Speaker 1: Elon, thanks so much for being here today. As you know,
Speaker 1: and many people in the audience know, we're reprising a
Speaker 1: fireless fireside chat that we did at Air Force Space
Speaker 1: Pitch Day back in November. I ran into General Goldfeend,
Speaker 1: the Chief of Staff of the United States Air Force,
Speaker 1: this morning, and maybe I was being a little bit
Speaker 1: too confident, but I said, hey, I think that we
Speaker 1: did such a good job together at Space Pitch Day
Speaker 1: that Elon and I got invited back for a much
Speaker 1: bigger audience, higher stakes and everything like that. And General
Speaker 1: Goldfeind looked at me and went, no, JT. You guys
Speaker 1: are going to do it until you get it right.
Speaker 1: So we're going to talk a little bit today about innovation.
Speaker 1: For those of you in the audience that nothing that
Speaker 1: was introduced about Elon made it to the prefrontal cortex,
Speaker 1: and you're like, I still don't know who this guy is.
Speaker 1: You may remember him from a movie role in Iron
Speaker 1: Man two or the TV show The Big Bang Theory.
Speaker 2: You may remember him if you're.
Speaker 1: Old like me, when you used to have to do
Speaker 1: dial in modems, you may remember how PayPal actually worked
Speaker 1: over a dial in modem. And if just In case
Speaker 1: you've had your head in the sand for the last decade,
Speaker 1: you absolutely have.
Speaker 3: To know him.
Speaker 1: For Space Exploration Technologies SpaceX, a tremendous partner of the
Speaker 1: United States Air Force in the space business.
Speaker 2: And for Tesla.
Speaker 1: So for just for grins, this fastest growing auto company
Speaker 1: on the planet, most amazing capability. And when Elon pulled up,
Speaker 1: he pulled up, he and his entourage in three different
Speaker 1: Tesla's this morning.
Speaker 2: How many Tesla owners do we have in the audience?
Speaker 1: Stand up? Stand up if you're a Tesl owner? All right,
Speaker 1: very nice. So Elon, you and I have talked about
Speaker 1: whether the Air Force is the most innovative service the
Speaker 1: Department of the Air Force now and the last time
Speaker 1: we interviewed it was.
Speaker 2: It was just the Air Force.
Speaker 1: Now we're the Air Force and the Space Force as
Speaker 1: part of the Department of the Air Force. Most of
Speaker 1: those people who stood up were in the front row.
Speaker 1: We have a lot of first adopters here in the
Speaker 1: front of the audience apparently, or maybe those.
Speaker 2: Are the folks that just make the most money. Who knows.
Speaker 1: Okay, So again, today's today's discussion is about innovation and
Speaker 1: how we can make the Department of the Air Force,
Speaker 1: the most innovative department within the Department of Defense and
Speaker 1: perhaps across the United States government.
Speaker 2: So elon question number one.
Speaker 1: When you put a weapon system or a product into
Speaker 1: production and you start delivering it to your customers, very
Speaker 1: very frequently, there is a pushback within the production organization
Speaker 1: that you know, we don't want to change that product
Speaker 1: too much.
Speaker 2: It's successful.
Speaker 1: We have a lot of legacy systems that we're responsible
Speaker 1: for in the Department of the Air Force. There is
Speaker 1: a lot of reticence at times to incrementally improve or
Speaker 1: add new capabilities to those systems. From the context of
Speaker 1: Tesla and SpaceX, how do you motivate your workforce, how
Speaker 1: do you work with your customers, how do you work
Speaker 1: with technologists in your ecosystems, your various ecosystems to try
Speaker 1: and make sure that products don't become stagnant and they
Speaker 1: continue to incrementally improve over time.
Speaker 3: Sure, well, first of all, thanks for having me here.
Speaker 4: It's an honor to be here with you and with
Speaker 4: with everyone else from the Space Slash Air Force, and
Speaker 4: obviously had long relationship with the Air Force and very
Speaker 4: much appreciate the support of the years. So I just
Speaker 4: want to make sure to say that and look forward
Speaker 4: to doing a lot of interesting things in the future.
Speaker 4: I think it's actually it's cool that that there is
Speaker 4: that the creation of the space forces is happening. I
Speaker 4: think there's you know, it makes sense that there's a
Speaker 4: major branch for every domain, you know, with that and
Speaker 4: and so the domain of space the domain of error
Speaker 4: are both important. But I think space space is is
Speaker 4: certainly a medium of its own, and I think there's
Speaker 4: some very exciting things that are possible. If I may
Speaker 4: just say it, like what, you know, what the public wants?
Speaker 4: I think, and direction pretty confident that the public doesn't want.
Speaker 3: This is a starfleet academy, you know, like.
Speaker 4: Yeah, like how do we make start, how do we
Speaker 4: make star Trek real? You know, that'd be pretty amazing.
Speaker 4: I would love that, you know, And so I think, like,
Speaker 4: the fastest we can make sort of star fleet reel,
Speaker 4: then let's try to do that.
Speaker 3: Well.
Speaker 2: So elon speaking speaking.
Speaker 1: For the United States Space Force, there already is a
Speaker 1: starfleet academy. It's the United States Air Force Academy in
Speaker 1: Colorado Springs, Colorado.
Speaker 3: Yep.
Speaker 4: But I've been there, I've given a talk, and you know,
Speaker 4: the first launch of Falcon one, we had a Falcon
Speaker 4: SAT from the Air Force Academy.
Speaker 3: That rocket blew up.
Speaker 4: But but but but then the funny thing is that
Speaker 4: it blew up like he's this truth of strange than fiction.
Speaker 3: The the satellite.
Speaker 4: Was shot through the firing, walked through the air a
Speaker 4: couple hundred meters, and then plunged through the roof of
Speaker 4: a tool shed, uh and then landed on the floor
Speaker 4: and was actually in reasonably good shape, I mean for
Speaker 4: crashing through the ceiling. But you know, you're like recognizable,
Speaker 4: you know, And and we gave we get to give
Speaker 4: it back and so we've not lost one of your satellites.
Speaker 1: So so from a SpaceX perspective, a partial mission success.
Speaker 3: It's like, well it's it's not lost. I'm just saying.
Speaker 4: It's a little the worse for there's a little bit
Speaker 4: worse for were of it, you know, but material. But
Speaker 4: then we subsequently launched future Falcons that's the actual orbit
Speaker 4: that was great. So so so I think I think
Speaker 4: there's I think we can go a long way towards
Speaker 4: making star Fleet reel and making.
Speaker 3: These uh sort of.
Speaker 4: Utopian or semi semi utopian future is real, but it
Speaker 4: will definitely require radical innovation. One can't get there by
Speaker 4: incrementally innovating expendable boosters. There's just no way. So the
Speaker 4: I think we need to push for radical breakthroughs. And
Speaker 4: if you don't push for radical breakthroughs, you're not going
Speaker 4: to get radical outcomes. And that that does mean taking risks,
Speaker 4: and common sense that the if you take a big
Speaker 4: risk in order to have a bigger reward, there must
Speaker 4: be a big risk. It's most of the time you
Speaker 4: cannot find bigger reward for small risk. That's those are rare,
Speaker 4: so you're going to have some proportionality of the risk
Speaker 4: and reward. But if if the goal is important enough,
Speaker 4: and I think increasingly the goal is important for for
Speaker 4: many reasons, the goal of having the best technology in space,
Speaker 4: that that is I think going to become increasingly important,
Speaker 4: and it'll be increasingly increasingly important for the United States
Speaker 4: to use what I think is its greatest attribute, which
Speaker 4: is invention and innovation two to create space technology that
Speaker 4: is the best in the world. And in fact, I
Speaker 4: think if the United States does not use breakthrough innovation,
Speaker 4: it will fulbind. Yeah, so I think this is that
Speaker 4: this is not something that was a risk in times past,
Speaker 4: but I think is a risk now.
Speaker 3: Okay, so.
Speaker 1: Yeah, do you characterize that risk in terms of pure
Speaker 1: adversary competition around the planet?
Speaker 2: Are you are you?
Speaker 1: Are you suggesting that it's our adversaries that require us
Speaker 1: to be that those radical innovators or is it just
Speaker 1: we can't become complacent and stay.
Speaker 2: Incrementally improving our systems.
Speaker 1: We must take those giant leaps forward as a nation
Speaker 1: regardless of the competition.
Speaker 4: I think there's there's little I have zero doubt that
Speaker 4: if the United States does not take does not seek
Speaker 4: great innovations in space, it will be second in space
Speaker 4: with as sure as nightfall is day. So it is
Speaker 4: a big deal. But this, this, this is a I
Speaker 4: mean a very innovative that you know, there's no country
Speaker 4: more innovative an eventive than the United States.
Speaker 3: So it's just important to use that attributes. That's that's
Speaker 3: the ace card. Okay.
Speaker 1: Yeah, And since so since it seems like we're going
Speaker 1: down the geopolitical path here on the on the questions,
Speaker 1: how does the United States as a nation maintain that
Speaker 1: innovative edge, that that ability to invest in things and
Speaker 1: take those risks. What kind of of governmental policies or
Speaker 1: process as do we have to encourage the right kinds
Speaker 1: of behavior In your view.
Speaker 4: Well, I think having outcome based procurement is actually very important.
Speaker 4: So you say, like, this is the outcome that is sought,
Speaker 4: and whoever can achieve this outcome or achieve this outcome
Speaker 4: to a greater degree that that company will that that's
Speaker 4: who the Air Force will do business with and will
Speaker 4: procure the thing that is that is radically innovative as
Speaker 4: measured by what is important for leadership in space. So
Speaker 4: I mean, I do think it's it's absolutely fundamental to
Speaker 4: achieve full reusability in access to space.
Speaker 3: This is this is the holy grail of space.
Speaker 4: At the point of which you have full reusability for
Speaker 4: orbital rockets, then you have a profound advantage over anyone
Speaker 4: else's profound. It would be like if in the Air Force,
Speaker 4: if if you if you had planes that could be
Speaker 4: used once and or if you if you had if
Speaker 4: you had multi use planes that can be flown over
Speaker 4: and over again like normal, and all your adversaries had
Speaker 4: single use planes, that would be no contest. It's the
Speaker 4: same thing as space. Okay, Yeah, this is extremely fundamental.
Speaker 4: So the the cost of a propellant is typically on
Speaker 4: the order of one of the cost of the of
Speaker 4: the vehicle or less. So if you have a vehicle
Speaker 4: that is say locks kerosene like Falcon I or something
Speaker 4: like that, it's the oxygen and the fuel are yeah,
Speaker 4: maybe half million dollars or something like that. But then
Speaker 4: depending upon the mission, the mission price can be anywhere
Speaker 4: from like sixty to one hundred million dollars. So no,
Speaker 4: Falcon nine is a partially reusable vehicle, but not fully.
Speaker 4: The vehicle we're working on right now, quite difficult, is
Speaker 4: a starship, and yeah, that has the potential for full reusability,
Speaker 4: but I think it would be great to have other
Speaker 4: companies as well that are doing full reusability. I think
Speaker 4: competition is a good thing. It may seem at times that,
Speaker 4: you know, shouldn't we focus all our efforts on one
Speaker 4: system and brought.
Speaker 3: Rather than divide them and have two.
Speaker 4: Competing systems, like, you know, not to cause controversy, but
Speaker 4: like in my opinion, like Joint Strike Fighter, should this
Speaker 4: should be a competitor to JS that that's uh as
Speaker 4: a controversial subject, but you know, I think it's it's
Speaker 4: not it's not good to have one one provider. It's
Speaker 4: good to have competition where that competition is meaningful and
Speaker 4: somebody can actually lose.
Speaker 3: That's like you know, so then then.
Speaker 1: So yeah, okay, yeah, So in radical innovation, obviously the
Speaker 1: workforce is a really key component of that. I mean,
Speaker 1: as I mean during your PayPal days, you were actually
Speaker 1: doing coding, right, But in SpaceX and Tesla they are
Speaker 1: so large that Elon can't do everything. What sort of
Speaker 1: things do you think about in terms of motivating a
Speaker 1: workforce like we have in the Department of the Air Force,
Speaker 1: that will help them become more radically innovative. What sort
Speaker 1: of things do you look for in people or in
Speaker 1: processes that make the workforce better?
Speaker 3: Sure?
Speaker 4: Well, I think the massive thing that can be done
Speaker 4: is to make sure your incentive structure is such that
Speaker 4: innovation is rewarded and lack of innovation is punished. They've
Speaker 4: got to be a characteristic So if somebody is innovating
Speaker 4: and making good progress, then they should be promoted sooner.
Speaker 4: And if somebody is completely failing to innovate. Not every
Speaker 4: role requires innovation, but if they're in a role where
Speaker 4: innovation is should be happening, and it's not happening, then
Speaker 4: they should either not be promoted or exited. And let
Speaker 4: me tell you, you'll get promote, you'll get you, you'll
Speaker 4: get innovation real fast.
Speaker 3: Okay, let's stick. Yeah, it's like how much do you want?
Speaker 2: H So?
Speaker 1: Does that does that carrot and stick approach help? Do
Speaker 1: you think people be more risk averse or less risk averse?
Speaker 3: Well?
Speaker 4: Poor when you when when trying different things, you've got
Speaker 4: to have some acceptance of failure. As you're alluding to earlier,
Speaker 4: failure must be an option. If failure is not an option,
Speaker 4: it's going to result in extremely conservative choices and you
Speaker 4: may not may get something even worse than lack of innovation.
Speaker 3: Things may go backwards. So, if what you really want is.
Speaker 4: A risk risk, you wann't reward and punishment to be
Speaker 4: proportionate to the actions that you seek. So if if
Speaker 4: what you're seeking is innovation, then should reward success and
Speaker 4: innovation and only there should be minor consequences for lack
Speaker 4: of minor consequences for for.
Speaker 3: Trying and failing. Should that there should be minor.
Speaker 4: Significant rewards for trying and succeeding, minor consequences for trying
Speaker 4: and not succeeding, and big and and major negative consequences
Speaker 4: for not trying.
Speaker 3: Okay, So.
Speaker 4: If you have that incentive structure, you will get innovation
Speaker 4: like you can't believe.
Speaker 1: Okay, So you've you've talked at Tesla's shareholder meetings and
Speaker 1: in various interviews that you consider the machine that builds
Speaker 1: the machine to be just as important, if not more important,
Speaker 1: than the machine itself.
Speaker 3: Yeah.
Speaker 1: So we talked about the workforce aspects. Are there processes
Speaker 1: that you use within your company that are parts of
Speaker 1: that machine that you think are particularly valuable for innovative
Speaker 1: radical change?
Speaker 4: Well, what I mean by the machine that builds the
Speaker 4: machine is that the production Designing the production system of
Speaker 4: a new product is I think at least an order
Speaker 4: of magnitude or too ards magnitude hotter than designing the
Speaker 4: initial prototype.
Speaker 2: Yeah.
Speaker 4: I think like in America, there's been less, less of
Speaker 4: a less importance in modern times placed on manufacturing, and
Speaker 4: I think this is a mistake, Like at this point,
Speaker 4: really classify And in fact I sent an email to
Speaker 4: the to SpaceX just saying this, like, at this point,
Speaker 4: I think designing a rocket is trivial, just trivial, there's
Speaker 4: like tons of books that will you read them? You know,
Speaker 4: you can understand equations. You can design a rocket. It's
Speaker 4: really really easy. Yeah, if you say like two stage
Speaker 4: two and two percent of your lift off master orbit
Speaker 4: from it just to design something like that piece case. Uh,
Speaker 4: Now I say you want to go into production with that,
Speaker 4: or if you want you want to actually make Let's say,
Speaker 4: the next step is you want to make even one
Speaker 4: of those things. Okay, Now, making even one of those
Speaker 4: things and getting it to orbit is hard, but the
Speaker 4: designing of it is not hard. The making of it
Speaker 4: is even one is hard. The making of a production
Speaker 4: line that builds and launches many is a extremely hard.
Speaker 4: And then the next level beyond that would be, uh,
Speaker 4: are creating a fully reusable system and having that be
Speaker 4: in volume production and volume launch. That's the that's super
Speaker 4: super hard.
Speaker 3: So that's so yeah.
Speaker 4: But but by building the machine and bolt machine, I mean,
Speaker 4: I mean creating the production system, and I keep emphasizing
Speaker 4: to SpaceX, the hard part is making it and making
Speaker 4: lots of them and launching frequently, because reuse must not
Speaker 4: just be it can't be reused like the shuttle. It's
Speaker 4: got to be rapid and complete reuse. So the shuttle
Speaker 4: was a case where the reuse was very slow and
Speaker 4: it was not complete. The main tag was lost every time,
Speaker 4: and ref the shuttle between flights was extremely expensive. It's
Speaker 4: not even clear whether it was worth recovering the booster
Speaker 4: shells from the ocean. So so just like an aircraft,
Speaker 4: the rocket must be rapidly and completely reasonable, and then
Speaker 4: you need lots of them. And then I've been sort
Speaker 4: of just doing back, kind of back of the envelope
Speaker 4: of what's needed to establish a self sustaining city on Mars.
Speaker 3: And these are like big numbers, but like you.
Speaker 4: Need on the order of a million tons to the
Speaker 4: surface of Mars useful payload something like that, because we
Speaker 4: sit on the top of a massive base of infrastructure,
Speaker 4: or you know, the economy is you think of all
Speaker 4: the things that are mined and then refined and then
Speaker 4: and then the many steps in the refinement, and in
Speaker 4: order to produce like your phone or your host or
Speaker 4: even there's there's a vast base of industry that was
Speaker 4: required to produce even a simple household item. It's very difficult.
Speaker 4: So so you've got to recreate that on Mars, some
Speaker 4: million tons on Mars means we're just talking to orders
Speaker 4: of magnitude here, and hopefully it's not ten million tons,
Speaker 4: and hopefully maybe it's less than a million tons, but
Speaker 4: probably not one hundred thousand tons. So that that means
Speaker 4: you need to get about about five million tons to
Speaker 4: Earth orbit of useful failureed. So you're talking in like
Speaker 4: the like. So essentially, unless you have a launch system
Speaker 4: that is somewhere in the mega ton per year range
Speaker 4: to orbit, it's not it's not relevant.
Speaker 3: Okay. Yeah, So.
Speaker 1: Starlink, as you're scaling to build more and more Starlink
Speaker 1: satellites to go on more and more reusable rockets, what
Speaker 1: are some of the challenges you've had to overcome in
Speaker 1: Starlink production so that you can perfect that machine, machine
Speaker 1: that builds the machine.
Speaker 4: Yeah, stalling production is going well. Actually, the that's the
Speaker 4: that was a hard that's a hard thing to get right.
Speaker 4: We made many we had many iterations on the stalling prototypes,
Speaker 4: and then, as I said, the building the stalling production
Speaker 4: line was I don't know thousand percent harder than designing
Speaker 4: the satellite to begin with.
Speaker 3: But but it is important to have like a.
Speaker 4: To design full manufacturing and have a tight feedback loop
Speaker 4: between the design of the object and may acturing system,
Speaker 4: so as when people when when you design the object
Speaker 4: at first, you you don't realize all the parts that
Speaker 4: are really difficult to manufacture. Uh, And so having the
Speaker 4: manufacturing system and the design bring those up at the
Speaker 4: same time, so that you're actually in the beginning making
Speaker 4: a thing that you know is wrong, but you're actually
Speaker 4: figuring out what's hard to manufacture.
Speaker 3: That's the real problem.
Speaker 4: So we brought up the Starlink production line before we
Speaker 4: actually had the design finalized, which which is actually the
Speaker 4: right thing to do. And then we discover, oh, there's
Speaker 4: all there's all these things that in the design that
Speaker 4: are very difficult to make, and so therefore we must
Speaker 4: change the design, and the satellite ended up having the
Speaker 4: same capability, but just was very easy to make and launch,
Speaker 4: So say, very easy.
Speaker 3: It's sort of.
Speaker 4: Hard, but but but but it's being done, and we're
Speaker 4: the satellites are being produced at a rate now faster
Speaker 4: than we can order them. So and and the cost
Speaker 4: of the satellite has dropped below the cost of transporting
Speaker 4: it to orbit, even when taking the Falcon nine in
Speaker 4: the most reused configuration, which is to get the booster
Speaker 4: back and you get the fairings back. The cost of
Speaker 4: the of transporting the satellite to orbit exceeds the cost
Speaker 4: of the satellite. So the satellite is in a good,
Speaker 4: good situation, and the cost that satellite will keep coming
Speaker 4: down as we ramp up rates and make design improvements.
Speaker 4: But so we really need Starship to carry Starlink in
Speaker 4: order to get the total delivered cost to orbit to
Speaker 4: be much better than it is today.
Speaker 3: Still pretty good.
Speaker 1: When you when you so in terms of deciding what
Speaker 1: to build, you can take feedback from customers and let
Speaker 1: customers pull to you what they want, or you can
Speaker 1: be radically innovative within your company, or you know a
Speaker 1: small set of individuals and develop something and push it
Speaker 1: into the industrial base. So customer poll would be Tesla
Speaker 1: Tesla owners wanting new features on the existing fleet. Push
Speaker 1: would be you know, a company push would be something
Speaker 1: like when Apple pushed the iPad to everybody and nobody
Speaker 1: knew what an iPad was until they touched it and
Speaker 1: went wow, and everybody wants an iPad. Now, what do
Speaker 1: you all think about in terms of that balance between
Speaker 1: customer poll and company push.
Speaker 3: Well, in the beginning nobody wanted a Tesla.
Speaker 4: Let can tell you that that made the original sort
Speaker 4: of roasters car.
Speaker 3: Uh.
Speaker 4: People were like, why would I want an electric car?
Speaker 4: That's my casting car works fine, Like, no electric car
Speaker 4: is better?
Speaker 3: I should try it.
Speaker 4: And it was hard, you know, hard to get people
Speaker 4: to do a test drive first. Nobody knew who we were.
Speaker 4: Heard of this company and like, yeah, we're named after
Speaker 4: Nicola Tesla, the you know that guy. Nope, So for
Speaker 4: sure we were doing push in the beginning because people
Speaker 4: said there was no one telling us that they wanted
Speaker 4: an electric car, so it was not it was not
Speaker 4: out of like you know, it's like lots of people
Speaker 4: coming after me saying, hey, I really want an electric car.
Speaker 3: I heard that zero times.
Speaker 4: So people like it's like, man, we're going to make
Speaker 4: an electric car and shure that these things can be
Speaker 4: good and then people want them.
Speaker 3: You know.
Speaker 4: It's like because like Henry Ford said that, like the
Speaker 4: you know, we're talking about the Model T. It's like,
Speaker 4: if you ask the public what they wanted, that's say
Speaker 4: a faster horse. So if you did like a big
Speaker 4: survey and say what, hey, public before automobiles, what would
Speaker 4: you like, It's like, well, I'd like my horse to
Speaker 4: go three miles an hour faster and eat less food
Speaker 4: and uh, you know, be stronger and live longer and
Speaker 4: that kind of thing. There'll be a basically a bunch
Speaker 4: of incremental improvements on horse. Because you want to say, like,
Speaker 4: what about an automobile like cart drives yourself, Like, what
Speaker 4: are you talking about? That's that's not that's not crazy.
Speaker 4: But when you actually make an automobile and give it
Speaker 4: to people and say, okay, now this is a horse
Speaker 4: where you can keep it in the bond and if
Speaker 4: you leave for a month it's still alive. Yeah, to
Speaker 4: carry more more weight than a horse and go further
Speaker 4: and that kind of thing. So anyway, the it's like
Speaker 4: when when it's a radically a new product, people don't
Speaker 4: know that they wanted because it's just not in their
Speaker 4: in their scope. I think when they first started making TVs,
Speaker 4: they did a nationwide survey. I think this might have
Speaker 4: been like forty six or forty eight. It was like
Speaker 4: famous nationwide survey will you ever buy a TV? I
Speaker 4: was like ninety six percent of respondent said no, hmm,
Speaker 4: some crazy number. Like basically everyone's like would you buy
Speaker 4: a TV? And maybe they put a price in there
Speaker 4: or something. I don't know, but it was famously almost
Speaker 4: everyone said they would not buy a TV, but they
Speaker 4: didn't know what they're talking about.
Speaker 1: So the big game changing stuff at the beginning is
Speaker 1: a company push kind of a thing most of the time,
Speaker 1: but then changes to the product over time can be
Speaker 1: a lot more customer pull kind of a focus.
Speaker 3: Yeah, changes to the product of a time can be
Speaker 3: incremental changes.
Speaker 4: Then the customers can certainly tell you it's good to
Speaker 4: becustom feedback to say how can we improve the product,
Speaker 4: And once they're using it, they can say, Okay, I
Speaker 4: like this thing about it, I don't like this other thing,
Speaker 4: and then we can improve the product of a time.
Speaker 4: Customer feedback after they have the fundamental thing is great.
Speaker 2: Okay, Okay.
Speaker 1: So in the audience here, we have a lot of
Speaker 1: air and space warfighters, We have so people who use systems,
Speaker 1: We have a lot of developmental teams on both the
Speaker 1: government and the industry side, and we have the air
Speaker 1: and space leadership of the nation. So I got a
Speaker 1: little lightning round here for you to try and influence
Speaker 1: maybe some of those younger folks in the back who
Speaker 1: are looking for the next big thing. So, in terms
Speaker 1: of different kinds of technology, whether it's artificial intelligence or
Speaker 1: medical or batteries or whatever, in the next five years,
Speaker 1: what technology do you think will see the most advancement.
Speaker 4: Well, it's difficult to assess most in those context because
Speaker 4: they're very different. But I think the part of the
Speaker 4: most transformative, most fundamentally transformative, will be AI AI Okay.
Speaker 1: And if you were recommending to some of the young
Speaker 1: officers and enlisted troops in the room, what sort of
Speaker 1: degrees to pursue at college or what sort of education
Speaker 1: that they should prioritize for themselves in the modern era,
Speaker 1: what would you recommend?
Speaker 3: Computer science and physics?
Speaker 1: Computer science and physics okay? How many computer science people
Speaker 1: do we have out there? How many physics people?
Speaker 3: Okay?
Speaker 2: We need more apparently, Okay.
Speaker 3: It's essentially information theory and physical theory.
Speaker 4: If you want to understand the nature of the universe
Speaker 4: and have these have a very good predictive power.
Speaker 3: Physics and pure science okay, yeah, okay.
Speaker 1: As a nation that is interested in radical innovation to
Speaker 1: maintain its competitive edge, what are the things that the
Speaker 1: Department of the Air Force should be investing more in
Speaker 1: other than reusable rockets from your perspective.
Speaker 4: Again, I can't emphasize enough how important reasonable rockets are. Yeah,
Speaker 4: I love it.
Speaker 3: It's great.
Speaker 4: So and I think that you could actually do point
Speaker 4: to point on Earth with you know, to go a
Speaker 4: long distances and be much better than aircraft because I
Speaker 4: mean basically just think of like ICBM minus the nuke Adalande,
Speaker 4: you know, so it's just sort of in the option package,
Speaker 4: just you know, unchecked nuke and then add landing system
Speaker 4: check and and that's definitely gonna get you where you
Speaker 4: want to go the fastest, because that's why they made ICBMs.
Speaker 4: They get there the fastest. So you know, I think
Speaker 4: that that's that's gonna be pretty exciting. Yeah, I think, uh.
Speaker 3: Yeah.
Speaker 4: I mean once you have dramatically lower cost access to space,
Speaker 4: then then many things are enabled. You can think of
Speaker 4: like once you got the Union Pacific Railroad, then you know,
Speaker 4: getting to the West coast was.
Speaker 3: Much faster and much less dangerous.
Speaker 4: You're not likely to sort of end up eating your
Speaker 4: compatriots in a snowy situation, you know, so.
Speaker 3: You can just take the train.
Speaker 4: So so you know, at the beginning, they thought, why
Speaker 4: are the heck they're building out stupid.
Speaker 3: Railway and there's nobody.
Speaker 4: There's nobody there, and they're like, but once you build
Speaker 4: the railway, they're like, Okay, now it's easy to get
Speaker 4: to the West Coast. And now a huge portion of
Speaker 4: the US population is on the West Coast. And actually
Speaker 4: California is the most popular state in the nation, but
Speaker 4: it used to be well least populist.
Speaker 3: I suppose we're pretty low.
Speaker 4: So many things are possible once you once the transport
Speaker 4: uh problem is solved. So that that's why I think
Speaker 4: it's a fundamental you can't but if you can't get
Speaker 4: there or getting there is takes a long time and
Speaker 4: you can't risk and every mission has got to work,
Speaker 4: then it's very hard to innovate. It's got to be
Speaker 4: that Okay, some missions would work, and the cost of
Speaker 4: running the experiment is low. That's why I'm harping so
Speaker 4: much on the cost of transport, so.
Speaker 3: You know, once you're there.
Speaker 4: I think, like say establishing a base on the moon
Speaker 4: or based on Mars, there's just a tremendous amount of
Speaker 4: work work that's needed to create a self sustaining base
Speaker 4: on the moon of Mars, and it opens up a
Speaker 4: tremendous amount of opportunity, just as the Union Pacific Railroad
Speaker 4: did by making access to the West Coast not much easier.
Speaker 3: Yeah, I mean outside of the.
Speaker 4: Space space realm, I think there's there's still a lot
Speaker 4: of opportunity in tunnels. I keep I've been saying that
Speaker 4: for a long time, and tunnels are great.
Speaker 3: They're really great.
Speaker 4: And Boring Company is about to finish its first tunnel
Speaker 4: in Vegas. I encourage I encourage people to copy, Please
Speaker 4: copy the Boring Company or do better.
Speaker 3: That'd be great.
Speaker 1: There's so in terms of domains. You have subterranean obviously Tesla.
Speaker 1: Tesla covers the ground domain as capabilities. You've got the
Speaker 1: space domain covered with SpaceX and starlink capabilities. I think
Speaker 1: this is this is the air warfare symposium. Folks might
Speaker 1: not in the audience might be interested in if you
Speaker 1: have any ideas for the air domain specifically.
Speaker 4: Well, for the air domain, I think things things are
Speaker 4: very definitely going to go into kind of autonomous locally
Speaker 4: autonomous drone warfare. This is where it's at, where the
Speaker 4: future will be. I'm just saying it's not I want
Speaker 4: the future to be this. It's just this is what
Speaker 4: the future will be is autonomous drone warfare and at
Speaker 4: at a local, local level. The you know, I can't
Speaker 4: believe I'm saying this because this is this is dangerous,
Speaker 4: but simply what will occur is sort of a drones
Speaker 4: locally being autonomous. And but I think we still want
Speaker 4: to retain sort of the you know, authority to damage
Speaker 4: or destroy a you know, anything that that isn't an
Speaker 4: autonomous drone. Keep that authority back here with a person
Speaker 4: in the loop. Okay, but it's it's the fighter jet
Speaker 4: era has passed. That is It's just yeah, fighter jet
Speaker 4: era has passed. Okay, so it's strong.
Speaker 1: Let's go back to failure for a minute. And and
Speaker 1: and the mindset that that you have, you and your
Speaker 1: leadership team at Tesla and SpaceX have on failure. I
Speaker 1: mean the SpaceX blooper reel that you guys did and
Speaker 1: I think it was twenty seventeen timeframe was definitely Hey,
Speaker 1: we embraced this learning that occurs more recently with the
Speaker 1: Tesla truck and the and the ball through the window.
Speaker 2: Also, uh, that mind.
Speaker 5: Thret that that that mindset that embraces failure, how do
Speaker 5: you personally, I mean that those kinds of failures would
Speaker 5: drive a lot of us in this room nuts, but
Speaker 5: doesn't seem to drive you nuts.
Speaker 2: Seems like you're very comfortable with it.
Speaker 1: Can you talk about the mindset that requires for you
Speaker 1: to be that accepting of that kind of failure?
Speaker 3: Should should we roll the video? No?
Speaker 2: No, we should not roll the video?
Speaker 3: Not yet? Okay, okay, okay.
Speaker 4: Well I think of these things is just there's a
Speaker 4: certain amount of time, and within that time, you want the.
Speaker 3: Best net outcome. So for.
Speaker 4: You know, all the set of actions that you can do,
Speaker 4: there's going to be some which will fail, some which
Speaker 4: will succeed, and you want the net useful output of
Speaker 4: your set of actions to be the highest. So I
Speaker 4: have to, like you use like a baseball analogy, Like
Speaker 4: you know, baseball do unless you just sit there and
Speaker 4: wait for the perfect pitch until you get a real
Speaker 4: easy one that you can't give you three shots and
Speaker 4: the third one they say okay, they get off, they
Speaker 4: go back to the put somebody else with there.
Speaker 3: So your three strikes on on the baseball.
Speaker 4: You know, not on bat anymore. So so you're what
Speaker 4: you're really looking for is like what's the batting average?
Speaker 3: You know how you're doing.
Speaker 4: On on score and and just there's gonna be some
Speaker 4: amount of failure, but you want your net output net
Speaker 4: useful output to maximized. Failure is essentially irrelevant unless it
Speaker 4: is catastrophic.
Speaker 3: Okay, okay.
Speaker 1: Intellectual property, obviously, Tesla, SpaceX Solar City have amazing capabilities
Speaker 1: that they're bringing to the to the public and to
Speaker 1: the government every day. How do you protect your intellectual
Speaker 1: property in a world where it seems like the cloud
Speaker 1: and servers and things are constantly under attack from people
Speaker 1: wishing to free you of your intellectual property.
Speaker 3: Yeah.
Speaker 4: Well, actually at Tesla, we just open source style patents
Speaker 4: some years ago, so anyone can use our patents. So
Speaker 4: we really have not been tried to protect intellectual property
Speaker 4: in that sense. We've we've tried to actually smooth the
Speaker 4: path because the the overacching goal of Tesla is to
Speaker 4: accelerate the advent of sustainable energy. And so if we
Speaker 4: created a pattern portfolio that discouraged other companies from making
Speaker 4: electric cars, they will be inconsistent without mission. So we
Speaker 4: open source all the patterns in order to help the other.
Speaker 4: Anyone else wants to make an electric car, so I
Speaker 4: guess that's the opposite of protecting the I P.
Speaker 3: Now, the real way I thank you.
Speaker 4: You actually achieve intellectual property protection is by innovating fast enough.
Speaker 4: If your rate of innovation is high, then you don't
Speaker 4: need to worry about protecting the IP because other companies
Speaker 4: will be copying something that you did years ago, and
Speaker 4: that's fine, you know, just make sure you're your rate
Speaker 4: of innovation is fast.
Speaker 3: Speed is really speed of innovation? Is what is what matters?
Speaker 4: And I do I do say this to my teams
Speaker 4: like quite a lot that innovation per unit times I
Speaker 4: go innovation per year if you want to say it,
Speaker 4: like is what matters? Not innovation absent time, because if
Speaker 4: you want to fake it one hundred percent improvement in
Speaker 4: something and that took one hundred years or one year,
Speaker 4: that's radically different. So it's like, what is your rate
Speaker 4: of innovation that that matters? And is the rate of
Speaker 4: innovation is that accelerating or decelerating? And a weird thing
Speaker 4: happens when companies get big is that most companies or organizations,
Speaker 4: the bigger they get, they tend to get less innovative,
Speaker 4: not just less innovative on a per person basis, but
Speaker 4: less innovative in the absolute and I think this is
Speaker 4: probably because the incentive structure is not It's not there
Speaker 4: for innovation. It's not enough to use words to encourage innovation.
Speaker 4: The incentive structure must be aligned with that. That's fundamental.
Speaker 1: So taking that from a business level to a national
Speaker 1: level in terms of obviously the United States largest economy
Speaker 1: in the world, China the second largest economy in the
Speaker 1: world currently and gaining fast. What sort of things that
Speaker 1: could you share with the audience here that are your
Speaker 1: thoughts on the competition economic or military between the United
Speaker 1: States and China.
Speaker 3: Sure. Well, I think China is a really interesting country.
Speaker 3: I have to say.
Speaker 4: The things to appreciate about China is just that there's
Speaker 4: a lot of really smart, really hard working people there
Speaker 4: and they're going to do a lot of great things.
Speaker 3: This is sort of, you know, independentive of Chinese going policy.
Speaker 4: They're just going to do a lot of interesting things.
Speaker 4: The thing that will be it will feel pretty strange,
Speaker 4: is that the Chinese economy is going to be probably
Speaker 4: at least twice as big as the US economy, maybe
Speaker 4: three times, but at least twice, So that assumes a
Speaker 4: GDP per capita still less than the US, But since
Speaker 4: they have about four or five times of population, then
Speaker 4: it would only require getting to a per capita of
Speaker 4: half the United States for their economy to twice the
Speaker 4: size of ours. And as I'm sure people in this
Speaker 4: room know, the foundation of war is economics.
Speaker 3: And so if you.
Speaker 4: Have half the resources of the counterparty, then you better
Speaker 4: be real innovative. If you're not innovative, you're going to lose.
Speaker 1: I'm not sure whether that's a cyber attack that's ongoing
Speaker 1: or not here. So, yeah, the clock says I have
Speaker 1: eleven minutes left.
Speaker 3: Is that not true?
Speaker 2: It's got so smooth all right, so smooth jazz elon. Yeah,
Speaker 2: it's coming through the house system. We're working to get
Speaker 2: it shut off.
Speaker 3: Thank you. Yes, well.
Speaker 4: Anyway, so so yeah, with with with respect of China,
Speaker 4: China's economy is going to be two to three times
Speaker 4: this size, the US economy at least double.
Speaker 3: Therefore, in order for the US to.
Speaker 4: Be competitive on military level, the innovation has to overcome
Speaker 4: a gigantic gap in economic output. Okay, So in the
Speaker 4: absence of radical innovation, the US will be militarily second.
Speaker 3: Okay, basic, basic, Now.
Speaker 2: What from the standpoint of radical innovation.
Speaker 1: We already talked about workforce, we talked about processes, we
Speaker 1: talked about protecting intellectual property rights. Let's talk about overall culture,
Speaker 1: that culture that you try and push into your companies
Speaker 1: that makes them successful any of us. And I sat
Speaker 1: right next to one of your SpaceX employees on the
Speaker 1: plane here yesterday, a young engineer. It was motivating for
Speaker 1: me just to talk to her about what she was
Speaker 1: doing every day and how important her job was. And
Speaker 1: I just felt like the only other place I've seen
Speaker 1: that kind of culture is frankly, in the department of
Speaker 1: the Air Force with some of our young folks that
Speaker 1: are sprinkled around the back of the room. How do
Speaker 1: you create that culture at SpaceX and Tesla to make
Speaker 1: employees like that?
Speaker 3: Well, wow, this smooth jazz is just honest with a vengeance.
Speaker 3: I feel like we're in a big elevator.
Speaker 4: So first post, when we interview people, we do ask
Speaker 4: for some evidence of exceptional ability, which in most cases
Speaker 4: includes innovation. This is not said everyone needs to be innovatives,
Speaker 4: but we certainly need those that are doing it's engineering
Speaker 4: to be innovative, and ideally everyone is at least to
Speaker 4: some degree in innovative. So at the interviewpoint, we select
Speaker 4: for people who want to create new technology, and then
Speaker 4: the intentive structure is set up that such that.
Speaker 3: Innovation is rewarded.
Speaker 4: Making mistakes along the way does not come with a
Speaker 4: big penalty. And but but but failure to try to
Speaker 4: innovate at all comes with a big penalty.
Speaker 3: You'll be fired. Okay, yeah, all.
Speaker 2: Right, the carrot and stick, Yes, the stick.
Speaker 4: If you don't even try, or or somebody doesn't even
Speaker 4: try to innovate, or their innovation aspirations are are very
Speaker 4: are not not very good, then yeah, they will no
Speaker 4: longer be at the company.
Speaker 3: Okay, okay, all.
Speaker 1: Right, So we got about five minutes left, and what
Speaker 1: I'd like to do is just turn it over to you, Elon,
Speaker 1: to talk about whatever you'd like to talk about.
Speaker 3: If you have a.
Speaker 1: Message for the audience here, you have, you know, a
Speaker 1: thousand plus air and space professionals and the greatest air
Speaker 1: and space force on the planet. So what do you
Speaker 1: want to tell them?
Speaker 3: I think we got to make Starfleet happen.
Speaker 4: Like so, so we were like, oh, real big space
Speaker 4: shifts that can go far places, and that's probably get
Speaker 4: me to the most trouble of able. I think this
Speaker 4: should be in new uniform that's.
Speaker 3: That.
Speaker 4: That's like, I don't know, cool uniforms, cool spaceships, you know.
Speaker 4: I think that's what when the when the public here's
Speaker 4: space force, that's what they think. It's like, Okay, we're
Speaker 4: gonna have like some sweet space shifts and like pretty
Speaker 4: good uniforms and stuff, and that'll be that's what the
Speaker 4: poblague wants. So yeah, when we went the sci fi futures,
Speaker 4: the the good sci fi futures to be real, and
Speaker 4: ideally to become real while we're still alive, you know,
Speaker 4: and every want to see it happen. And so I
Speaker 4: think we really need to drive the rate of innovation
Speaker 4: to be such that we would see a big, big breakthroughs,
Speaker 4: big improvements in space technology and you know, in the
Speaker 4: years to come. So yeah, it's like just trying to
Speaker 4: make stuffleet happen as soon as humanly possible and definitely.
Speaker 3: Why we're while we're still alive. Yeah, So.
Speaker 4: I'm not sure about wolf drive, but we can other
Speaker 4: stuff I think can be done. Wolf drive in tailportation,
Speaker 4: probably not, but big space ships that can go far places,
Speaker 4: definitely that.
Speaker 3: Can be done.
Speaker 1: Understood all right, Ladies and gentlemen, Elon musk mm hmm