Elon Musk Interview at the Morgan Stanley TMT Conference 2023 – March 7, 2023
Questions on ElonsFAQ asked in this interview (7)
Transcript
0:00InterviewerHow would you describe the mission of Twitter 2.0 under your ownership? Elon?
0:07Elon MuskSo the goal is to have Twitter be the best source of truth, the most timely and accurate source of truth, even if the truth is something we don't want to hear or unpleasant or whatever, but have it be timely and accurate and really just where you can really understand what's going on and not just is something true or not, but what is the narrative.
0:31Elon MuskSo the thing that I think most people don't probably you do, but most people don't quite appreciate is that the media controls the narrative. So there are many things that could be talked about in the world, but only a few things could fit on the front page.
0:46Elon MuskBut Twitter doesn't have a limitation like that. So the public can control the narrative and the public can inform themselves as to what the narrative should be. That's a really big deal.
0:59Elon MuskSo it's a forum for called citizen journalism or for the public to get together and communicate in a way that was never possible before so you can really know what's going on.
1:17Elon MuskSo I think that that's really going to be essential for.
1:26Elon MuskA functioning democracy. So say like, what is the bedrock of a functioning democracy? It has to be free speech and a level playing field. That's why it's. The First Amendment was the first thing they did.
1:44Elon MuskLike we gotta figure, we gotta make sure freedom of speech. And why did they do that? It's because where they came from there wasn't freedom of speech. And once you lose freedom of speech, you don't get it back.
2:01Elon MuskSo that's why we must protect it at all costs.
2:05InterviewerThank you. On the core principles, if we want to call them that, you just went over citizen journalism. Power to the people and a level playing field. That's what you mean by democratic.
2:17InterviewerWe've also heard you say core principles of authentic, informative and entertaining. Accurate. You just went over and brand safe. Where are you on these?
2:27Elon MuskYeah, I mean, I think some of these are, you know, a little at odds. You know, brand safe I think really means like where advertising is displayed, that the advertiser gets to, to choose what material is near that advertising.
2:47Elon MuskSo if it's something, you know, if it's some sort of like a, like a train accident or a war scene, then probably a family friendly brand is not going to want to advertise right next to that, you know, or, you know, it can't be like, here's a bleak war scene, would you like to buy a hamburger?
3:13Elon MuskWould be like awkward, you know, so that's understandable. You want to put advertising next to content where it makes sense, but the content in general needs to be authentic and informative, even if it is controversial or jarring.
3:32Elon MuskAnd yeah, and I think people need to be able to choose to some degree what content they want to see. And of course on Twitter you can. So but really we want it to be fundamentally, it's a place you go to to learn what's going on and get the real story.
3:53Elon MuskThat's what the truth, the whole truth. And it's going to be more than, I would like to say, nothing but the truth. That's hard. It's going to be a lot of
4:05InterviewerBS there truth and more.
4:08Elon MuskThere'll be lies for sure, but you want to have the truth and you want to bubble up the truth and be able to sort of sort out really want truth with the least amount of error.
4:22InterviewerSo you've said Twitter is alive. Another way that's described is it's where news happens, as you just said. So a couple here, Patrick Mahomes and Steph Curry talking to each other.
4:34InterviewerRihanna speaking directly to her fans or in crypto, SBF and cz. We're having the conversation directly on Twitter. Sam Altman, you know, launched ChatGPT, announces it on Twitter. Paul Graham takes up a tweet on it.
4:53InterviewerYou're tweeting on it. I think 50,000 tweets happened there before it was picked up by the mainstream media, just in the first couple of days. And so in, you know, talk to us about how can the media catch up if they're on Twitter, they can be seeing these tweets and posting if they're not on Twitter, is there no way to catch up?
5:14InterviewerLike, how does the traditional media and Citizen journalism and 50,000 tweets on an important subject, how do those intersect and how does the media catch up?
5:23Elon MuskWell, just as I'm sure many of you use Twitter, Twitter is happening in real time. So if you contrast that to what's happening in a newspaper, they have to learn the information, propose an article to their editor, get it approved, write the article, get it edited, figure out which day it's going to get published on.
5:46Elon MuskAnd so the news is actually the thing that happened is being reported on, you know, three, four days, sometimes a week late. And if it happens on a weekend, then it's like, yeah, at least three days type of thing.
6:00Elon MuskSo ChatGPT was huge news for several days on Twitter before there was any news articles about it in major publications. So I think, especially if one is Say, thinking about investing in things, you want to have information that is as timely and accurate as possible.
6:19Elon MuskThere's no better source than Twitter for that.
6:22InterviewerThat's certainly been my experience. So Paul Graham, who's a legend in tech, a legend on Twitter, I think he has tweeted that he's 80% left leaning probably, if he had to put him on the scale.
6:34InterviewerSo not someone, you know, who's not deemed and revered by all sides of the spectrum. He has said, you know, consistent with your accuracy point, he has said how important accuracy is.
6:46InterviewerAnd on Twitter he said, you know, you should be default skeptical of any news story about Twitter and assume it's default wrong. Because not only do some journalists have the agenda, but the source has the agenda.
6:58InterviewerAnd it's so easy to go through the chain of inaccuracy or, you know, outright falsehood. Is he right about this? And, you know, if so, how can accuracy about Twitter and about you be conducted by the traditional media, if at all?
7:19InterviewerDoes a PR department help, which you
7:22Elon Muskfamously don't have PR departments? The right name for PR is propaganda. And I always thought maybe we should have a VP of propaganda that would be, I think, just more honest and also a VP of witchcraft.
7:41Elon MuskI thought it would be like, those would be two great ones. So I mean, the thing that, that if you pick up any given newspaper and go through and read the whole thing and say, how many of those stories are positive about anything at all?
8:03Elon MuskAlmost none. So if something is newsworthy, it is going to have a negative slant. Whether it is positive or not. There's like something in journalism that they've been trained to basically never write a positive story about anything.
8:19Elon MuskOnce in a while you see a puff piece, but it's rare. So anything that's newsworthy will get written about. Anything that's written about will go through a negativity lens.
8:30Elon MuskAnd so you therefore have a bizarrely negative view of the world. If you draw your information from newspapers, this is simply, I mean, a fact. So on Twitter you can get a much more balanced, positive, negative situation.
8:48Elon MuskIt doesn't have that bias quite as much. It's probably still a little bit of negativity bias, but much less so. So, you know, I think it's really, I'm not sure what the legacy media does.
9:02Elon MuskI mean, at this point, really, Twitter is, by the way, the number one news app in the world. So in terms of what people download for news, it's number one.
9:13Elon MuskThere's 500 million active users, 250 million daily users of Which I'd say there's probably, you know, 180 million, what I call significant daily users, where it's a meaningful amount of time.
9:31Elon MuskSo, like, the average amount of time that people spend on Twitter per day of that 250 million is around half an hour or so. So what we have is the thing that's like, I think most interesting is there's about 120 to 130 million hours of human attention per day on Twitter every single day, on average.
9:58Elon MuskWhich I think comes to a really interesting point, which is to just. It's startling how poorly monetized that is, because you have to say, how valuable Is that attention?
10:10Elon Musk130 million hours of human attention per day of people that read. So these are generally the smartest people in the world, the most influential people in the world, and you have 130 million hours of their time per day.
10:26Elon MuskThat's a lot. So currently Twitter makes about 5 or 6 cents per hour of that time. I think this is poorly monetized.
10:42InterviewerPaul Graham's attention. Paul Graham's half hour of attention is worth more than that.
10:47Elon MuskYeah, I mean, if I'm spending two hours a day on Twitter, like, whatever ads are coming through are getting my attention, getting your attention, getting everyone in the room's attention, your time is incredibly valuable.
11:04Elon MuskSo now the thing is, we need to actually serve ads that are relevant and useful. And I think as we do that, we can probably at least get it to like 15 cents an hour.
11:16Elon Musk20 cents an hour. Yeah, a quarter. So I think the actual potential here for Twitter revenue is gigantic. And it's going to be a win, win situation, which is that if you are served advertising that you find timely and relevant with products and services that are useful to you, that's good for you and good for the advertiser advertising.
11:44Elon MuskAnd the limit of relevance is content.
11:48InterviewerSo in the next theme that's out there, that's often an inaccurate narrative is that you're indifferent to misinformation or other narratives get put out in the media, that you actually want misinformation on Twitter when, as you've just stated, you want it to be the most accurate in the world.
12:07InterviewerSo, community notes. I'm going to breeze through a couple of these before asking you about them. Community notes are the fact checking by power to the people on Twitter.
12:16InterviewerSo correcting government misstatements from the White House, correcting candidate misstatement from failed gubernatorial candidate Kerry lake that Ron DeSantis had been endorsed by George Soros. Adding context, while the spy balloon was over Billings, Montana to a tweet that could have been taken to Spiral and mean it had been shot down over Billings with that photo.
12:43InterviewerAnd adding context to that preventing a conspiracy theory of train derailments are purposeful or nefarious as opposed to 1,700 per year. Quickly corrected before a right wing conspiracy theory could get going.
12:58InterviewerCompany misstatements or statements. Misstatements about companies, I should say. So the tweet that said Google set a badge machine to tell you if you were terminated or not. And adding context that no, they had been emailed on Coinbase that they'd been told they had to stop staking by regulators.
13:18InterviewerFact check Very, very quickly. So how can this scale, this neutral fact checking, which seems elusive in fact checking, but Twitter seems to have a handle on it. But how does it scale and how does it avoid being hijacked by either side of an issue or political spectrum trying to hijack Community Notes to not have it be neutral.
13:41Elon MuskYeah. There's a white paper on community notes that I recommend reading. In fact, I'll tweet it out so that people can have easy access to it because it's really quite a clever idea.
13:57Elon MuskIt takes the viewpoint of someone. Think of it in a way like page rank for pages as applied to people. Which is that as people build credibility in how they review notes, they build up enough credibility to actually write notes and then those notes are then rated by others and depending upon the credibility of.
14:24Elon MuskOf the people rating your note, your credibility score gets affected. So it's sort of like collection of credibility.
14:32InterviewerPage rank.
14:33Elon MuskPage rank. Page rank for credibility.
14:35InterviewerBut there were link farms created in faraway places to spam PageRank. So that's going to be attempted, but you're going to apply your.
14:45Elon MuskYes.
14:46InterviewerSoftware skills and things to prevent that.
14:48Elon MuskIn order to be a notes contributor, you have to be a verified person, I think. Yeah. So you have to have. And it takes a while to get. You can't.
15:00Elon MuskSuddenly you will have. No. If you just. When you just start out, you will start off with no credibility score.
15:06InterviewerYeah. So it'd be very hard to link farm.
15:08Elon MuskYes. And when we actively look at any attempts to game the system and shut them down and remove them from the system if they're turned to be not real people or if they seem to be brigading because there are deliberate attempts to manipulate Community Notes, we also make the community notes source code is open and available.
15:34Elon MuskSo you can see. You can basically see everything. So that's in the white paper or blinked. It's it's not on the white paper, but it's available on the Internet.
15:47Elon MuskOkay, it's available, yeah, you can search for it. So you can see exactly how Community Notes is calculating things, what changes are made to Community Notes. And we'll keep iterating.
15:58Elon MuskAnd the goal is to have truth with the least amount of error. So, you know, there's always like, what is truth? And I think the important, like one way to sort of, for example, say, like, if someone really aspired to the truth, if they really aspire to the truth, they must acknowledge that there is some probability that what they think is untrue.
16:21Elon MuskIf somebody thinks there's no probability, 0% that what they think. If somebody thinks that they're trying to claim to you that what they're saying is true with 100% probability, there's a 100% probability they are lying.
16:38Elon MuskSo truth with acknowledged error, where you aim to minimize that error over time. That's what Community Notes is. I think also once someone gets community noted, they think twice about being deceptive in the future.
16:56Elon MuskSo you start getting noted a few times.
16:59InterviewerPeople are like, oh, I know someone who's been community noted.
17:03Elon MuskYeah,
17:05Interviewerso this no one's immune. Meaning you've been community noted on this CNN fake Chiron. CNN made no such claim that, you know, free speech on Twitter by allowing people to speak freely.
17:20InterviewerAnd you were quickly community noted a satirical tweet and Community said, this is not accurate. Is this the one you tweeted Community notes for the win? I think may have, yeah.
17:31Elon MuskI mean, the important thing is that anyone can be noted, including me. And in fact, I wanted to make a note of being noted that the point is that if I can be noted, anyone can be noted, including advertisers.
17:45Elon MuskSo we've had a few cases where the advertising wasn't accurate and it got noted.
17:50InterviewerOh, the mortgage one. Loan money to yourself. I think I saw that.
17:54Elon MuskLoan money to yourself. Yeah, sure, right.
17:57InterviewerBut it's your own customer and they can be noted and then presumably change the ad.
18:02Elon MuskYes. I mean, this will, I think, be very helpful in truth and advertising. Okay, so like, so I can't emphasize enough. The goal is rigorous pursuit of the truth, aspirationally, the whole truth, and the least amount of untruth.
18:22InterviewerSo let's talk back about brand safety. We'll go through two quick ones here. One narrative that's out there that probably affected advertisers and agencies was Twitter was going to become this hotbed of hate speech.
18:37InterviewerAnd shortly after the acquisition, there was this bot attack you've talked about, that seemed designed to try to make that a self fulfilling prophecy actually, until it was quickly defeated by your team.
18:50InterviewerAnd there's 50% less hate speech according to what your team has put out. This is a graphic than pre acquisition. So not only is it a priority for you, but less half as much as before.
19:05InterviewerAnd then on child sexual exploitation, something that's been so important to you, 800k suspended accounts, that's four times more than in any month of the prior year of your ownership and a 99% reduction in successful searches for CSE patterns.
19:22InterviewerSo talk to us about how much of a priority this is and how successful you've been at it. But then also presumably more can be done.
19:29Elon MuskYeah. I've repeatedly said to the trust and safety team at Twitter that the number one priority, which will always be the number one priority, no matter what, is ensuring that children are safe on Twitter, that there's no child exploitation.
19:47Elon MuskSo that is number one priority always and forever. And what I've been told is that we've done more to eliminate this on Twitter in the last four months than has been done in the last 10 years and it will continue to be number one priority.
20:03Elon MuskYou know, 100 fold. Reduction in CSC search patterns is pretty gigantic to say the least. So yeah, it's absolute number one.
20:15InterviewerSo on continued on brand safety, you know, this global alliance for Responsible media's brand safety floor, the Garm, you know, Twitter business had tweeted out earlier in the year that in testing, 99%, at least 99% of measured AD impressions appeared on contact that exceeded that floor.
20:34InterviewerSo, you know, what methods do you have for your advertisers when you're talking to a cmo, to the head of an agency? Just in total, I think you touched on this a little, if there's anything to add.
20:43InterviewerBut brand safety is in fact a top priority with a team all over it and technology and humans focused on the subject.
20:50Elon MuskYeah, as I said, with respect to brand safety, it really depends a lot on the brand. I mean, if you've got sort of, you know, kind of. By the way, Disney is a major advertiser on Twitter worldwide.
21:03Elon MuskOne of our biggest advertisers. Apple's one of our biggest advertisers. But Disney of course wants to, does not want to have their ads next to things that aren't appropriate for a family audience.
21:16Elon MuskBut there are other products that are kind of more, you know, R rated, if you will, and so they're more comfortable with being Their advertising being in the equivalent of like an R rated movie or something like that.
21:32Elon MuskSo brand safety varies depending upon what brand you're talking about. Is it a family brand or less family brand? But advertisers can actually adjust how much, what content they're comfortable having their advertising appear next to.
21:49Elon MuskThe same is true on tv. So the, you know, the advertising that you'll see at say 7pm is different from the advertising that you'll see at midnight. And we have the same functionality on Twitter.
22:02Elon MuskSo it's really up to the advertiser what where they want to put their content. But I think by far the most important thing is that the advertising is effective, that it is relevant and that it moves the needle for a company.
22:21Elon MuskThe advertising relevance is the most gigantic thing. And this is going to sound totally bizarre, but Twitter did not consider relevance in advertising until three months ago. And in fact, if you've used Twitter for a long time, which probably many of you have, you should say like, how many products have you bought off Twitter?
22:45Elon MuskProbably zero, judging by the laughter. Probably zero. And your time is incredibly valuable.
22:55InterviewerFlamethrower. Knowing about a flamethrower, well, I mean
22:58Elon Muskit's possible that they might have bought things from, you know, content based tweets because the content that's recommended is reasonably relevant, but the advertising has not. Been. So as we move to shift towards the advertising being relevant and timely, this is really, like I said, advertising that is relevant and timely is information, it is content.
23:26Elon MuskAnd the value of the time of 130 million person hours of the smartest people on earth is insanely valuable. And frankly, historically, with the advertising being mostly irrelevant in the past, we've been wasting people's time and that's not good.
23:51Elon MuskGoing forward, Twitter will have very relevant, useful advertising. And because it is useful, because it is relevant, there will be a massive increase in revenue because it is now useful.
24:10Elon MuskSo I'm very optimistic about the future. It's been a very difficult four months, but I'm optimistic about the future.
24:18InterviewerAppreciate that. So let's get back to Democratic. A democratic platform for all the, you know, you've said there's no permanent suspensions of anyone on the left. You've brought back both left and right.
24:34InterviewerBut I think what you've tweeted is you had to unban a lot more on the right because that's who was banned for the most part. But your goal is equally unbanned, complete, equal level playing field for all sides of the political spectrum.
24:50Elon MuskYeah, I mean, I think the objective Reality for anyone looking at Twitter for the longest time was that Twitter was at a massive thumb on the scale on the left side.
25:01Elon MuskTwitter would ban and suspend accounts on the right 10 times more than on the left. So naturally, what you'd expect, frankly, because where are we? We're in San Francisco, which is deep, deep blue.
25:18Elon MuskSo Twitter was controlled by the far left. So that the natural thing that would happen then is suppression of moderates, not just on the. Not just suppression of the right, but even suppression of moderate voices.
25:33Elon MuskSo. But that's not conducive to a healthy national dialogue. In order to have a healthy national dialogue, you have to represent the whole country, and you have to represent everyone in other countries, too.
25:46Elon MuskIt's got to be, you know, that's the only way to have a town square. And so, yeah, there were disproportionately more accounts, unsuspended and unshadow, banned on the right because Twitter had a huge thumb on the scale in favor of the left.
26:04Elon MuskSo that's. But if you say, like, have we been suspending accounts on the left? Have we been shadow banning counts on the left? No, we haven't. So. Because exactly what I said is we are doing, which is to make it an even playing field.
26:23Elon MuskAnd you know something is freedom of speech. When it is. When you're hearing speech from someone you don't like, and what you're saying, you don't like what they're saying.
26:34Elon MuskOtherwise it's not free speech. And if you don't have that ability, then sooner or later, that suppression of speech is going to be turned on you. So it is a good sign if you're seeing people you don't like say things you don't like.
26:52Elon MuskThat is a good sign, not a bad sign, because it means. And provided you can say your piece, too.
27:02Elon MuskI think this is fundamental. I mean, the reason I did the Twitter acquisition was not because I thought this would be some lucrative gold mine. And in fact, it has been arduous and difficult with a massive, you know, and being dumped on every day.
27:22Elon MuskWell, that's not the most fun thing in the world. But if we do not have a strong foundation of free speech, I fear for the future of our civilization.
27:37Elon MuskWe must have this. That's why I did it.
27:42InterviewerThank you for doing it. Switching gears, a media narrative that, you know, may have some accuracy. They're not all inaccurate. The code base is difficult to change. Tech debt, unwieldy.
27:58InterviewerYou know, Rube Goldberg machine is a term you've used. So is fractal Rube Goldberg, fractal, Rube Goldberg. This is at least partially accurate, if not accurate.
28:09Elon MuskYes. Well, yes, the code base is like a Rube Goldberg machine. And when you zoom in on one part of the Rube Goldberg machine, there's another Rube Goldberg machine and then another one.
28:25InterviewerThis is your penguin.
28:26Elon MuskThat's what I mean by the fractal fractal. As you zoom in, it's just another fractal and another fractal fractal, root, Goldberg machine. So it's quite difficult to keep this thing running and then also difficult to advance the product because it is really overly complex, to say the least.
28:49Elon MuskAnd we'll make a change, what appears to be a small change somewhere that then causes a massive disruption. So, for example, just yesterday we made what we thought was a small change, and we'll put out the.
29:06Elon MuskWe want to be in the sort of full disclosure of everything, including, you know, gruesome details. So. But essentially there was what was supposed to be a small change to 1% of.
29:23Elon MuskOf the Twitter user base ended up being a catastrophic change to 100% of the Twitter user base. And we don't have enough time to go into the details, but there was a Boolean flag in the Twitter front end that should not have been there, and we fixed that.
29:54Elon MuskLet me give you a silly example. At one point, there was a problem with Twitter spaces, where suspended users were able to join conversations even though they were suspended.
30:05Elon MuskAnd we temporarily turned off access to Twitter spaces, which then made anyone who was using the Twitter Android app unable to like tweets. Now, how those things are connected is not clear.
30:24Elon MuskSo if you were
30:27Interviewerin the Rube Goldberg fractally.
30:28Elon MuskThat's what I'm saying. So if you had an iOS app, you could like tweets. If you're on the web app, you could like tweets, but not if you had an Android app because of spaces.
30:39Elon MuskAnd you're like, what? So, you know, so one of the things we're doing, there's a lot of work behind the scenes in simplifying the code base, getting rid of extraneous features, and enabling Twitter to evolve more rapidly in the future.
30:56Elon MuskBut it requires a lot of cleanup, essentially.
31:00InterviewerSo, you know, you've grown users despite this lean engineering team and the code base being unwieldy and cloud spend 40% down, cut out a data center. Is this due to the strength of the engineering team that you've been able to achieve this and introduce subscription and other features while trying to hold it all together?
31:26InterviewerAnd where does that engineering team go to accomplish both the code base enhancements and all the features you've said you want to introduce?
31:37Elon MuskYeah, I mean, I think on balance we're doing okay because. And just to give you a sense of where things were at the close of acquisition on say October 29, Twitter was tracking to a negative $3 billion a year burn rate and had 1 billion in the bank.
32:03Elon MuskSo that's a pretty dire situation. If 2023 had been a normal year, Twitter would have done something on the order of four and a half billion in revenue, 4.5 billion in cost, roughly break even.
32:17Elon MuskBut when you add one and a half billion of debt servicing to that and a massive decline in advertising, some of it's cyclic, some of it political, but call it at least a 50% decline in revenue.
32:33Elon MuskRoughly 50% decline in revenue. You've got over $3 billion negative. Twitter has some revenue that's not advertising based. So data services. Yeah, exactly. Data subscriptions and whatnot. So, but it was in the absence of action, Twitter would have had 6 billion in cost and 3 billion revenue.
33:02Elon MuskSo minus 3 billion and it was a billion in the bank. So it would have gone bankrupt in four months. So immediate and drastic action had to be taken, which was.
33:12Elon MuskAnd so we actually have now cut the burn to the non interest burn to roughly 1.5 billion. So we've got a billion and a half of debt servicing and a billion and a half of expenditures.
33:28Elon MuskWe went from three data centers to two and reduced our cloud expenditures significantly and while at the same time having the fastest product evolution in Twitter's history. So overall, not bad.
33:48Elon MuskThere have been a few bumps along the road obviously, but this is to be expected. And now I think we have the opportunity to grow it into something quite spectacular.
34:05Elon MuskWe have the highest total user minutes in quarter history. So the real number to care about is actually not the MDAO monthly, which is theoretically monetizable daily active users, but it's user time.
34:26Elon MuskHow many total user hours per day do you have? That's the real figure of merit because one could, for example, say, go to 300 million daily active users, but if they spent less time on the system, cumulatively that would actually be a downgrade.
34:49Elon MuskIt's how much human attention are you worth? And that's why I think, like I said, the really profound thing is what Twitter has is roughly 130 million hours of, of the smartest, most influential people on earth every single day.
35:11Elon MuskThere's nothing else that has that. I mean, there are social Networks that have more users, but they do not have the smart, influential people. They don't have you.
35:25InterviewerSo if I do the math on what you've said about the advertiser pause and revenue decline and the cost changes, it's EBITDA profitable today. And then you're looking for cash flow break even after debt service.
35:40Elon MuskWell, it's EBITDA profitable, but the D in the EBITDA is quite big.
35:44InterviewerThe D is big, right. When do you get to cash flow break even with the D? When do you get the cash flow break even after that D?
35:50Elon MuskThis is where we need to focus on the E part.
35:53InterviewerYes.
35:56Elon MuskI hope we pay taxes and the tea. Yeah. So like I said, I mean, we're getting to the point where we're close to having the total expenditures for the company, excluding debt, roughly equal to the debt.
36:14Elon MuskOkay. Cash flow. Yeah, that's what I think. Like, I think we'll be there in Q2, in Q2. And then like, I don't, I definitely don't want to count chickens before the hatch or jinx it or anything, but I think we've got a shot at being cash flow positive next quarter.
36:35InterviewerSo some of that will depend on advertisers. So we'll talk quickly about advertising. You've mentioned it a few times. The value is clear. 147 billion impressions on Twitter of World Cup 22 and 50% year over year growth in NFL video views.
36:53InterviewerYou know, 39% increase in Super bowl mentions. The NFL putting out engagements, never been higher. And then WPP CEO Mark Reed said, 10 days or however long ago this was, February 24th, Twitter seems to be more stable and I think clients, advertising clients, presumably here will look about coming back to Twitter.
37:17InterviewerSo are you in touch with agency and CMOs and is this a theme? I think we just saw McDonald's or others coming back as they realize you are absolutely focused on the things you were said not to be focused on in terms of brand safety, et cetera.
37:33Elon MuskYeah, I mean, I think really what I'd say to advertisers and brands is, you know, use Twitter yourself and believe what you see on Twitter, not what you read in the newspapers.
37:44Elon MuskBecause what you see on Twitter is the real thing and what you read in newspapers is not. And I'd like to thank Mark Reed and WPP for their support and Publicis and others and for the advertisers that have stuck with us like Disney and Apple.
38:01Elon MuskThank you.
38:03InterviewerSo that's brand advertising you've mentioned a few times. Performance advertising. I Think I've heard your story about White Lotus, which maybe you can share here. You know, performance based advertising has been very lucrative for other companies and can be made more relevant on a more narrow cast basis, if you will, than pure brand advertising.
38:24InterviewerSo when do you introduce performance based advertising and scale it?
38:29Elon MuskOh, we introduce from the moment the acquisition closes. Like we have to have. Performance based advertising is really just advertising that is relevant. In fact, we should really have aspirationally 0 non performance based advertising.
38:48Elon MuskYou know, we want advertising that matters. People's attention is precious. We should not serve them ads that are annoying or irrelevant or strident or ugly. And it's interesting you mention White Lotus.
39:02Elon MuskI actually was talking to David Zaslav, who's great, and he was like, hey, why can't we put a White Lotus trailer every time someone mentions White Lotus on Twitter?
39:12Elon MuskI'm like, absolutely. So, like one of the like super obvious but profound things that we're doing is enabling keyword advertising so that you can enter the keywords and like White Lotus.
39:30Elon MuskAnd if somebody mentions White Lotus, you put the White Lotus trailer there. I mean, this sounds very obvious.
39:38InterviewerYou don't need GPT3 for this.
39:40Elon MuskWe don't need advanced AI for this one. So you know, it's sort of just Google AdWords but applied to tweets and the home timeline and replies and everywhere else because you'll often have very sort of long, deep conversations, people going on talking about movies, TV products and whatnot.
40:01Elon MuskAnd that's the perfect opportunity for advertisers to provide their message. You know, if I think about something, for example, like Starlink, which does advertise in various media for Starlink would want to advertise to users in regions that are not already saturated.
40:23Elon MuskSo Starlink tends to be saturated in urban areas, but is not saturated in rural areas. And so what Starlink would like to do is like to say, please show the ad in to rural users with a slow connection.
40:42Elon MuskAnd then the simple message is do you want faster Internet for less money? Click. Probably you do. And Twitter needs to be able to do a simple thing like that.
40:54Elon MuskAnd it will be. And in fact it is already able to do that. We just haven't fully rolled it out. So we're I think around 20% ish. But by the end of this year, almost all advertising will be should be
41:09Interviewerreasonably relevant and that your Starlink example comes back to your disposable income, if you want to, or the education level and the ability to buy and afford the Starlink subscription of the Twitter user.
41:21InterviewerLike it also dovetails back into that.
41:24Elon MuskYeah, absolutely. So I think there's also an opportunity here to have advertising be much like really improve the relevance of advertising using AI in the sense that if you, based on what tweets, somebody views, likes and whatever, you can actually populate a parameter space, an ML parameter space.
42:00Elon MuskAnd then you can take an ad and even if you say nothing about that ad, after it's dropped in the Twitter system and it has 10,000 views, you populate a parameter space of the ad and then you correlate the user parameter space in the ad parameter space.
42:13Elon MuskAnd. And then you don't need to do any demographic targeting because you could be like, say it's a gardening ad. Well, you could be 20, 30, 40, you could be 70 years old, any sex, whatever, it doesn't matter.
42:26Elon MuskWhat matters is you like gardening and that's the ad that should be shown. And so I think we can get away from a lot of the sort of targeting by age range and sex and whatever in favor of targeting by interest.
42:43Elon MuskAnd a lot of these demographic targeting was done coming from a TV or newspaper era where you don't have interaction with the user. You just have to kind of guess because it's a one way street in tv, but on Twitter it's not a one way street.
42:59Elon MuskThere's continuous interaction. So I think we can just have a profoundly more useful advertising experience.
43:07InterviewerSo let's close on Twitter before getting to another couple companies. I've heard that you run the vision you're building towards. I think you've called it X or the Everything app.
43:18InterviewerTell us about it beyond just improving the advertising. And what will we be able to do on Twitter in your grandest vision?
43:27Elon MuskYeah, so X.com is. So I think it's possible to create a very powerful finance experience, basically, like PayPal is kind of like a halfway version of what I think could be done in payments and finance.
43:56Elon MuskAnd so you want to be like, let's say like you want to be able to send money easily from one account on X Twitter to another account effortlessly with one click.
44:10Elon MuskYou want to be able to, I think, earn interest on the money. You want to be able to
44:17Interviewerhave
44:17Elon Muskdebt so your interest can go negative. I mean, basically I think it's possible to become the biggest financial institution in the world. So just by providing people with convenient payment options.
44:34Elon MuskWe don't have the time to go into it in detail here, except if we just make the app more and more useful, people will use it more and it'll Be great.
44:47Elon MuskI mean, yeah. So you'll see.
44:50InterviewerOkay, we're still on Twitter for a moment, but we had, you know, in Austin, thank you for hosting at the Investor Day and you showcased 16 executives on stage at various times with you, an incredibly deep and built out management team.
45:08InterviewerAnd I think the executive team with you at Twitter, you know, is perhaps a bit leaner. Let's just. Maybe there's a media narrative here that's accurate.
45:20Elon MuskHe does have a black turtleneck. Do you need anything more? I don't think so.
45:27InterviewerWhen does the Twitter management team have that bench like you showcased at the Gigafactory?
45:35Elon MuskWell, I think it takes a long time to build a strong management team.
45:43Elon MuskWe built the Tesla management team over 20 years. So I think Twitter is an easier problem than Tesla by a long shot. But it'll take some time to build the team and, I don't know, probably a few years.
46:07InterviewerAnd switching gears, you shared Master Plan 3 at the Gigafactory and you know, the edit that came to my mind was, you know, Master Planet, after your first piece there on sustainable energy for all of Earth, can you take us through that positive, optimistic, mathematically underpinned vision for our planet?
46:34Elon MuskOkay, there's not a lot of time to do that, but I guess the overall message is that we can absolutely make Earth, turn Earth into a sustainable energy economy, fully sustainable, using lithium ion batteries, solar, wind, as well as geothermal, nuclear and other things.
46:58Elon MuskBut primarily it will be solar and wind and lithium ion batteries. And our calculation is you need roughly 240 terawatt hours of lithium ion batteries. Most of those will be iron phosphate of the iron phosphate variety.
47:13Elon MuskIn other words, with a primarily iron cathode, which is a plantable material. In fact, Earth is the number one element on Earth is actually iron. A little factoid, I think Earth by mass is about 32% iron and about 30% oxygen.
47:31Elon MuskAnd then everything else is miscellaneous. So we're like a muddy rust ball. So plenty of iron. Basically the materials needed to make 240 terawatt hours of batteries are actually plentiful on Earth.
47:51Elon MuskWe don't need to mow down the Amazon or anything like that. We don't need to basically do anything terrible to the environment to create 240 terawatt hours of batteries.
48:04Elon MuskIn fact, there will be less mining required in a sustainable energy economy than is currently required. Really, this is a message of hope and optimism grounded in physical reality.
48:23Elon MuskIt is not wishful thinking. So we should be excited and inspired about the future and I'm not suggesting complacency or anything like that. And getting there faster is better than getting there slower.
48:40Elon MuskBut what we don't need to live some terrible austere life and give up the things that we like. You can have the things that you like, in fact, even more of them.
48:52Elon MuskAnd the environment can be good. All the good things are possible is what I'm saying. We should be excited and optimistic about the future. We need to go build it.
49:07Elon MuskIt's a lot of work, but you should not feel sad about the future regarding sustainable energy. It will happen. We just want to make it happen faster rather than slower.
49:22InterviewerSo that was the first big takeaway, you know, the next one that I had. Was this your next phase of vertical integration, the relentless first principles, thinking on vehicle design, battery design, factory optimization, you know, at the same time as the vehicle.
49:41InterviewerThat could lead to a target, I guess, of this, you know, 50% step change in cost when the new gen eventually comes around. Can you just take us through the quick summary of that?
49:56InterviewerAnd it unlocks the next wave of the tam because there's price elasticity is what you were sharing on this subject as the second big takeaway for Tesla.
50:09Elon MuskYeah, I mean there's a clear path to making a vehicle a smaller vehicle that is roughly half the production cost and difficulty of our Model 3. That vehicle will be, you know, really used almost entirely in autonomous mode.
50:30Elon MuskThe thing that is really gigantic for Tesla is autonomy. And if people have used the Tesla full self driving and have seen how rapidly the full self driving capability has been evolving, it should be obvious that that is by far the most profound thing.
50:53Elon MuskThe sort of total addressable market stuff. It's like, guys, is actually not the right way to think about it. It's like passenger vehicles right now only see about 10 to 12 hours of use per week.
51:09Elon MuskThere's 168 hours in a week. If those vehicles are autonomous, they're probably going to get used for 50 or 60 hours a week. That's a 5x increase in the value of a car and it costs the same to make the car.
51:25Elon MuskAt that point you basically have software margins in a hardware product. It's insane. Total addressable market is everyone, all humans
51:38Interviewerpowerful? So let's switch gears to SpaceX hitting first. Starlink, what can you tell us about Starlink and the scale and deployment and how that's going?
51:51Elon MuskYeah, the Starlink team is doing an amazing job. More than half of all satellites in orbit right now are Starlink satellites. So if you add up all Satellites launched, cumulatively, they are less than Starlink.
52:08Elon MuskSo Starlink is currently providing global connectivity. You can get connectivity anywhere on Earth from the most remote part of Antarctica to San Francisco, anywhere that's full global connectivity, high bandwidth and low latency.
52:27Elon MuskThe latency is important because unless you're in low Earth orbit, you cannot get low latency. The geostationary satellites are up, you know,
52:42Elon MuskVery high. You've sort of got sometimes up to a second of latency from a geostationary satellite, all things inclusive. Whereas with Starlink satellites, we believe we can get the latency under 20 milliseconds.
52:58Elon MuskSo. And in fact, for international communications, an interesting thing is that in fiber, light travels much slower than in aero vacuum. So in rough approximation, light travels about 300 km per millisecond in air and vacuum, but only just roughly over 200 kilometers per second per millisecond in fiber.
53:26Elon MuskSo you've got like a sort of roughly 40% increase in speed of light going through the Starlink system than through fiber. And it can also follow a more direct route.
53:42Elon MuskInstead of following the sort of coastline of the continents, it can actually
53:52Interviewerhave
53:52Elon Muska more direct route. So it's a shorter route and inherently faster from a physics standpoint. So it connects the world way better than fiber. And it will provide and is providing connectivity to people that either never had it before or where their options were extremely expensive or very low bandwidth.
54:17Elon MuskSo it's helping out a lot of communities that never had access. Especially when you consider that education is digital these days. That's really how you can learn anything. You can basically learn anything.
54:29Elon MuskYou can basically learn anything for free on the Internet, if you have the Internet. So in terms of providing education abilities to remote communities, Starlink is doing a lot of good in that regard.
54:43InterviewerLastly, the launch, whether Falcon 9 Heavy or Starship, I think you had the static fire test. That went well. And what can you tell us about the next phase on launch for Starship?
55:03Elon MuskYeah, so we're getting ready for the first launch of Starship. This is a very difficult program. The rocket is roughly two and a half times the thrust of a Saturn V.
55:17Elon MuskSo if it, therefore, once it reaches orbit, it will be by far the biggest rocket to reach orbit. But more importantly, it is designed to be the first fully reusable rocket, orbital rocket ever.
55:30Elon MuskSo the key to extending life beyond Earth is a fully and rapidly reusable orbital rocket. This is a very hard problem given the constraints of Earth. Earth has a thick atmosphere and strong gravity.
55:46Elon MuskIt is only barely possible to do this that's why it has not been done before. So. But we are getting, we're getting close for our first orbital attempt of starship.
55:58Elon MuskHopefully in the next month or so we'll have our first attempt. I'm not saying it'll get to orbit but I am guaranteeing excitement.
56:10Elon MuskSo it won't be boring. I think it's got, I don't know, hopefully about 50% chance of reaching orbit. And then we've got, we're building a whole series of starships in South Texas.
56:29Elon MuskAnd so I think we've got hopefully about an 80% chance of reaching orbit this year. It'll probably take us a couple more years to achieve full and rapid reusability.
56:40Elon MuskWhich I can't emphasize enough is it is the profound breakthrough that is needed to extend life beyond Earth because it lowers the cost of access to space by orders of magnitude.
56:58Elon MuskIn the same way that let's say there were no airplanes that were reusable. How expensive would air flight be? It would be insane. You'd have to buy a new airplane every time you flew somewhere and you have to tow a small airplane behind you for the return flight.
57:14Elon MuskSo you know, that's just, you're not going to scale. So assuming things go well there, this vehicle is, could make life multi planetary. That's a really big deal. It could make life on Mars real.
57:36Elon MuskAnd I think that's, I mean that's one of the great filters that any civilization has to pass through which is does the civilization become multi planetary or not? This is one of the elements of the Fermi paradox.
57:54Elon MuskI mean I sort of wonder that if we are able to get to multi planetary that'll be a forcing function for ultimately improving space flight to become multi stellar to go to other star systems.
58:06Elon MuskAnd I think we may discover that there are many long dead one planet civilizations. We don't want to be one of those. We don't want to be one of those lame one planets.
58:19Elon MuskPlease.
58:22InterviewerI think we're going to wrap on that. Thank you, Elon Musk.