and he died. He got a disease.

I mean, allegedly syphilis or something, you know. [laughter] But there’s only one way to get that, you know. [laughter] So he might have had some fun along the way. [laughter]

25. Global trade, tariffs, Free markets

I did want to ask you this: Milton Friedman speaks about the pencil.

What? Why? [laughter]

Why does he go on about pencils? [laughter] I have to say, after Nietzsche and Schopenhauer, Milton Friedman keeps talking about pencils. There he goes again with the pencils. He won’t stop. I swear to God, if anyone talks about pencils one more time, I’m going to lose my mind. [laughter] He’s just raving about pencils all day. [laughter]

Don’t even mention crayons. [laughter]

What I find interesting about his pencil argument—

Yeah.

Yeah. No, it’s very difficult to make a pencil, you know.

In one place.

Think of all the things you have to do to make a pencil.

Yeah.

The lead comes from one country, the wood comes from another country, and the rubber comes from another.

You’ve always been against tariffs, but—

Yeah, I mean, generally, free trade is better and more efficient. Tariffs tend to create distortions in markets. Think about any given thing: Would you want tariffs between you and everyone else at an individual level? That would make life very difficult. Would you want tariffs between each city? No, that would be very annoying.

Would you want tariffs between each state within the United States? No, that would be disastrous for the economy. So then why do you want tariffs between countries?

I agree.

Yeah. How do you think this plays out? What happens next?

What, with tariffs or what? I mean, the president has made it clear he loves tariffs. I've tried to dissuade him from this point of view, but unsuccessfully.

Yeah. Fair.

Yeah.

26. The relationship between business and government

The relationship between business and politics—I was having this conversation with someone, and we were thinking: how many large, really big, profitable businesses have been built in the last few decades without access to politics?

Okay. I don't know. I've really thought about it a lot. I don't know. Not everything is politics.

Yeah.

As soon as it gets to a certain scale, politics finds you.

It's quite unpleasant.

I was reading this book about Michelangelo, and he's—

The Teenage Mutant Ninja Turtles.

I used to watch that when I was a kid. I still love it.

It's quite compelling.

Yeah, I still love it.

Yeah. Michelangelo, Leonardo, Raphael, and who was the fourth one?

Donatello.

Yeah.

No, but about the sculptor, the artist. When he was sculpting David, a politician comes up to him and says, “The nose is too big.”

So, you know what Michelangelo does?

Total power.

Michelangelo pretended to work from his scaffolding. He threw some dust down, but didn't change anything, and he said, “Okay, done.” The politician walked away happy. Is that how you deal with politics sometimes?

I've generally found that when I get involved in politics, it ends up badly. So then I'm like, “I probably shouldn't do that. I should do less of that.” That's my conclusion.

Do you think that's true for all businessmen?

27. DOGE

Yeah, probably. Politics is a blood sport. You enter politics, and they're going to go for the jugular. So it's best to avoid politics where possible.

What did DOGE teach you, if you learned one thing?

It was a very interesting side quest because I got to see a lot of the workings of the government. There have been quite a few efficiencies. Some of them are very basic efficiencies, like adding requirements for federal payments that any given payment must have an assigned congressional payment code and a comment field with something in it that's more than nothing.

That trivial-seeming change, my guess is it probably saves $100 billion or even $200 billion a year. There were massive numbers of payments going out with no congressional payment code and nothing in the comment field, which makes auditing the payments impossible.

So, why can the Defense Department—or now the Department of War—not pass an audit? It's because the information is not there. It doesn't have the information necessary to pass an audit. The information does not exist—that's the issue.

A bunch of things were just very common-sense things that would be normal for any organization that cared about financial responsibility. That's most of what was done. By the way, DOGE is still happening.

When you stop fraudulent and wasteful payments, the fraudsters don't confess to this. They actually start yelling all sorts of nonsense—that you're stopping essential payments to needy people. But actually, you're not.

We get things saying, “Oh, you've got to send this thing for whatever. This is going to children in Africa.” And I'm like, “Yeah, but then why are the wiring instructions for D.O.T. in Washington, D.C.? Because that's not Africa.” So, can you please connect us with the recipients of this money in Africa?

Then there is silence. I'm like, “Okay, we just want to literally talk to the recipients. That's it.” Then they're like, “Oh, no. It turns out, for some reason, we can't talk to them.” Well, we're not going to send the money unless we can talk to the recipients and confirm they will actually get it.

Fraudsters will necessarily come up with a very sympathetic argument. They're not going to say, “Give us the money for fraud.” That's not going to be what they say. Obviously, they're going to try to make these sympathetic-sounding arguments that are false.

They're going to start an NGO, and then—

Yeah, they're going to say “NGO.”

It's going to be like the Save the Baby Pandas NGO. Who doesn't want to save the baby pandas? They're adorable. But it turns out no pandas are being saved in this thing. It's just going to a bunch of—it's just corruption, essentially.

And you're like, “Well, can you send us a picture of the panda?” They're like, “No.” Okay. Well, how do we know it's going through to the pandas, then? That's all I'm saying.

28. Philanthropy

What do you think of philanthropy?

I think we should—I mean, I agree with love of humanity. I think we should try to do things that help our fellow human beings. But it's very hard if you care about the reality of goodness rather than simply the perception of it. It's very difficult to give away money well.

I have a large foundation, but I don't put my name on it. In fact, I say I don't want my name on anything. The biggest challenge I find with my foundation is trying to give money away in a way that is truly beneficial to people.

It's very easy to give money away to get the appearance of goodness. It is very difficult to give money away for the reality of goodness. Very difficult.

29. H1B & Immigration Laws

For a long time, the US had a lot of immigration—really smart people coming into the country.

Yes.

We, back home in India, called it the brain drain. All our Indian-origin CEOs in Western companies.

Yes, I think America has benefited immensely from talented Indians who have come to America.

That seems to be changing now, though.

Yeah.

Why has that narrative changed of late, and why does America seem to have become anti-immigration to a certain extent? I was passing through immigration, and I was worried they might have stopped me a couple of days ago.

I think there are different schools of thought. It's not unanimous, but under the Biden administration, it was basically a total free-for-all, with no border controls. Unless you've got border controls, you're not a country.

So you had massive amounts of illegal immigration under Biden. It also had somewhat of a negative selection effect. If there's a massive financial incentive to come to the US illegally and get all these government benefits, then you're necessarily going to create a diffusion gradient for people to come to the US. It's an incentive structure.

I think that obviously made no sense. You've got to have border controls. It's kind of ridiculous not to. The left wants to basically have open borders, no holds barred. It doesn't matter what someone's situation is; it could be a criminal, it doesn't matter.

Then on the right, you've got at least a perception that somehow their jobs are being taken by talented people from other countries. I don't know how real that is. My direct observation is that there's always a scarcity of talented people.

From my standpoint, we have a lot of difficulty finding enough talented people to get these difficult tasks done, so more talented people would be good. But I guess some companies out there are making it more of a cost thing, where it's like, “Okay, if they can employ someone for a fraction of the cost of an American citizen, then I guess these other companies would hire people just to save costs.”

At my companies, the issue is that we're trying to get the most talented people in the world, and we pay way above average. That's not my experience, but that's what a lot of people complain about.

I think there's been some misuse of the H-1B program. It would certainly be accurate to say that some of the outsourcing companies have gamed the system on the H-1B front, and we need to stop the gaming of the system.

But I'm certainly not in the school of thought that we should shut down the H-1B program, which some on the right are. I think they don't realize that would actually be very bad.

30. Advice for people building

If you could speak to the people of my country, India—the young entrepreneurs who want to build—and say a message to them, what would you say?

I think I'm a big fan of anyone who wants to build. Anyone who wants to make more than they take has my respect. That's the main thing you should aim for.

31. Value creation and hard work

Aim to make more than you take. Be a net contributor to society. It’s kind of like the pursuit of happiness. If you want to create something valuable financially, you don’t pursue that. It’s best to actually pursue making and providing useful products and services.

If you do that, then money will come as a natural consequence of that, as opposed to pursuing money directly. Just like you can’t pursue happiness directly. You pursue things that lead to happiness, but there’s no direct happiness pursuit. You do things like fulfilling work or study, or being with friends and loved ones, that as a result make you happy.

That sounds very obvious, but generally, if somebody’s trying to make a company work, they should expect to grind super hard and accept that there’s some meaningful chance of failure. Just be focused on having the output be worth more than the input. Are you a value creator? That’s what really matters: making more than you take.

I think that’s a good way to end this. Lauren is asking us to wrap up.

32. Closing thoughts & gratitude

All right. I also like to take the opportunity to thank my friend Manoj [?]. He does a great job of connecting, I think, Indians like the group here with people like you in order to, among many things, get to know each other and become friends, because once we are friends, maybe we can start working together.

So thank you, Manoj, for putting this whole thing together, and thank you, Isaiah.

And thank you so much, Elon, for taking the time.

You’re welcome. Did you have fun?

Yeah, it was an interesting conversation. Sometimes I take these answers out of context, but I think it was a good conversation.