What do you think of Elon Musk? I see him as a compelling figure in today’s world, but, like many of his billionaire caste, he appears to be both brilliant and deeply flawed.
His fortune goes up and down depending on the latest quoted value of various stocks that he owns. In November of 2021, he was the first person whose net worth was estimated to exceed $300B. Significant losses followed, driven by devaluation of Tesla share prices. But as of November 2023, he is estimated to be worth somewhere between $219B and $241B (Bloomberg vs Forbes estimates)
How the Hell do you get to have $200B? Well, Wikipedia has a very extensive article on Elon Musk, and I’ll save you the trouble of reading it. He has displayed tremendous vision, imagination, and entrepreneurial courage. Over and over again he has invested in himself and he has been right often enough to become unimaginably wealthy. When I read the Wikipedia summary of his career, I was surprised at the breadth of his interests. Turns out Elon Musk is a lot more than just the Tesla guy.
- He became a computer geek at an early age, and at age twelve sold a computer program (Blastar) for $500 dollars in 1983.
- 1995 developed a computer mapping company which sold in 1999 for $307M of which Musk’s share was $22M.
- 1999, developed a company called XCom, which, after a merger with Paypal, was sold to eBay in 2002. Musk’s share? $175.8 Million.
- In 2002 invested $100M in Spacex, and eventually took over the work of the space shuttle. Spacex is now estimated by Reuters to be worth $150B, of which Musk owns about 40%.
- 2004 – for $6.5M became majority shareholder (and Chairman of the Board) in a recently incorporated car company called Tesla. In 2021, Tesla’s value exceeded $1Trillion, making it the biggest car company in the world. Musk’s share was estimate to be worth about $165B at the end of 2021.
- 2015, Spacex began $10B Starlink project. By 2023, Starlink owned roughly 3335 active satellites, about 50% of the world’s total.
- 2006 Musk invested in his cousins’ company SolarCity. By 2013, SolarCity was the second largest supplier of solar energy systems in the United States. In 2016, Tesla paid $2B for SolarCity and merged it with Tesla’s battery unit to form Tesla Energy.
- 2015 Musk co-founded OpenAI, an artificial intelligence company which went on to produce ChatGPT, probably the biggest and best AI software available for consumers today. (Since then, Musk has had a break-up with Open AI and has since founded xAI, a competing AI startup.)
- In 2016, Musk invested $100M in Neuralink, a company working on integrating “the human brain with artificial intelligence (AI) by creating devices that are embedded in the brain to facilitate its merging with machines.” Sounds crazy, right? In September 2023, the company received approval for human trials in a six-year study.
- In 2017, Musk founded the Boring Company, a tunneling entity focused on developing high speed underground people-mover technology.
- In 2022, he purchased Twitter for $44B, about which more will be said later.
There are several interesting things about that brief career summary. First, notice how many times he has moved from one success, one interest, to another. He sold his mapping company in 1999 and immediately invested in XCom which would become Paypal. He sold Paypal in 2002 and invested big in Spacex in 2002. He got Spacex going in 2002 and moved on to Tesla in 2004.
The second thing to notice is how fast he has added value. The financing for the computer mapping company in 1995 was $200,000, of which 10% was from Musk’s father. Four years later it was sold to Compaq for $307M. That $200 K initial financing returned more than $1500 for every dollar invested in only four years. Similarly, the $100M (a sizeable sum, to be sure) invested in Spacex in 2002 became $60B in less than 20 years.
The third item that springs to attention is how wide his interests are. He’s a computer geek who turned those skills into some highly marketable applications (city mapping, online banking, Paypal). But he has gone on from those computer centered applications to a much bigger sphere. Electric Cars, space travel, geosynchronous satellite communication, high speed underground transportation, man/machine interfacing – there seems to be no limit to what might capture his attention.
And last – the vision. He seems to have a remarkable ability to spot a vacuum and fill it. XCom was one of the first federally insured online banks. Tesla was the first company to pay any attention to the climate crisis and the opportunity that electric cars would represent. Spacex took over, on a private basis, a service that the giant government monopoly NASA was unable to continue. I love Spacex – the video of 3 Falcon heavy boosters landing dead on their targets is incredible. What a feat of engineering! Recoverable boosters are a major cost and time saving element of the Spacex program. Spacex filed a patent on the reusable rocket in 2004, only two years after the company’s inception. It is, reportedly, the only patent application Musk has ever filed.
Vision, agility, guts – he’s got it all.
BUT
Ah yes, there’s always a but, isn’t there? Actually there are many “buts”. Like these:
But…His response to the Covid epidemic was strange. In July of 2023, Forbes magazine published an article which tracked Musk’s commentary on Covid.
- March 2020 – “coronavirus panic is dumb”. “Musk sent a series of vitriolic tweets, threatening to file suit against Alameda County, to move Tesla’s headquarters, and to flout the rules and reopen his factory, all of which he eventually did. (New Yorker magazine)
- September 2020 – insists he will not take the vaccine
- December 2021 – whole family has been vaccinated because the science is unequivocal. But vaccine mandates are wrong.
- December 2022 – Fauci should be prosecuted.
- January 2023 – supports vaccines generally but the vaccine is potentially worse than the disease (Huh?)
- Feb 2023 – Anthony Fauci funded the creation of the Covid 19 in the Wuhan laboratory.
- May 2023 – no healthy young individuals have ever died from Covid (false)
- July 2023 – LeBron James son’s cardiac arrest was linked to the vaccine.
But… He stated that he came around to believe in the Covid vaccine but opposed vaccine mandates. How did he verbalize that opposition? He jumped on board the Freedom Convoy bandwagon. Asshole! Musk started with “Canadian truckers rule” and later, according to the National Post, sent tweets saying “It would appear that the so-called ‘fringe minority’ is actually the government….If the government had the mandate of the people, there would be a significant counter-protest. There is not, therefore they do not….Protesting in a Canadian winter shows real commitment!”
But… he has promised much but given little in terms of philanthropy. In 2012 he signed the Giving Pledge, committing to give his fortune to charities either during his lifetime or in his will. Sounds good right? But how’s that working out? “In 2020, Forbes gave Musk a philanthropy score of 1, because he had given away less than 1% of his net worth.” The accounting of his charitable giving looks mostly like shuffling money from one pocket to another– a great deal of Musk’s personal philanthropy has gone into funding the Musk foundation, which has not broken any records yet for charitable giving.
But…Musk describes himself as a “free speech absolutist”, and in 2022 that drove him to buy Twitter for some $44B. An article in The Economist in December 2022 ascribes the twitter purchase to Musk’s concerns that “Twitter had been captured by censorious left-wing scolds”. The Washington Post, in November of this year, again reported that Musk’s anti-woke biases have led him to transform Twitter. “Musk has said that he bought Twitter to combat the “woke mind virus,” in his goofy phrasing. The Economist explains that, having bought Twitter to defend free speech, Musk was obliged to compromise on his open forum “market square” concept. The surge in hate speech following his take-over forced him to try to restore some content moderation. When a Twitter account tracking Musk’s private jet location resulted in a “stalker” bothering his son, he suspended that twitter account. And, the Economist recounts, “Mr Musk even limited speech when it was bad for profits. After pranksters sent tweets aping brands like Pepsi (“Coke is better”) and Nestlé (“We steal your water and sell it back to you lol”), Twitter outlawed such behaviour to stop advertisers fleeing.”
The Economist summarized Musk’s Twitter experiments thusly: “moderation has no clean solutions, even for “technokings” with strong views on free speech. Free expression is not a problem with a solution bounded by the laws of physics that can be hacked together if only enough coders pull an all-nighter. It is a dilemma requiring messy trade-offs that leave no one happy. In such a business, humility and transparency count for a lot.” Humility and transparency are not Elon Musk’s strong suits. In fact, Musk’s use of the X (Twitter) platform has revealed him as anti-Semitic and anti-LGBTQ, although he denies both labels.
It’s interesting to note that while he denies the anti-LGBTQ leanings, in 2022 Vivian Musk came out as a transgender person and took her mother’s last name (Wilson). The name change application listed the reason as “gender identity and the fact that I no longer live with or wish to be related to my biological father in any way, shape or form.”
But….He’s a bully in the workplace. Several articles on the Twitter (X) acquisition paint the same picture – that Musk was arbitrary in decision making, that policy swung back and forth between too much and too little content moderation, that advice from senior advisors who actually understood the social networking industry parameters was often disregarded. The Wikipedia article expanded on that to highlight the obvious side-effect of that chaotic management style – that Musk is difficult to work for. They report “Musk’s handling of employees—whom he communicates with directly through mass emails—has been characterized as “carrot and stick”, rewarding those “who offer constructive criticism” while also being known to impulsively threaten, swear at, and fire his employees. Musk said he expects his employees to work for long hours, sometimes for 80 hours per week.”
But…he may have drug dependency issues. The New Yorker reports “Some of Musk’s associates connected his erratic behavior to efforts to self-medicate…In 2018, the Times reported that members of the Tesla board had grown concerned about Musk’s use of the prescription sleep aid Ambien, which can cause hallucinations. The Wall Street Journal reported earlier this year that he uses ketamine, which has gained popularity both as a depression treatment and as a party drug, and several people familiar with his habits have confirmed this.”
And again But…his kids have stupid names. Ok, this is trivial, but who the hell names their kid Techno Mechanicus? Or X AE A-XII? Or Exa Dark Sideræl (nicknamed Y). Can you imagine poor X filling out a passport application 20 years from now?
Ok, from the trivial to the very important, and I’ve saved this one deliberately for last.
But…his chaotic and arbitrary decision making has put others’ lives at risk. On February 26th2022, two days after the Russian invasion, Ukraine’s Minister of Digital Transformation texted Musk and requested Starlink satellite technology to improve communications. Musk’s response was immediate and positive. He turned on the entire signalling system for coverage of Ukraine, and then arranged for delivery of trucks full of receiving dishes. The Economist reports “By May around 150,000 people were using the system every day…Crucially, Starlink has become the linchpin of what military types call c4isr (command, control, communications, computers, intelligence, surveillance and reconnaissance)… The system also makes drone warfare much easier…Ukrainian military operations are hugely dependent on having access to the internet, so Starlink is a most critical capability.”
Well, all of that sounds good. Where’s the “but” in that situation? The but is that having provided a communications system that was critical to Ukraine’s war efforts, he turned it off in the middle of a battle!
Musk had expressed concerns that his peaceful technology was being used for war. Mind you, In September of 2022, he also advised the Pentagon that Starlink could not continue to provide communications services to Ukraine free of charge. A planned attack on Russian vessels on the Crimean port of Sevastopol was abandoned because Musk refused to provide Starlink support explaining that he was concerned about Russian escalation into a nuclear response. Worse, as the Economist explains, Musk deprived soldiers in the field of communications under battle conditions. One day, Ukrainian forces advancing into contested areas in the south found themselves suddenly unable to communicate. “We were very close to the front line,” Mykola, the signal-corps soldier, told me. “We crossed this border and the Starlink stopped working.” The consequences were immediate. “Communications became dead, units were isolated… It was chaos…People are dying!”
Under pressure from the Pentagon and negative public reactions, Musk restored satellite service, and the Pentagon then worked to enter into a contract with Starlink so that the provision of services was contractually obliged (and paid for). But the incidents highlight a significant issue for NATO allies. Elon Musk has incredible power as a financial juggernaut controlling some of the world’s most influential technologies. To whom is he loyal? Is there any limit on his ability to make his own rules?
The Economist suggests that Musk, while not loyal to Chinese interests, is at least concerned with placating the Chinese. “A facility in Shanghai produces half of all Tesla cars, and Musk depends on the good will of officials in China, which has lent support to Russia in the conflict.”
Although Musk later denied the story, the New Yorker reports that Musk advised the Pentagon that he had spoken with Putin personally and had regular contacts with the Kremlin. Musk has advocated negotiating with Putin to end the war, and appears to have adopted Putin’s version of what a peace settlement would look like. Again according to the Economist, “Musk tweeted a proposal for his own peace plan, which called for new referendums to redraw the borders of Ukraine, and granted Russia control of Crimea, the semi-autonomous peninsula recognized by most nations, including the United States, as Ukrainian territory. In later tweets, Musk portrayed as inevitable an outcome favoring Russia and attached maps highlighting eastern Ukrainian territories, some of which, he argued, “prefer Russia.”
OK, let me try to wrap this up.
Specific to Elon Musk, it seems that his behaviours are growing increasingly chaotic and arbitrary. If I were an investor who had some high-risk investment capital and wanted to grow rich quickly, I might well invest in one or more of his brilliant schemes. On the other hand, if I were running a pension fund for people who couldn’t afford to take a loss, I’d avoid him like the plague.
If I were a senior government official in the United States, I would be seriously concerned that Elon Musk makes decisions that are contrary to State Department and Defence Department policies and I would consider ways to curtail those decisions.
There is good news. Musk was born in South Africa and therefore isn’t eligible to become the US President. He might well out-Trump the Donald if handed a position of political power. The bad news is that for some time he held a Canadian passport, received some of his education at Queens University in Kingston, and married a Canadian girl (since divorced). God forbid he decides to enter politics here!On the bigger scheme of things, I think the Elon Musk story supports what I’ve been saying about billionaires and the dangers of concentrating too much money and power in the hands of autocratic megalomaniacs. Billionaire taxes coupled with laws and regulations that constrain how citizens deal with foreign entities are protective measures we should embrace.
6 responses to “Elon Musk – Locomotive, or Train Wreck?”
Yep! Musk sure sounds like a Certified Grade A Whack-Job. But I don’t see that there’s much that we could or should do about him. If you chose to work for him, be prepared to be cursed out or fired. If you invest with him, be prepared for the wheels to fall off, even if that hasn’t happened with most of his big bets. If you are in the US State Dept, concerned about Ukraine, make sure that you tie Musk down legally so he doesn’t have the option of pulling the plug any day he likes. If you must be on Twitter… well, I’ll let you worry about that! And if you own a Tesla, tell the world how you managed to get the “new car Musk” out of it.
Good morning Terry. Thanks for the comment. By and large I agree with you that there’s little we could or should do about him. I do think, however, that it’s useful and necessary for people at large to realize that they should not trust this man, and we should push back against his mystique in the social media context. I also think that Musk highlights the tension between government by corporation and government by legitimate national governments.
I confess I ignore most news these days, too much bad news. I therefore find this post informative and mostly interesting.
My knowledge of musk was pretty much limited to Tesla & Starlink, I’ve never owned as Tesla but have been a Starlink customer since 2021, it’s been a godsend here where we are at the mercy of Bell Aliant atrocious internet service.
Now you have me worried he might turn my Starlink off!
Good morning Kevin. Thanks for the comment. There was an Economist article on the use of starlink in Ukraine, and it explained the superior performance of Starlink. It said that most satellites are parked at about 36,000 km up. However…”The orbits used by Starlink’s much smaller satellites are far lower: around 550km. This means that the time between a given satellite rising above the horizon and setting again is just minutes. To make sure coverage is continuous thus requires a great many satellites, which is a hassle. But because each satellite is serving only a small area the bandwidth per user can be high. And the system’s latency—the time taken for signals to get up to a satellite and back down to Earth—is much lower than for high-flying satellites. High latencies can prevent software from working as it should, says Ian Muirhead, a space researcher at the University of Manchester.”
In the Gilded Age of the late 19th century, America was absolutely besotted with its lords of business and turned them into celebrities. We’ve done the same thing in the tech age, from Bill Gates on down. Musk is just the most egregious example of the tendency to glorify business success in the post-1970s world. The arc of his career also suggests a parallel to many other maverick success stories (Napoleon and Citizen Kane come to mind), boldness and brilliance spiralling into ego-monsters, hubris, and increasingly erratic decision-making. Musk may not be an archetype, but he is certainly a type.
Good morning Ed. Thanks for the comment. I often write these things just to try and articulate for myself just how I feel or think about something. I find it hard with this guy. I really want to admire him, but I find him hard to like and impossible to trust. I truly think he’s dangerous.