Tesla And SpaceX May Have An Unfair Advantage

Added: 2026-05-26

[00:00:00]Elon Musk company SpaceX and Tesla seem to be able to accomplish things no other company can match. Today, we'll watch videos of Elon Musk, Jeff Bezos, Shamat from the All-In Podcast, and Kathy Wood from Arc Invest to hear what they say.

[00:00:13]Elon believes you should first focus on building the best product. This is more important than brand, he says, and then predict the bottlenecks that's coming in the future before others do. Jeff Bezos praised what SpaceX has done, and he says he'd love the world to have at least two SpaceXs. He says, "Great industries are made up of big competitors." In a recent All-In podcast, Chamat laid out the case for SpaceX being valued at $2 trillion.

[00:00:37]Chamat says there's a very specific strategy Elon follows, and it creates a flywheel that is hard to beat. Finally, we'll watch Kathy Wood of Arch Invest share what she sees most people are completely missing about the AI boom.

[00:00:49]And yet again, Elon was ahead of the game. Today, we have Jeff Le joining us.

[00:00:53]He's a multi-deade supply chain executive and chief quality officer.

[00:00:56]He's now CEO of his own high-tech manufacturing consulting firm. Welcome, Jeff.

[00:01:00]>> Hey, it'd be fun to break these down.

[00:01:02]>> Yeah, let's watch these uh videos from Kathy Wood, Chamat, Jeff Bezos. They all praise Elon and they specifically outline each of them what they think is Elon's strategy. U the first one I know you know a lot about which is build the best product possible. Word of mouth marketing is what you matter more. Um remember this two years ago James Stevenson reminded everybody two years ago Elon destroyed the Tesla brand globally it will never recover. I am very aware of what happened there.

[00:01:34]Friends and family kept telling me what has Elon done and absolutely he did damage the brand but people thought h it's forever nobody will buy Tesla again. But that's not the case because today Tesla's Model Y is the number one selling EV in California. the number one selling EV in the US, the number one selling EV in Europe, number one selling EV in China. Elon replied to him saying product is much more important than brand. Can you speak a little bit about that?

[00:02:03]>> I can and I can also probably share the there's another side to this too. I'll be a little bit critical on but in in terms of the the the product and the brand the product can create the brand based on how how people receive the product its reliability its word of mouth uh recommendation and Model Y is all told it's going to be one of the best vehicles ever made. It's going to be one of the highest selling vehicles ever made. But one of the things just to be a little bit critical that we have to be careful about with these it's the number one here, it's the number one there. Tesla purposely has a very low model count and that's to their advantage and I think they are very smart for doing that. Other companies have taken a different approach of just spraying out a lot of so what's happened in EV over the last 5 years is a lot of models have been put out there. So, I don't see anybody besides Xiaomi trying to get, you know, one vehicle into, you know, really decent high scale and really focusing on low model count. Uh, but that that is that is part of this.

[00:03:18]The competition has failed and they have a high model count. But but in the meantime, in the past three years, four years, I think we're now globally one in four vehicles sold as an EV. So EV adoption globally has grown. It has not grown in the US just to be very clear.

[00:03:40]But globally EV adoption has grown and Tesla has not grown at that rate. So there is something to be said. I think you we can be a fan of Tesla and what they're doing and and from a supply chain perspective, I think it's brilliant what they're doing. And from a product perspective, I think it's brilliant what they're doing. if there was uh one more product um they may have taken the market share crown with it as well. And remember we talked about them doing new affordable vehicles and they did we always thought I at least always thought that they would do a larger Model Y and a smaller a smaller Y. And I'm not saying I'm smarter than Tesla.

[00:04:22]I'm just saying if if from a product positioning perspective if there was a $30,000 vehicle in the vein of a Model Y, um I think we'd not only be talking about Model Y being the number one selling vehicle, it' be the number one selling platform and Tesla may be selling 2 million or more cars a year already. Um I'm not sure that that moves the needle though, but it's just an interesting conversation to have. So anyway, there's two sides to this conversation. I think if you're in you're looking at Tesla, you're looking at growth and you're looking at the stock over the last five years, the AI story has been building in the background, but the vehicle story has kind of stalled a bit and is slightly down. So, these figures are good. This helps Tesla get the gross margins that it can garner and it helps them um it helps them massively on the efficiency side, but there is something to be said with the overall EV market growing and then Tesla's overall uh unit volume not growing. So just something we have to keep an eye on.

[00:05:19]>> Yeah, that's a very good important point about the uh the number of models. Uh but that's part of the strategy, right?

[00:05:25]Elon says okay, let's focus on one thing but build it so good. Um make us good.

[00:05:31]The other person who knows really well how to build great product is Jeff Bezos. Amazon is one of the best market the best out there e-commerce marketplace. He knew this 20 years ago and he relentlessly focused on customer service. Um so but the two of them are amazing built amazing products uh worldleading but they both knew that you need to the world is changing and they somehow knew that you needed to get into space and Jeff Bezos is uh certainly working on autonomous robots. Uh his his his Amazon warehouses have the are the most robotic companies in the world.

[00:06:10]He's working on autonomous transportation trying to fund some companies. curious that he hasn't actually bought an EV company himself.

[00:06:17]Uh but he's certainly funding them and he has SpaceX or his version of SpaceX.

[00:06:23]He knows that that is something critical. So he's probably number two in the race to be able to you know Blue Origin to get up there. So he was interviewed recently uh we've shared a few of these clips. Here's another one where he said that he's very admir has huge admiration for SpaceX and what they've done. One of the things that's amazing is you're doing this at a seems like more a price competitive price point than your competitors.

[00:06:52]>> We have to you know this is the space travel is a solved problem since the 60s if you don't care about cost >> right >> and so what we're trying to do here is all really about economics. We have to build a vehicle that not only does the mission but does it inexpensively and that unlocks a lot of progress for humanity if we can do that and that's what SpaceX is working on. You know, this people ask me some, you know, about SpaceX and I would say I think I'm very uh admiring of what SpaceX has done and I want the world to have at least two SpaceXes, >> right?

[00:07:30]>> You know, maybe even more great industries are made up of many companies.

[00:07:35]>> Where do you see where you guys are compared to where they are? And what does your own trajectory look like? They have the the uh Falcon 9, the the smaller vehicle they fly, not Starship.

[00:07:47]>> Falcon 9 is the most successful launch vehicle ever created. And so it flies, you know, more than 100 times a year.

[00:07:54]It's highly reliable. It's inexpensive.

[00:07:58]And so it it's a it's it's a huge success. And so uh with regards to Starship, so Starship is much larger than Falcon 9. New Glenn is much larger than Falcon 9. So, this next generation, we're, you know, we have, we're kind of in the race.

[00:08:15]>> We're in the race, right?

[00:08:16]>> And my guess is both vehicles are going to be successful.

[00:08:20]>> When you first got involved in this >> Yeah.

[00:08:22]>> and somebody told you what this was all going to cost.

[00:08:25]>> Yeah.

[00:08:26]>> That like you would have to personally invest the money in, right? Because you're basically buying all of this stuff.

[00:08:32]>> Yeah.

[00:08:32]>> Were you like, "Oh my god, that's crazy."

[00:08:34]>> Or >> no, >> no, >> no. I was like, "This is a good investment. It's long-term, >> right?

[00:08:42]>> It's a long-term investment." I knew what I was signing up for in terms of time >> and how much patience it would require, but I believed it was a very good >> move faster than you thought it would or slower.

[00:08:53]>> It's moving faster than I thought it would.

[00:08:55]>> So, where did >> It's moving much faster than I thought it would.

[00:08:58]>> Wow, that was a great interview. I I like what Jeff was saying. What's your thoughts, Jeeoff? It >> was a Yeah, it was a It was a good interview. I encourage people to watch the whole thing. Uh I I think he's talking about a number of things. One is you don't need to just have one player in an industry because that could actually uh dampen the the total available market of the industry if there's just one player to go. This comes back to the robo taxi conversation of Tesla doesn't need to have 100% market share to be wildly successful in that and they won't. And I think it's actually a good thing that there is uh competition, but I think robo taxi will be well well distinguished. Um he talked about a number of things. It's a multi-deade horizon what he started with um Blue Origin and you're not you're not going to get a return on those in that investment for it's going to be measured in in decades. But I think the importance of it is key. And the fact he talked about it being a solved problem for six, seven decades. That's true. And same thing applies to EVs as well. EVs at one point were solved a long time ago actually. But the ability to economically produce something that people want to buy has been the challenge. And that was a challenge for many decades with combustion engine vehicles as well. And then that the economics piece of that was solved. and the economics piece of EV will be solved as well. So there's a lot of parallels to what he was going to to Tesla and of course to to SpaceX as well. So I thought was that was a really good that was a really good interview and he is a special entrepreneur uh the way he approaches problems. I' I've had a number of colleagues, direct colleagues that have worked directly for him and and in his companies and he will go down, you know, he's he's a different he's a different CEO than than Elon, but his his approach to problem solving, getting to the root cause of things, having getting an organization that works together and really thinking about scale and thinking through scale at many different levels, there there may not be anybody else like him and uh Elon and him are quite quite complimentary uh in their skills and capability. Um but it kind of looks like that he's trying to like copy a SpaceX and do it, you know, he's like he's trying to do everything Elon is doing. But people should realize that he is a very very special CEO and we we're we're super lucky in the US to have CEOs like this.

[00:11:35]>> Yeah. Oh, so right. So number one, I got a lot of comments here. number one relentless focus on grading pro uh he is been there he was in fact arguably before Elon right because he was building um Amazon 1995 uh and his you know remember dot comb where he was just kept reinvesting because he believed in the future very similar to you know somebody who's great entrepreneur sees >> relentless focus on cost so few entrepreneurs uh CEOs top companies do this and Elon is famous for this and but so is Jeff focus on cost because what you were saying earlier which is cost is is so crit is part of the equation of creating a great product. Um and then and then his his thing about copying well you know more more competitors should just copy Tesla and Elon instead they'll say no you're wrong he's proven right you know the liar one is a very good example the Chinese who copy him >> who's who's number one and two now who's number two and three is and and uh uh >> Xiaomi and Shaong and Xiaomi why why are they number one and two two and three because they copied Elon as soon as possible as he said we need to do vision only we need to do neural nets you need to have a supercomputer you should have your own chip they just said okay let's do what you're doing if more companies did that they would be so far ahead and so I don't feel like u Jeff Bezos is copying Elon he's just more like he he sees what Elon saw early on as well you need to be in space >> and there's one there's just one parallel too between the companies you know Amazon focuses is on reducing the friction from you. How do how do you see the product you want to see? Then how can you buy it and get it to you as quickly as possible? Like reducing the friction along the way. Uh the prime to prime delivery. Uh the number of clicks involved from seeing the product to it showing up on your door.

[00:13:35]>> Not just the whole ecosystem.

[00:13:38]>> Uhhuh.

[00:13:38]>> Yeah. And there's a famous story of Elon focusing on that at Tesla with the original system to to order a car and how many he had the number of clicks involved and that was measured. It was like in the 60s and he got it he tried to he's like how long does it take to how many clicks is it to order a pizza and so he thinks of things in ways and there's no reason that that purchasing a card needed to be more involved than what it was. So it takes a very special CEO entrepreneur to think in this way.

[00:14:11]But if you can reduce friction, people will buy more of your I've sat on my couch and ordered a Tesla before in a few clicks. It's kind of feels weird, but then it you know, it doesn't it's like, okay, this is this is a much better experience. And the last time I went to a car dealership, I had to help a family member buy a combustion engine vehicle and we were there for hours and I came out of that experience a couple of days. All of a sudden, I'm sniffling. I got the worst cold because I had to sit in that dealership for hours. It just it just reminded me of the contrasting that experience with buying a Tesla.

[00:14:51]>> Uh I just did a show on the weekend. I really love doing that one. It's talking about Elon EWS, Elon Web Services, which is, you know, again, shockingly, what is SpaceX? Well, what is space? It's actually an AI company. What what what is Elon doing when when he was building these data centers 2, three, four years ago, he was planning to rent it out. So, all along he had already had this idea where you build something for yourself, then you rent out the areas that since you already built it, rent it out to other competitors. Well, that is what Amazon did with AWS. And we know that AWS is pretty well what made the stock skyrocket. It's the bulk of the profit.

[00:15:32]You know, e-commerce is obviously the base business, but AWS, we built all these things to support e-commerce. Why not rent it out to any business that wants it? That's the strategy. They both seem to follow along. Um, anyways, I just thought that that these are that's one of the things why I get so excited about following these major companies is is the business and the strategy and the products and just brilliance of what these guys are. These are the best practices both of them. Um, okay. Let's talk SpaceX. And Chamat from All-In podcast was interviewed and he talks about a very specific um flywheel that he believes Elon follows as his strategy. It's very interesting.

[00:16:16]>> If I'm asking myself, Chimath, how do I underwrite SpaceX at two trillion?

[00:16:20]Here's the basic math that I would do.

[00:16:22]Well, last year it did 181 19 billion.

[00:16:26]It'll probably do 25 to 30 this year.

[00:16:28]Okay. So, I'm buying this thing at a fairly costly premium, right? So, what am I buying? Well, I'm buying probably the most important internet infrastructure project that's happened since the internet itself. That's going to scale to hundreds of millions of users. And the reason that's going to scale to hundreds of millions of users is it's just very useful and it's just going to become cheaper and cheaper and cheaper. So, that's number one. I'm buying a delivery infrastructure. I think over time GDP plus 10, GDP plus 15 kind of a grower. So good business, valuable business, but it's the underlying platform that allows everything else to happen. And then I'm buying an AI business, which will be at the top level the apps, but at the bottom layer all the compute capability.

[00:17:09]So I suspect what happens is next year it's probably 40 45 billion. And then the year after that, it probably doubles again. So then I'm buying it at 20 times revenue. And you would say, well, why can you buy a company like this on revenue versus earnings and cash flow?

[00:17:24]And I think the reason is because what the revenue does is it gives him the operating leverage to go and invest in all of these other businesses that ultimately consolidate his differentiation and his competitive mode because what he creates is a capital mode that then accelerates a technology mode that then accelerates an execution and a learning mode. And that flywheel when it starts to spin very quickly and you would say, "Hey, hold on a second. It's probably spinning quickly now." I would say we're at the beginning of the beginning. He still has all these disperate assets. I still don't like the fact that Tesla's over here. And as I've told you, that will get merged in. And now you have this incredible corpus of physical capability, movement of all kinds, X, Y, and Z, right? That thing will look very cheap, I think, in a few years. and he has this one thing that nobody else. If you look at the big CEOs, who steps on stage where you're always curious, okay, what has he got up his sleeve? You know, the Steve Jobs. Oh, and one more thing. He's the guy. Whether you like him or you hate him, he's the guy. And there's a premium that is welld deserved that comes with that.

[00:18:33]>> Wow. There's so much here. You and I, God, I could spend hours talking to you about this. It's exciting.

[00:18:40]Curious about your reaction. It's hard to really state it. It's hard to really state it much much better than than what Chamat stated. Uh he thinks of these industries in multi-deade long horizons. He's he's not thinking of what I need to do this year. And next year, this is one of the reasons I think Elon frustrates us on these earnings calls because the last thing he's doing is thinking in 90-day increments. the the thing he's doing the most is thinking in multi-year increments. And I know that frustrates people, but if you if you rewind the clock back five years and all the investments that have been made in infrastructure in the compute in what now now you have Teslas that in large scale now we're over a million Teslas where people are paying a a subscription for the car to to drive itself to use Tesla AI services. So now we have a million of about a denominator of about four or five million vehicles that are capable of receiving this download using it and that's just going to continue to grow and you know Chimath talked about the Starlink example and that's going to grow as costs come down but it's also there's also this thing of it provides internet in places that you physically can't get internet today and that's a huge portion of the global population. So as that cost I mean it's going to grow uh massively. So the flywheel is real and you've got to be a visionary that thinks in multi kind of again a multi-year multi-deade horizon. I think that's one of the reasons Elon creates these master plans so people can see how he's thinking and connect all these things together. So when you when you step back and you watch these fintech shows on CNBC or Fox or Yahoo or Bloomberg and they're like, "Oh, Tesla did this in this quarter." I mean, that's fine. Um, we don't know what he's doing. BYD is selling more cars. But if you really step back and you look at the vision, investors are thinking a different way than what these fintech shows are preaching. And investors are thinking uh investors are are looking at the master plan. and they're looking at what this guy does over a multi-year horizon. They're not necessarily looking at every 90-day increment of earnings. I mean, they are.

[00:21:07]There's no question about it. We do a show on earnings every 90day Herbert.

[00:21:11]So, people are definitely looking at but the investors they're waiting they're m the waiting when I say waiting not waiting like waiting in line, but the waiting of where they're putting their dollars is actually more of on the long-term plan than on the short-term horizon. and in all of his companies, that's what he's creating. And and now it's getting back to the point where if you step if you step back further further and further, all of a sudden the lines between these companies are beginning to blur and it's like, well, why are they different companies? And I think that's what we're about to step into.

[00:21:46]>> Yeah. His strategy is so big in scale. I don't know if anybody's ever done it.

[00:21:52]Maybe you could say that the Rockefellers of the world did this as well because that's what they did, right? They they they they saw when it was time for Rockefeller, everybody was building these um oil and they were trying to capture the oil, but he saw transportation and no one else had. He bought all the railroads and then it distribution and then when he controlled distribution, all the other oil companies had to buckle and sell to him. Then he >> had the hu and then he was able to lower cost like just control the industry.

[00:22:22]>> Um that seems to be Elon's strategy as well here. Um so revenue it gives him the operating leverage to go and invest in all these other businesses that ultimately consolidate his differentiator and his competitive mode and then he that he so what he what because what he creates is a capital mode. So this money that build that accelerates a technology mode that then accelerates an execution and learning mode and then you just can't beat that flywheel. Can you speak a little bit to this flywheel because I think it's just so brilliant. Well, I mean, it it it really goes back to him thinking and executing on a multi-year horizon and the connect the connectivity, the the connective tissue between these things. Uh they're linked.

[00:23:10]You think about the supercharging network and all the upfront investment that was involved in building that over so many years or a US battery supply chain and and building that. Yes, it started with Panasonic cells, but over time the plan was, okay, we're going to start with we're going to start with level zero of the as we're going to do the pack assembly here and then then we're going to after pack assembly now we're going to start doing cell assembly here and then now we're going to develop our own batteries with 4680s.

[00:23:40]This is going to be with so with with so much electrification of things and and and now we're seeing huge battery installations now for AI data centers.

[00:23:50]which we're going to talk about in a bit that he is thinking again on a multi-deade horizon and he's figuring out what the bottleneck is well in advance of other people and he's making the big decision when the big decision needs to be made. And sometimes the timing doesn't always land perfectly.

[00:24:14]And sometimes what's obvious doesn't always happen.

[00:24:19]Like it I think it was obvious to him that more cars in the US should be electrified in, you know, 2026 than there are today.

[00:24:30]Well, there 5 to 7% of sales now are electric vehicles. He probably thought that that was going to be quadruple that or more and if not higher. So there are some things I think that are catching him uh offguard. But if you look back and you step back, you double click out one more say okay if it's not the US then it's globally. Well globally it's been the right it's been the right decision. So, the other thing I think people should keep in mind is when you're taking this many big swings at some of the biggest things in the world, things that haven't been invented, things that need to play out over a decade horizon or more, you're going to have some misses. And the misses will involve either complete miss or it's going to be a timing thing. But you have to step back and you have to think like, wow, is he really nailed a lot of these with whether it's the making EVs cool and then now making them high volume and then the Chinese copying it now what he's doing with Starlink and um internet connectivity and and what he's doing with SpaceX and now all these companies that are trying to copy and do rapid deployments. Um he's it history will look back very kindly on what he's doing today and like our current political landscape and he's made himself very political as well but it'll it'll be to still be this reality distortion field around it and and on the one hand there'll be like they'll over accentuate things that maybe shouldn't be over accentuated but mostly there's this distortion created around him of things not going well like the way these rocket launches are described Even though SpaceX has a plan for that launch, it gets described in a certain way by the Anyway. So, but the further you step back, just like the comment I made about his companies and the lines being blurred, the further you step back, you'll realize that maybe the the greatest innovator and business person of all time.

[00:26:28]>> Yeah. One of the questions I wish he would answer for me is like sometimes like u this idea that he would you would have this uh he would say something like here's the product and business we're in but then there's an actual real strategy behind it and and at current at the right timing it shows itself and uh and I always wanted to know did he plan that ahead of time or was he lucky and probably a little bit of both but he most often he planned it ahead of time.

[00:26:58]um Starling V3 massive capacity leap with this success of SpaceX uh 12th launch the Starship now they can launch these V3s and these V3 Starlinks is huge uh jump 10.7 times jump in you know capability than the old V2s more bandwidth more capacity more user serve more global connectivity so this is going to be a big jump and uh this is the V3 look much larger and better download capacity in not just 96 G gigabytes but a thousand gigabyte like like 10 times more. And then um Elon said this there will also ultimately be over 100,000 V3s, V4s, V5 satellites for Starlink broadband and direct to cell phone connectivity. If growth continues, Starlink will one day carry the majority of internet traffic. At that point, it is the internet and everything else just connects to Starlink. Look at that prediction he's making. It is going to replace the internet that we have now.

[00:28:05]>> Yeah.

[00:28:07]This is gets to the cost of connectivity and the capability of connectivity today. If if you want to go from 500 megabits to to one gigabit to your home, somebody's got to >> drill uh fiber into the ground and then route it to some location, some location >> then needs to be controlled. Uh and then there's central base stations need to be built and that needs to connect to somewhere else. And then there's all this money and people involved. And here this is everything's very centralized.

[00:28:41]satellite production. These things go up into orbit and then everything else from there is you just going and buying a terminal to connect to it. So, I've I've talked about this on X for a number of years. I don't know why the cellular operators aren't a little bit more concerned. And I know they're trying to partner with Elon on some of this as well, but this is I mean this could be very not only internet traffic, but all of communication traffic >> could be >> could be flowing here uh through this here at some point too. So the the performance continues to improve, the latency continues to improve, the bandwidth, uh the down link speed. I the this is this this is turning into from a oh this is a nice backup thing to have in case your internet goes out or if you're going on a trip and you want this connectivity. It's a great thing. Now it could turn into like well this why isn't this the primary thing? Um so it's it's remarkable. I think he almost knew way ahead of time 10 plus 20 years ago that one day there will be h you know robots everywhere. There will be autonomous transportation everywhere. He wants to have connectivity everywhere. Then of course he looks at and says okay the first principles is it has to go from the satellite down in order to get the cost down. you need to have, you know, reusable rockets and you have to have all this and >> and all these people that came out, all these these people that know absolutely nothing, by the way, that came out and said, "Oh, space-based data centers is another Elon thing that and all of a sudden the the real like the real operators, the real the people that are actually going to do it or fund it, Sundar Pachai, Jeff Bezos, multiple people are like, "No, this is going to happen. It's just a matter of schedule.

[00:30:34]Elon's doing an Elon time schedule where he's trying to get there as quickly as possible and motivate his teams. Uh, and but we're like this is going to happen.

[00:30:45]So now all this other ch like like carrot Swisser like all these people just I don't get it. Like it's just let me like you know these people that aren't in the arena. It's just a it's a fascinating thing of uh I don't know just wanting to to cr I mean you can be critical. There's a number of things to be critical of, but it's just interesting to as you're a watcher of this, whether you're an investor or you just like watching tech, watch what the real people do, the real capital allocators do and what they say versus people that are more emotional that are just kind of on the outskirts. I I was surprised um Sam Alman's you know him and him him questioning this but at the same time he's actually the word is is he's got a number of people that are actually looking into this and >> of course >> yeah all right uh so Elon knew and he's kind of communicated one of the issues with AI data centers is the the energy will be one of the major bottlenecks and uh yeah so here's Meta buying $200 million worth of Tesla's mega tech batteries to help power their AI data centers in Wyoming. Another example of Tesla energy becoming critical infrastructure for the AI boom. Nomos again, did he know this ahead of time when he started creating mega packs that AI data centers really need this or was AI data centers just came sooner than he thought or that he needed it for himself regardless, you know, it was just brilliance. I think he knew he knew ahead of time that this is where the go.

[00:32:19]I think he knew. Well, no. I I Well, me the mega pack business was built as a buffer between uh the the low generation of solar and the the low utilization of it because you know when it's dark and what have you. So, how can you get how can you increase the the utilization of that load generation? We'll store it the energy in batteries. I believe that's why the mega pack and power wall businesses were created and then there's this arbitrage capability with um the grid that is coming but I I believe that now I think they kind of stumbled into this thing with data centers and being able to >> and I think it's a real thing. I really do and I think most of the mega the hyperscalers are slow. I'm slow to adopt this but it's great to see what Meta is doing here and I think more of this is going to happen. Uh Tesla has the best uh battery overall battery product and they have the most amount of scale. I think uh EOS will have something that could scale more in the urban settings with their product. uh you know zinc halhallid based chemistry and there's a number of companies that are going to start trying to produce that chemistry as well because it's it's waterbased it's it's not flammable so we're going to need more of these in city urban developments but yeah I think it's it's fascinating to see that Elon started putting mega packs next uh Cortex and Col or yeah Colossus this was a couple years ago and it it does take a couple of years for it to kind of get through that cycle >> you're going to see all the other ones do it now because what why because you're going to take all that precious load generation whether it's natural gas whether it's these bloom bot whatever and you're going to be able to increase the utilization of it by storing that energy and you're going to have a cleaner cleaner source going into the data center very consistent >> so this is uh embridge and meta to build 365 megawatt 200 megawatt solar storage project and they're buying it from Tesla energy for the 200 megawatt uh megapac system and then huge huge business huge business for Tesla and I think this is one of the reasons they're going into longer duration storage with Houston and the mega block >> mega block. Yeah. Let's listen to what Kathy Wood is now saying about the AI boom >> at OpenAI. I'm going to give her a shout out because I heard her speak and she she was saying, you know, people are chasing GPUs. they they they're going to be really shocked at how Agentic AI activates CPUs uh and inference generally activates CPUs. Uh yesterday Lisa Sue uh provided a stat we had never heard before. Um right now for every um for every uh CPU there are four to five GPUs when it comes to enabling AI. Uh Lisa thinks it's going to go one to one in the future. I think that has been the sleeper and you see Intel has taken off.

[00:35:23]In fact, we're seeing a lot of stocks that were, you know, they were very big in the bubble. And I just said to our team today, I said, "What's going on?

[00:35:30]We're going back to the future." You know, Intel resurrecting. Yes. And Flextronics, it's now called Flex. Boom.

[00:35:36]>> Yep.

[00:35:38]Wow. This is it. Agentic AI. And then what's after agent? Physical AI. Elon, of course, partnered with uh Intel to create Terraab.

[00:35:48]Uh he's in the game. He'll be in this game. He's ahead of it.

[00:35:52]>> Yeah. and a lot she talked about Flextronics. So I've done a lot of business with and I I actually built >> a US factory together uh with them and done a lot of global business with them.

[00:36:04]People don't talk about this layer in AI data center. They everybody wants to talk about the chips. Everybody wants to talk about memory, but where do those chips and memory go once they're in a computer? Then they need to get racked up and those racks need to be wired and th those rack builds are being are happening by Flextronics, Foxcon um are doing them. Wistron, all the all the contract manufacturers that were the centerpiece and still are the centerpiece quite frankly to building smartphones are have set up different areas of their business with completely different people and some of the same people but uh to build out these data centers. So that's what she's talking about the return of these companies cuz that they were in very low margin contract manufacturing businesses and now with data center it's it's a much higher margin business because you're doing very complex integration of the cooling systems these rack builds the power integrate all these different things coming together and it's giving these opportun opportunity for these companies to innovate as well. So yeah it's a it's a fascinating time. Elon has been saying that the factory is the product and that the you know building products building hardware real you know not just software uh not SAS but actual physical products is going to be important and he's got 10 20 years of experience now he's creating everything from robots to cars computers >> there's no flexronics layer with Elon's companies yeah >> it's interesting thank you so much Jeeoff that was fun u I you know Elon one more thing. Steve Jobs, one more thing that is the the greatest uh entrepreneurs in the world, Jeff Bezos.

[00:37:49]They will pull something out of the hat.

[00:37:52]Thank you so much, Jeff. Follow him on his ex account, the Jeff Lots. Thanks, everybody.

[00:37:56]>> Thank you.

[00:37:56]>> I've created a website that is the most comprehensive resource for the Tesla investor. Please check it out. Simply go to my website at herbalm.com.