Squawk Pod: Ron Baron’s Multi-Billion dollar bet on Elon Musk - 05/12/26 | Audio Only

本站添加: 2026-05-19

[00:00:00]Bring in show music, please.

[00:00:04]>> Hi, I'm CNBC producer Katie Kramer.

[00:00:07]Today on Squawk Pod, many billion dollar man investor Ron Baron >> to be exact 55 bill898 million >> 55 billion.

[00:00:19]>> His client portfolio is heavily weighted in Elon Muskled companies and the upcoming SpaceX IPO promises to be a big one. This is going to become uh the largest company on the planet. I think that the company over the next 10 or 15 years is going to be worth 10 trillion, 20 trillion, 30 trillion. And I could be very low.

[00:00:42]>> Why he's bullish on Musk today, tomorrow, forever.

[00:00:46]>> You never bet against the guy with superpowers who would never give up.

[00:00:50]That's him.

[00:00:52]>> And the rest of today's news that got us squawking. It's Tuesday, May 12th, 2026.

[00:00:57]Squawk Pod begins right now.

[00:01:02]>> Stand back by in 3 2 1. Q, please.

[00:01:07]>> Good morning everybody. Welcome to Squawkbox right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernin and Andrew Ross Sorcin.

[00:01:17]>> We got some breaking news for you. Uh we maybe I should say this was as expected but eBay's board uh just announcing that it is uh declining effectively to take up Ryan Cohen's bid from GameStop. Uh it is saying the following and it's rejecting that bid saying that eBay's track record of value creating actions and bright standalone projects give it a you know a um a potential in the future.

[00:01:42]I think the bigger issue is they're taking uh some question about the TD uh bank a highly confident letter which we've discussed uh before uh about just how confident uh and how that would work. Uh it goes on and on and on talks about the impact of GameStop's proposal on eBay's long-term growth and profitability. Uh and then of course the big issue which I think was pointed up in the interview that that we had to some degree and then later in some of the other conversations that Ryan Cohen had uh the issue of delusion uh and how effectively they would pay for the transaction. Delusion.

[00:02:18]>> Delusion. Delusion.

[00:02:19]>> I heard I think it's also delusional too. From watching it, it seemed like it was more delusion than delusion. Did it not?

[00:02:26]>> You were you looked sort of >> I don't know.

[00:02:30]>> You know what? In my own way, >> were you puzzled?

[00:02:31]>> In my own way, I felt bad cuz I understood the transaction the whole time and I didn't understand why he didn't just say, "Look, we're really not buying the whole company. This is not a classic acquisition." because they weren't buying the whole company. In fact, at the end of the day, >> oh my god, you said it.

[00:02:49]>> E eBay shareholders >> would continue to own something like 70 or 80% of the company. And all he had to say was that's how you know it's this is not a classic acquisition with a true 20% premium. I mean >> maybe >> basically he wanted them to buy GameStop at a premium and then he wanted to run the whole entity.

[00:03:08]>> Like right, >> but that doesn't sound very good when you say that. And by the way, I'm going to dilute all the shareholders process.

[00:03:13]It's half cash, half stock.

[00:03:18]>> I I I'm I'm hear you. I'm just saying that that math doesn't get you to the to the price that you're offering.

[00:03:29]>> So, >> that's a pretty straightforward question. I don't get it. Like, where's the rest of the money coming from?

[00:03:37]>> Andrew laid it out pretty clearly.

[00:03:39]>> I I don't understand your question.

[00:03:41]We're offering half cash, half stock, and we have the ability to issue stock in order to get the deal done. But the full details of the offer on our are on our website.

[00:03:56]>> But you're on our air. We we thought we'd get >> So, but I don't understand your question.

[00:04:05]>> During our interview, he did, for whatever reason, and I don't you know, I have great empathy for others. He didn't he didn't he didn't say it and um >> it was weird. I I mean I I didn't >> I was hoping he would. At one point I was going to stop him and try to explain it for him. I didn't think it was my >> I was on vacation, but I didn't I didn't agonize over it. But if a if a company worth X is going to buy a company worth 20x and then just keep saying, well, we're just going to issue stock to do it. It's like, yeah, okay, issue a billion shares of stock so that every It's like uh Zimbabwe dollars. You can't. It's so simple and he just was resisting and acting like he didn't understand your questions and it was just uh I don't think anyone was >> Michael Rubin was on last week later. He said he thinks the guy's a very smart guy. Didn't think that went well and you know not to take anything away from him but that was not exactly a confidence inspiring >> interview. You know to his credit in the days the days after he did a couple of interviews where he did he did try to explain it and he talked about rolling that effectively eBay shareholders who have to roll into his deal but >> that's what you needed to say I think a on day one and b question is is it a compelling is it compelling for an eBay shareholder to quote unquote roll in to somebody else's deal like this >> I think people saw those other interviews I saw it on Twitter but >> President Trump says the ceasefire ire deal in Iran is in his words on life support and uh if you were a family going in to check out your loved one that the doctors would tell you that he has a 1% chance of making it. Follow president the president's rejection of Iran's counter proposal uh to a US plan to end the war. CNBC's Dan Murphy joins us now with more from Abu Dhabi. And he's uh been to the Taylor the last couple You're looking good, Dan. get the get the suits and ties going. Uh you're stepping it up. You're stepping it up.

[00:06:03]What what's going on >> or just getting out of the heat uh in the region, you could also say, Joe, but look, in terms of where the conflict is going, obviously the asset markets responding to this latest headline. In President Trump's own words, the Iran ceasefire is on massive life support and that is keeping oil well bid this morning. Axios also reporting that Trump is now actively weighing whether to resume military action against Iran after Tyrron delivered a response to the US proposal on Sunday that the president called a quote piece of garbage. Of course, Iran, according to reports, rejected any dismantling of its nuclear facilities and also demanded sanctions relief before making any nuclear commitments. And it took days for Iran to reply as well, which seemed to disappoint the president. Of course, it took him just minutes to reject it. So, the options now on the table include resuming Project Freedom to push ships through the Strait of Hormuz, restarting the bombing campaign, or even a special forces operation to secure Iran's enriched uranium stockpile, as suggested by Israel's Prime Minister Benjamin Netanyahu in that 60 Minutes interview.

[00:07:09]Trump is hesitant, it would seem, on that last one, though, and it's unlikely the US would undertake any major military operation while the president is visiting China. So, we're watching and waiting to see exactly what happens next, particularly on this stalled diplomatic effort. And then, a big headline out of the Gulf this morning as well, the Wall Street Journal reporting that the UAE has been conducting military strikes on Iran. Now, after weeks of speculation over whether the country was preparing to get involved or maintain what senior officials told me was a defensive stance, the Journal now says Abu Dhabi hit a refinery on Iran's Leavan Island in early April, marking its entry into this conflict. Now, the UAE has not publicly confirmed the strikes, but it also hasn't really jumped on this story to deny it either.

[00:07:58]CNBC has of course contacted the Foreign Ministry for comment. And for context here, remember Iran fired more than 2,800 missiles and drones at the UAE.

[00:08:08]That's more than any other country in this conflict, including Israel. And leaders here have always maintained their right to respond. So whether or not this journal reporting is correct, of course, remains to be seen at this point. We're waiting for an official response from the country. But in any case, this is quite a significant step and certainly symbolizes the reset that we've seen in how the country views its own role and responsibility in this region moving forward. Back over to you.

[00:08:38]>> Yeah, I I'm just wondering what if we can sort of deduce what type of additional military action would make the most sense given the you know the got two blockades basically happening at the same time. But at this point, and it's spelled out in a lot of different op-eds, Iran thinks it can wait out uh President Trump that the pressure on him with oil prices and, you know, talking about suspending the gas tax shows that there is uh some pressure.

[00:09:12]And how long can they wait it out? Well, if they don't care an iota about the populace of Iran, I'm sure they're all doing fine and, you know, dining on fine food and they got plenty of water and, you know, the regime is doing fine. Um, and I I don't know when, you know, I don't know when that the struggles from the the Iranian people take precedence. Maybe it never happens, Dan. Could it be another? And if he's not going to do anything while he's in China, then the waiting goes on and and uh you know, the pressure increases domestically here.

[00:09:50]>> It's a fair point and you know, as the saying goes, the Americans have the watches, but the Iranians have the time.

[00:09:56]And of course, the time pressure is pretty critical for President Trump as well, given the fact that he's coming into the midterms. Obviously, a lot of pressure domestically, politically to wrap this thing up. What can be achieved in China? I think is the biggest question at this point. All eyes are on exactly what comes out of Beijing and whether or not President Trump is able to get China's help to pressure Tyrron to move the needle here. If we don't see some kind of movement or a breakthrough at the end of the week in China, then obviously the odds of some kind of military action would be increased as well. But what that would look like and what would actually be effective, I think, is a key question at this point as well.

[00:10:37]>> Okay.

[00:10:40]As Joe just mentioned, President Trump is looking at suspending the federal gas tax. The president said in the Oval Office that he would reduce the tax shortly after saying in a press interview he wants to pause it for a period of time. President Trump can't declare a gas tax holiday by himself. He would need buyin from Congress.

[00:10:59]Republican members of both the House and the Senate said that they would introduce bills to suspend the tax. That tax currently stands at 18.4 4 cents a gallon. That's the same level since 1993 going all the way back. It has not been adjusted for inflation. AAA says that the average price of a gallon of regular unled gasoline nationwide right now is about $4.50. So when you think about it, 18.5 cents is not going to be a very significant um number on a percentage basis at least. I think for diesel it's a little higher, maybe 23 or 24 cents a gallon. There are some states that have already suspended the state taxes that they've put into effect. I think Georgia and Indiana have both done that already.

[00:11:40]Other states have reduced their gas taxes. Um but people who are on the other side of this argument say uh first of all it's not going to be a substantial decline. It doesn't address the root problem of why oil prices have gone up so high. Um and in the meantime, it would rob federal um funds needed for infrastructure projects that are along the way. Um, but it it is something that's being discussed in Congress at the moment as well.

[00:12:08]>> We are learning more about the CEO delegation that will accompany the president to China. White House official telling CNBC that President Trump has invited Tesla CEO Elon Musk, Apple CEO Tim Cook, Black Rockck chief Larry Frink, and Boeing head Kelly Ortberg.

[00:12:22]That inclusion of Musk could signal a further thawing of relations between the president and the world's richest person after their public falling out last year.

[00:12:31]I don't know about that. We can discuss that in a second. Also expected to join the president's delegation, the CEOs of Blackstone, Cityroup, GE Aerospace, Goldman Sachs, Micron, and Qualcomm.

[00:12:41]Interestingly, Nvidia CEO Jensen Wong, who was of course been in close orbit around the president since his return to office, notably not part of the trip. He told Jim Kramer last week, it would be a privilege to accompany the president to China if he were invited. Of course, it may not make sense for somebody like him to be invited given uh that we're not we don't want necessarily to sell those chips.

[00:13:05]>> He wants to sell those chips.

[00:13:06]>> No, he does. No, he wants to sell those.

[00:13:08]>> Probably like to sell those chips, but he would probably also like to lay low at the moment because Congress has not been a big fan. There have been congressional leaders on both sides of the aisle who have not been a fan of allowing those.

[00:13:18]>> Oh, no. I'm sure he wants to he would like to sell those chips and be at that meeting. I think that it's the message but I think part of this whole situation who's been invited who's not is been a messaging story from the white house about what the US wants to sell into China what they don't want to sell into China and then separately I was going to say I do think to some degree there may be a thawing with the relationship with the president uh and Elon and I think you even saw that a little bit at Charlie Kirk's funeral and in other places but I think the bigger issue even more than that is >> the idea that we do want to sell Teslas and other things like that into China.

[00:13:53]So, I think it's a bigger almost economic argument.

[00:13:56]>> Some diplomacy at at work behind the scenes probably on this, too.

[00:14:01]>> Yeah. We don't want to sell any of their cars here.

[00:14:04]>> No, >> but we don't want to sell our their cars here.

[00:14:07]>> Complicates complicates the matter.

[00:14:11]>> TE's will be next.

[00:14:13]>> Coming up on SquawkPod, one of Elon Musk's biggest bulls. But that's more than 35% of your funds that are now in Elon Musk companies. It is Ron Baron. He grew his portfolio from about $10 million in 1982 to 10 times that by 1992 and now he's at 55 billion and a big chunk of it is wrapped up in the world's richest man.

[00:14:37]>> There's a lot of plays that people can have. I don't need other plays but you can have a lot of plays that people will benefit from the work that he's doing.

[00:14:45]And he's a copy. This is an unbelievable person.

[00:14:49]>> An extended exclusive conversation with Ron Baron right after this.

[00:15:02]>> This is Squawk Pod.

[00:15:04]>> Stand Andrew by 3 2 1 up and Andrew cube Mike.

[00:15:09]>> You're watching Squawkbox right here on CNBC. I'm Andrew Osorin along with Joe Kernan and Becky Quick. We have a lot of ground to cover with our next guest, beginning with Elon Musk's SpaceX, which is planning the largest stock debut in history. So, let's get right to Ron Baron. He is an early investor in SpaceX. He is the founder, the CEO, and the portfolio manager of Baron Capital, which started out in 1982 with $10 million in assets under management. By 1992, it had grown to hund00 million, and today it is around $50.9 billion in assets under management. And Ron, I want to thank you for being with us this morning.

[00:15:46]>> Um, to be exact, 55 bill, 898 million.

[00:15:51]>> 55 billion.

[00:15:52]>> 55 billion.

[00:15:54]>> When you were on with us in November of last year, it was 45 billion. What What grew?

[00:15:59]>> Oh, SpaceX grew. And uh, I guess I don't know, but I mean that's the big one. So that happens to be 15 billion out of our 55 or 56 billion is SpaceX and Tesla is our second biggest at five billion. So we made our clients $61 billion in profits and ourselves since 1992 when we had hund00 million 61 billion came from a hundred million. And now I think that in the case of Tesla which we've been investing in met him in 2010 in an IPO uh took me four years uh to be con become convinced that he was going to be successful. I thought he was brilliant. Kept talking to him, kept visiting him 2014, go to visit him again. I said, man, I have to invest in this now. Uh now is the time. Stock triples from 25 to 75. I don't own a share. It doubles again. The pain is too great. And then and then we invest $400 million between 2014 and 16 and make about$8 billion so far in profit. and I think we can make five times that amount in 10 years. And then SpaceX starting in 2017 because I have this relationship with him. Um it's very good. Uh and I learn about SpaceX and I'm interested in it. I say I'd like to invest in that.

[00:17:18]And they do these tenders twice a year in SpaceX because every single employee is a shareholder in SpaceX. I say, "Becky, you are this fantastic engineer.

[00:17:28]You're making $250,000 a year, but what uh you're now worth $5 million. Don't you think it'd be a smart thing to sell some of that stock a little bit to put the money in the bank and protect your family? So, they have these tenders twice a year per billion dollars a piece. And we've been one of the largest, if not the largest purchaser in each of these deals. And recently, and they get overs subscribed without any announcements and no bankers been oversubscribed in one afternoon. And so we're treated just like one of the largest institutions in each one of these offerings.

[00:18:00]>> Basically, you are paying the employees so that they can become more liquid and hold on to those things. And that's how you've gotten your ownership stake.

[00:18:07]Exactly. And this private company invested, >> which by the way, that's part of the reason that this company has been able to remain private for so long.

[00:18:13]>> Yeah. Because Right. and uh and and so we've invested about a billion7 since 2017 and that's now worth about 15 billion at current market prices. So of the 61 billion of profits 20 billion come from him.

[00:18:31]>> You have been somebody who has been um an apostle kind of speaking about this for years. I can remember having a conversation with you probably back 2020 2021. You tried to convince me to do it.

[00:18:44]we're not allowed to invest and I had to tell you that. But you were saying SpaceX is where it's going to be. This is the investment you really should get into. Had to say no the whole way through. You're now looking at this company about to go public and and what do you think the opportunity is here?

[00:18:57]What do you think happens?

[00:18:58]>> This this is going to become uh the largest company on the planet. This is this is so when you go public, I don't know if it's going public at one and a half trillion or one and three/4 trillion or maybe a little bit more. uh but where it goes public I think that the company over the next 10 or 15 years is going to be worth 10 trillion 20 trillion 30 trillion and I could be very low could be very low on where it's going to be so uh what so today we can talk a little bit about >> in why yeah let's let's talk about why because like 70 billion of that would be what what the public can actually buy into I think >> 70 billion exactly right in fact right after the offering uh then they've They've changed the rules so that 5 days after the IPO is completed, there will be uh one index in which it will be included. 10 days, there will be another index in which it's included. 15 days, there will be another index in which it's included.

[00:19:56]>> You're talking about the NASDAQ index.

[00:20:00]>> The uh the president New York Stock Exchange can you know when when I was young, I drove an ice cream truck uh one summer and maybe a summer and a half.

[00:20:09]And one of the things that was important to me was I had to get my carnival bar ice cream truck to the beach route before Mr. Softy got there. And so you have so so one of the guys in my office said and the New York Stock Exchange president wanted to come over and talk to me for some advice. And my friend says Pat Padalino is our chief operating officer said, "Do you ever think when you're driving that ice cream truck that the president of New York Stock Exchange is going to come talk to you for advice?

[00:20:35]Are you serious?" and and they said, "Well, I was able to meet Mr. Softy to where he was going and and and so so >> so he came to ask you for advice about whether they should put that into the index early."

[00:20:46]>> Well, she was telling me about the different indexes, but she was also uh hoping that they would list on the New York Stock Exchange and they chose uh they chose NASDAQ.

[00:20:55]>> I think they've chosen NASDAQ, which is where all the uh technology companies are. and she was saying that, you know, there are all these other things that she could offer, >> but that was part of the auction process where the two exchanges were bidding it up, saying, "Hey, we can offer to get you into the index sooner."

[00:21:10]>> I don't know. I I I think they've pretty much decided that as a leading technology company, they should be listed on NASDAQ where all the other large technology companies uh have been listed. But uh but there are lot there's a lot. So what enabled this company is him. Uh so he comes up with the idea that you'll be able to launch a rocket and reuse it and uh and no one ever did that before and no other rocket company was interested in doing that because if they did then what would happen is that there would not be a demand for as many rockets and nobody wanted to do this and and they always said it was impossible.

[00:21:45]They said it was impossible because nobody tried and when they did try it takes no nobody's been able to accomplish it. So that's what enabled this that's what enabled us to have Starlink and Starlink after you have that uh and we have the Falcon 9 uh then that brings it up and comes back then we decided hey wait there's a demand for in space uh data centers and having instead of having data centers on our planet where it's very very difficult to get the governor won in New Jersey because she said our electricity bills are too high. we're going to stop this data center construction, making our electricity bills go up. Her roommate when she was in Congress is the go is a candidate for governor in Virginia. She won. Same same idea. So So here you have people who are saying >> not in my backyard.

[00:22:31]>> That's the deal.

[00:22:31]>> And nobody wants it in their backyard.

[00:22:33]So send >> I would have thought they would like it because it would pay taxes, but but people don't like it because um you know not enough jobs and because their electricity bills are going up and the water usage too. water is short and electricity is a problem.

[00:22:46]>> And the water you need for cooling which you don't need in space, >> right? You don't need the cooling in space, number one, as long as you have giant radiators. And then electricity, which is a huge cost, you don't need that either because you're using the sun. So basically, you're getting free, free electricity and free cooling uh once you get into space. And so now because of the idea of going to space, uh we've now developed the Starship. And the Starship once that works is going to be a hundred times as power, you know, 100 uh I guess it's 200 tons that they could bring to space. And now the Falcon 9 brings I think 17 or 18 tons to space.

[00:23:20]So huge unlock is coming from Starlink >> come from from the uh >> I want to talk more about this in a second, but I you are somebody who has completely tied your fortunes to Elon Musk and you have done very very well by doing that. It's the reason that your firm has so much in assets under management at the moment. But you pointed out yourself that the ownership that you have right now 27.2% of your funds are invested in in SpaceX. The second largest position is Tesla with 8.4%. So that's more than 35% of your funds that are now in Elon Musk companies. If you're right, and if SpaceX take takes off on the IPO, you could be talking about a much larger percentage. I remember a time when you sold Tesla shares. the only time you sold it and the reason you gave is because you didn't want to be that leveraged to one company to one person to Elon Musk. Have you changed your mind completely on that?

[00:24:13]>> No, I've never changed I never wanted to sell any shares. It just I I was getting criticized everywhere. So we sold in 2022 at the end of uh the year uh we sold about uh a quarter of our shares in Tesla for clients. Personally, I have never sold a share. And in fact, I made a deal with our uh with our directors of our mutual fund. I promised them I would no longer invest for myself. This is in 1992 or 95 somewhere. I said I would no longer invest for myself. And when I tried to get everyone else to invest in Tesla at Baron Capital, no one wanted to do it.

[00:24:52]>> And and so I went to the board and I said, I'm not taking anyone's opportunity. if you let me do this, I can make this much money which is going to make Baron Capital stronger uh and financially and uh and I'm not doing it for myself. I'm just doing Bar because I own Baron Capital, right?

[00:25:08]>> Uh 11.7% of the assets under management are the the Baron family, >> right?

[00:25:13]>> So you're invested right alongside with your clients, >> right? Uh and and so I said, "And if you let me do this, uh I'm the last person to purchase it and I'll be the last person to sell it. I will not sell a share until I sell all of my clients stock across the board.

[00:25:28]>> But do you regret having sold those shares with to caving to pressure at the time to sell your investor shares?

[00:25:33]>> Clients all of a sudden stock was up 20 times.

[00:25:36]>> Yeah.

[00:25:36]>> And uh and all of a sudden it became such a large investment for my clients.

[00:25:40]I said uh and and I started getting calls and they were nervous and I said, "Okay, we'll sell a quarter of your stock." Personally, not a share. Uh well with Baron Capital, not a thing. I have never sold a single share of Tesla. uh and and never will.

[00:25:54]>> So, have the shareholders not are are they no longer calling and asking for you not to be so exposed to Elon Musk?

[00:26:00]Is that >> I haven't heard that lately. Now, now it's Tesla is up 40 times. Right.

[00:26:05]>> So, it was up 20 times. So, now it's up 40 times after three or four years when it has changed very little. Most people can't tolerate having an investment which doesn't change a lot in price over a long period of time u because they're investing in themselves to do new things. Now is a great time for Tesla.

[00:26:23]Uh there's if you read the transcript of the last earnings call and you look at the chart, they give you this table of a book and they describe they have pictures. It's a picture book. So it's a paragraphs on each page describing the factories and the opportunities they have. So Tesla when you read about all the things that they're doing right now, now is the time for Tesla. And I think that Tesla, you know, as I mentioned before, I think it's going to be 2,000 or 2500 over the next uh 10 years. Uh, but that that's that's one. But SpaceX is the one. When we're talking about how they're going to do on the IPO, who knows? But the idea that I have that we have is that this one and a half or one and three/4ers or a little bit more uh IPO, >> trillion dollar IPO is I I think it's going to be, as I said, 10, 20, 30 times that amount. Uh, and you should try to figure out for your families how you can get to own some SpaceX. It will be the largest company on the planet.

[00:27:22]>> Do you expect, and there's a lot of people who think a year or two from now after this happens, that SpaceX will ultimately buy Tesla and will all be one company? Is that in the cards for you?

[00:27:35]>> Um, so I think there's pluses and minuses. And uh one of the directors said to me, "Ron, if you're asked that question, I'm sure a lot of people ask you that question because they think you know, and you don't know anything, and I really don't know anything. Uh and u you know, uh just say you don't know." So I don't know.

[00:27:56]>> No, I I I recognize you don't know. I'm I'm curious what whether you think that that would be a a good thing ultimately and whether whether you're betting on that, meaning like that's something in your in your mind that that you're betting on the future of all these companies. Do you think that happens?

[00:28:09]I'm not betting on that.

[00:28:11]>> Uh and because >> because you know they're able to accomplish a lot the way they are structured right now and I don't uh yeah there's as I said pluses and minuses. I don't want to discuss them now but I mean I I think there's good reasons why you should do it and good reasons why you shouldn't do it. And whatever he decides is the best thing to do. You know when you're worth trillions of dollars ultimately for him. Uh he's not doing this to make as much money as he can. He's doing this because he has some feeling about the planet and so basically maybe it makes it easier to operate. Uh which is true I'm sure. Uh but then you get a different valuation on the company which is also true. So I don't know what he's going to do but whatever he does I'm sure there will be good rationale for it and whatever he does it's very unlikely that uh that I would say it's not a good idea. How do I know? He's the only I'm not trying to run a company. He's running the company.

[00:29:03]You know, it's really hard as an analyst when you're following a company like this. It changes so much and grows so fast. I've never invested in anything like this before. My entire life, I've never invested in anything like this before. I was talking with one of the guys at Goldman uh and uh he and we were talking about valuations. He says, "Ron, did you ever know about the East India's uh trading company?" I said, "Yeah, a little bit." And he says, "166004. What happened is they had the ability to go from Europe to Asia, trade uh you know spices and fabrics and and they had exclusivity for 22 years and they went out and they raised the money from the people in Holland and they raised it with uh uh you know with with uh inventing the uh the limited liability corporation. So all you could lose was what you put up, not anything where you would lose your house and your job and your family. That's all you could lose.

[00:29:57]And then they had a trading operations.

[00:29:59]They raised the money and for 22 years they had exclusive ability to get to to to Asia from Europe and they became the largest most powerful company on the planet. This is what we got with SpaceX.

[00:30:11]They're getting you to space and the things they're doing in space are different than anything anyone can do on this planet. And and this is going to be a huge space economy. Lot there's a lot of plays that people can have. I don't need other plays, but you can have a lot of plays that people will benefit from the work that he's doing and that he's accomplished. This is an unbelievable person.

[00:30:32]>> Has your investor base changed over time or do you have people who are so eager to get in on SpaceX that they have been drawn to Baron Funds over the last >> We're getting a lot of flows right now because of that. Uh and and what I try to tell people is that yeah, it's really nice that uh the stock is going to be priced higher when uh when they get public. Uh but the thing you should be investing in is not because you're going to make that, but rather the big gain is when I'm I'm buying. So at the IPO price, uh I' I've got an order for the billion dollars. Uh that I want to buy more stock at the IPO. I don't know if we're going to get filled, but I'm going to try and and and I think and I'm not buying it because I'm buying at the IPO price and I'm not buying it now uh because I think that do better in the short term. I'm doing it because I believe deeply that this company is a major game changer. No, he's talking about infrastructure. It's a Starlink.

[00:31:30]They are going to be the internet for the entire planet. The internet for the entire planet. Nobody can do this except for them. So, they're going for >> Yeah. But I had it on United. It got in immediately.

[00:31:42]>> Amazing, right?

[00:31:43]>> It was amazing.

[00:31:44]>> Yeah. Delta didn't do it because they wanted to have an interface uh where when you got on the plane, you would see a Delta image and you pay the bill to Del. He didn't want that. He said, "You want it? We'll we'll be delighted to put on and they're doing it." NetJets.

[00:31:58]NetJet says that I'm responsible and you know, one of the people is responsible for uh for them to be able to get uh the uh the internet on NetJets. And they're now doing 50 planes a month, 600 this year. And I haven't seen it on my plane yet. Uh whatever planes you use, but um they're going to get 600 a year. I think the flight netjets might have 1500 planes, 1,200 planes, but they're getting it on it >> and and once you fly in that, you have that and you don't have the ability to use the phone when you're flying around ordinarily and all of a sudden you get it there.

[00:32:36]>> Well, I think it's going to be a game changer for that. By the way, it's going to be game changer for United.

[00:32:39]>> Yeah.

[00:32:39]>> Yes.

[00:32:40]>> I think actually United is going to have for the for for a period of time because, you know, Delta's not going to have it for a period of time. There's going to be a period where if you want to have >> Starlink, which is a game changer, >> you know what it used to take >> business folks are going to get on those planes.

[00:32:52]>> You had to do back flips.

[00:32:53]>> Even last week, I had a or two weeks ago, I had a United flight that I couldn't get the Wi-Fi on.

[00:32:58]>> This is just that said you want Starling. Yep.

[00:33:00]>> Yep. Done. Done.

[00:33:01]>> But but you have to believe it's more than Starlink.

[00:33:04]>> So Starlink alone, I think, can be worth um 14 15 trillion dollars. Starlink alone >> as as a global player. Assuming that these satellites are literally covering the entire globe.

[00:33:18]>> So they have 10,000 satellites now.

[00:33:20]They're on the way to 20,000. They have 9 million customers last year. They have 15 million this year. They're going to grow 50% a year. They could have 300 million customers in 10 years. Then they got enterprise and they got the government and there's 8 billion people on the planet. Three billion don't have the internet. And a lot of billion.

[00:33:37]>> By the way, are you assuming that Kyper, which of course is the Amazon version of this? You would never bet against Jeff Bezos, but he's going to have a niche.

[00:33:45]You can't compete with a guy who has all those satellites up there already and all those customers and already serving and he's going to be like a virtual network and and sooner or later one of these big uh telos is going to sell them access to the city. Uh so he's now got the uh he bought spectrum so there's a lot of services that he can uh >> you think he's gonna actually be providing like uh ground level cellular service as well and as an integrated product >> if you have more than 50% of the people doing business with you on the internet you are the internet >> and so he's going to have uh I I think the opportunity is somewhere around you know a trillion ion dollar of annual revenues for him. Uh and uh and then maybe making 70 80% profit margin 10 years 12 years and uh that could be worth 14 15 trillion dollars alone just startling.

[00:34:44]>> Is there ever a chance that the government I mean you just said he is the internet if you're more than 50%. Is that ever a chance that it would bring the government in to look at it as monopolistic behavior? Of course. I mean uh you know we live in a very ligious society.

[00:35:01]>> Yeah.

[00:35:01]>> And and uh and and and and people are jealous or upset by but but his goal is always making things better, faster, cheaper. Better, faster, cheaper.

[00:35:14]Whether it's how many railings you put on platforms that are used in the factories to prevent people from falling off. He looks at purchase orders when he goes to visit office. When he goes to visit factories, looks at purchase orders. Show me the purchase orders. And and here are these two railings. What do we need the second railing for? And then uh and then uh uh why do we need these railings on the low platforms instead of only on the high platforms? Nobody's going to hurt if you fall off a low platform. So So basically every it's the culture >> the culture is low cost. as quickly as you can get the cost as low as you can because everything gets commoditized sooner or later. Competitive advantage now and you gota his advantage is he innovates faster than anyone else. So the culture innovate fast and and and perform and do things better than other people.

[00:36:05]>> Okay. So two questions. First of all, is Elon Musk the most important person you've ever met in your life?

[00:36:11]>> Yes. Yeah. and uh unusual for sure and uh brilliant for sure. He's got a heart for sure. I really like him and you know people when you asked me before about tying my business uh so closely to him is that to hear my whole life has been you know since 1970 I come to New York in 1982 and I'm I'm I'm living in a basement in 1982 and and doing chores for my friend's wife and then 1982 uh starting capital and I'm this analyst in 1970s and then 1982 uh you know not very much and then uh and then a bunch and now it's going to be I think big and and uh and so so so all these years I build this business and then I push all the chips at the center of the table and people say really is that what you're going to do >> it's your all-in moment >> allin >> and and and So, uh, so I think so I I I sort of think analogizing to I'm not like like JP Morgan, but he's the guy who financed Rockefeller and I certainly am not financing Elon Musk, but I'm part of it. And and to be tied to the most successful man on the planet, uh, I think it's a good thing. Clearly risky.

[00:37:40]>> Uh, but, uh, that's my game. And I think by the next 10 years or so. So >> risky from the from the fact that it's a key man.

[00:37:48]>> One person.

[00:37:49]>> Yeah. It's one person.

[00:37:49]>> But there's 130,000 people there.

[00:37:52]150,000 140,000. He gets the best people and and people apply for jobs. I think they hire 30,000 people a year and they have uh you know four million applicants, three million, five million applicants. People, everybody wants to work there for one of his companies.

[00:38:06]They want to be able to to go into meetings with him. And he walks away and he says you can do this. Then he said, "We can use reuse rockets." Really? You can reuse rockets? Yeah. Not only that, what we're going to do is we're going to land him on a boat offshore initially.

[00:38:20]You're going to land on a boat? Really?

[00:38:22]And and so he'll walk out of the room and and Gwen will say, "If he says you can do it, you can do it." And then when they look at how much things cost, he knows how much everything costs. And if it doesn't, if he's not being charged the right amount, and if they're making too much of a profit, then he's going to do it himself. They terra fab. So he needs to have 50 times the number of chips, the number of compute that's available right now. 50 times. So he goes to TSMC and he goes to Samsung and gets to tries to get and nobody's going to be they got great businesses. So why are they going to take a big risk building a factory they don't know that he's got this huge demand for? So so they say well I don't know we can give you the and and they he can't get enough chips. So he's going to build a factory called Terraab. And he has this whole idea about what he can do. So the chips that we're buying from Nvidia, he'll never stop buying them, but the chips he buys from Nvidia, he uses 3% of what Nvidia provides. 3%. So he says, "Gee, and and they make an 80% profit margin."

[00:39:26]So gee, I can do that. And I have I I'm a good manufacturer and what I can do is I can I have ideas on how we can make them faster, cheaper, simpler and I can do that. And when he does that, he's going to build this facility. He's going to make the chips at a fraction of what's going to cost to make 50 times as many as the whole world is producing.

[00:39:47]>> Yeah. Obviously, you are a believer and it has done very well for you and your shareholders. Ron, I want to thank you very much for joining us this morning.

[00:39:54]One quick question before you go. Um, you said it looks like he's leaning towards the NASDAQ for the IPO for SpaceX. Is that based on what you know or is that just based on what you've read?

[00:40:04]>> That's based on what Lynn Martin told me.

[00:40:07]>> Okay.

[00:40:09]>> She's the head of New York Stock Exchange, right?

[00:40:10]>> So, I don't know if and you know, I was disadvantaged coming to talk to you now because I told you before that I wanted to wait until the S1 till I could could read it, >> right? So the information so I have an advantage over other people trying to invest in SpaceX now because I've been investing in it for nine years. Okay.

[00:40:28]>> Uh so basically I have knowledge I don't have I don't need to get the knowledge that's been uh that is available uh right now this uh you know in a quiet period I've already got the knowledge >> right being an investor for so long >> right and so I know what you know what I I have this idea about what it's going to become. So it's Starlink, it's Starship, it's comput AI, it's Oh, you didn't even terraform and it's Grock. So can I get two more minutes on Grock?

[00:40:58]>> Probably not too. How about 40 seconds?

[00:41:01]>> Grock is like uh anthro anthropic.

[00:41:05]>> And so Anthropic just Anthropic invested in compute and they've done amazing.

[00:41:10]They've grown from n billion dollars of annualized revenues to 40 billion in four or five months. Nine billion to 45 billion. the opportunity is something like uh 27 trillion a year and they're at 9 45 billion and Grock is the same thing. Grock what Elon thought is what we need is compute that's the limiting factor compute so he invested in compute the other guys all invested in software now they just announced a deal yesterday or the day before the day before where uh Anthropic is going to use the compute that we've built in in in Memphis we build a cheaper faster and better than anyone else super fast that's us like oh and by the way so the idea about betting against someone you never bet against the guy with superpowers hours who would never give up. That's him.

[00:41:58]>> Ron Baron, thank you very much for being with us today. We appreciate it.

[00:42:02]>> Thanks for having me.

[00:42:05]>> We'll be right back.

[00:42:14]And that is Squawk Pod for today. Thanks for listening. Squawkbox is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorcin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our TV show right into your ears when you follow SquawkPod wherever you get your podcasts. Have a great day. We'll meet you right back here tomorrow.

[00:42:37]>> We are clear. Thanks, guys.