Elon Musk thinks it’s a good idea to merge Neuralink, Tesla, SpaceX, and the Boring Company by creating an Elon Musk Conglomerate called ‘X.’
In this article, I’ll discuss how this idea came to be, write a little about Neuralink and investing, and also Elon’s vision for the future of being a multi-planetary species.
For simplicity’s sake, let’s imagine Warren Buffett’s Berkshire Hathaway or Alphabet, the parent company of Google. Elon Musk responded to a tweet from Dave Lee suggesting he create a holding company that includes these companies and future endeavors. I’ve heard rumors about this possibility for as long as I can remember being interested in Tesla, but this tweet pretty much seals the deal on those rumors and stirs up the pot for more thinking about what this all means.
The holding company would probably be named ‘X’ and use the domain x.com.
Before diving into how this could affect Neuralink and others, I think it’s worthwhile to shed some light on the history for how x.com came to be part of Elon’s life. About 25 years ago, Elon Musk dropped out from pursuing his PhD at Stanford and started Zip2 with his brother Kimball. The service Zip2 provided was basically putting useful maps for businesses on the internet- imagine a simplified version of Google Maps.
Here’s a short clip of Kimball Musk from the Third Row podcast talking about Zip2:
After selling that company, Elon and Kimball started X.com, an online financial services and payments company. Right around that time, a company working on similar products released its biggest product called PayPal. The two companies fiercely competed and eventually merged together. Elon talks about that time here:
Pretty amazing timing by the team- Elon has had his fair share of close calls, especially when it comes to Tesla having practically zero dollars left in cash in 2008 and 2018, or SpaceX being able to barely squeak out their fourth launch.
I recommend watching the full three and half hour long interview with Elon and Kimball on the Third Row Podcast if you’re interested in learning more about Elon’s childhood, early startups, and his vision for the future.
Elon was clearly a fan of the name x.com as he felt it provided more flexibility for products that could be launched at PayPal. Since he liked the name so much, he was fortunately able to buy back the domain x.com from PayPal in 2017.
Soon after tweeting about it, he responded to a tweet from a Twitter user. Jonathan said, “I’ve got a cool idea- you can use X.com as an umbrella website to all your other companies.”
Elon responded, “That’s probably the best use.”
Fast-forward three and a half years to today and now Tesla is much more mature- in my opinion, it has a near zero chance of going bankrupt within the next two decades. SpaceX has demonstrated their ability to reach orbit and have reusable components of the rocket system with little refurbishment efforts.
Also, Boring Company has started digging tunnels in Las Vegas, primarily between the convention center, the strip, and the airport. Out of these three, the Boring Company is the least mature, but I predict in about a decade, Elon’s gonna be spending a greater percentage of his time working on Boring Company projects. The main reason I think this is that the Boring Company can use the tunneling approach on Mars.
The show Silicon Valley makes fun of new startups by joking that every new company has the mission of “making the world a better place.”
I find the show is funny because of how accurate most of the jokes are. For all of Elon’s companies, you could argue the mission is literally to do that- to make the world a better place. He does an excellent job of bridging the gap between ‘the world as it is’ and ‘the world as it should be.” Like I’ve said before, Elon is the world’s number one #SocietyImprovementGuru.
Within that overarching goal of improving society, it feels like Elon’s most motivating ambition is to make life multi-planetary. In order to do that, he’s focusing tons of his effort into making sure SpaceX is a success. SpaceX will enable transporting of humans to and from Mars. To further illustrate that Elon’s main reason to try and make more money is simply to make life multi-planetary, here’s a clip of Elon presenting more than four years ago.
The next logical step once humans establish a town on Mars is to have a ton of entrepreneurs. Everyone will need to start everything. I just saw an interview with Elon talking about how it’d be sweet to have someone build the first Italian restaurant on Mars.
I wonder what Mars food would taste like. For the entrepreneurs reading, maybe someone can start a restaurant on Earth that serves Mars cuisine!
Circling back to the Boring Company, I believe one of the main reasons Elon’s become so interested about digging tunnels is because of the potential to use this approach on Mars. Under the X holding company, SpaceX could provide the transportation to and from Mars, Boring Company could provide a means of transportation on Mars, Neuralink and Starlink could help people communicate extremely efficiently with each other on all planets, and Tesla could enable storage of wind energy. Also, why might the Tesla Cybertruck look and function as awesomely as it does? It’s gonna perform excellently on earth, but more excitingly, with a few modifications via a potential “Mars Package,” it’ll probably also perform excellently on Mars.
These aspirations are clearly not without challenges though. In addition to these challenges mentioned, humans will have to terraform Mars or change how we humans adapt to more extreme climates. This is what Max Hodak, the President of Neuralink recently tweeted about. He says:
“If the ISS has taught us anything, it is that space travel is terrible for the human body. As we expand out to the stars, it makes way more sense to adapt ourselves to the environment rather than try and make things hospitable for bodies evolved for Earth.”
Assuming humans would attempt to both adapt our own bodies and warm Mars up by nuking the planet or intentionally global warming the planet, Mars makes the most sense given its proximity to earth and distance from the sun. A day on Mars is 24 hours and 37 minutes and the tilt angle is 24̊ degrees compared to Earth’s 23.5̊ degree tilt. Humans can work with these features, but Mars is much colder- despite it getting up to 75̊F (24̊C) in some places, the average surface temperature on Mars is -81̊F (-63̊C). Also, gravity is 1/3rd as strong on Mars as on Earth. There are plenty of things we’d have to consider, so although I think a multiplanetary future with a company called X is possible, we probably won’t be working on developing a true city on Mars within the next decade.
I’m hopeful that Elon will start spending a greater percentage of his time focusing on Neuralink than on getting us to Mars or building Tesla. Neuralink is the youngest of all these companies and the one I’m most excited about. After watching tons of Elon interviews and getting a pretty good understanding of what problems he believes are most important, it wouldn’t surprise me if Neuralink got into the business of manufacturing prosthetics and also the business of genomics.
The team is currently working on helping minimize the effects of brain disorders like Alzheimer’s, dementia, or paralysis. Once the company matures, we as a society will have a way to merge our brains with computers and minimize the chance of artificially intelligent beings taking over. The potential this company has for being able to completely change how humans interact with technology is unparalleled. There are a handful of companies that play in the space of merging man with machine- namely Palantir, Facebook, Google, etc., but I haven’t found any company approaching the brain-computer interface tech in the way Neuralink has. Being able to have data not only at the palm of your hands, but practically instantaneously will unlock tons of opportunity. Think about humanity’s early progression from not having language, to being able to communicate and write things down to share knowledge. After that, the next evolutionary step was the invention of the computer. Computers and the internet have changed how efficiently humans can communicate, and now it’s time for Neuralink to change that again. Not only will humans be able to send and receive information to and from computers, but also to and from each other.
Also, from an investing perspective, I’m sure you’ve probably seen the nearly 2000% run up in Tesla stock over the past year and a half. Growing from a $30 billion dollar company to a $600 billion dollar one is pretty remarkable. Imagine what happens when you have a newer, younger company like Neuralink, that’s valued at around $1 billion to $2 billion and you pair that with extremely motivated founders, a passionate and intelligent team, and at least in the business sense, a slow-progressing industry. I know I’ll probably catch flack for this so I wanna be clear- I think the medical industry as a whole is wide-ranging with varying rates of progress. Most progress extremely quickly from a technology standpoint; however, because of regulation (which might justifiably be in place), progress can seem pretty slow. Again, I think Neuralink is set up for massive success.
As it stands, if you had any hopes of investing in Neuralink, I’m sorry to squash those hopes; it seems pretty unlikely Neuralink’s gonna go public any time soon. Elon’s historically been pretty against the hassle of being a public company, and if he really wants to, he probably could entirely self-fund the growth of Neuralink. I don’t think he actually will do that, so there probably will be access to some qualified purchasers or folks who invest in private companies, but I just don’t see it becoming a public company. If you happen to be a qualified purchaser or accredited investor and interested in investing in Neuralink, send me a note at firstname.lastname@example.org.
If you’re interested in the Starlink portion of SpaceX however, be patient and in several years, you might be able to buy that stock. In a tweet a few months ago, Elon said:
“We will probably IPO Starlink, but only several years in the future when revenue growth is smooth & predictable. Public market does *not* like erratic cash flow haha. I’m a huge fan of small retail investors. Will make sure they get top priority. You can hold me to it.”
He very recently reiterated this in a tweet saying:
“It will most likely make sense for Starlink to go public once the revenue growth is reasonably predictable.”
These companies are younger than Tesla and if you believe in their ability to make as much money + execute as well as Tesla has, there’d probably be less upside if Elon created an umbrella holding company called X.
So back to the original question: How sweet would it be for Elon Musk to merge Neuralink, Tesla, SpaceX, and the Boring Company by creating an Elon Musk Conglomerate? I think not that sweet at the moment. Once Neuralink and the Boring Company have made a little more progress and matured in their ability to break real ground, the holding company could make more sense.
I also want to add that although I too would want to participate in as much upside as possible with investments, I strongly believe Neuralink will make a pretty big impact regardless of these relatively minor details of corporate structure. Elon and the team have the interests of humanity in mind over anyone else, and I believe that is a fantastic thing.
I also don’t think this holding company will actually happen within the next five years, anyway, but at least Elon’s started laying the ground work for this type of transaction to occur: Tesla, SpaceX, and Neuralink are establishing a significant presence in Texas and Elon’s referred to Boca Chica, or more generally South Texas as the “gateway to Mars.”
Thanks reading. My name is Ryan Tanaka and this was the 24th episode of Neura Pod, so shoutout to the mamba: Kobe Bryant.
As a disclaimer, none of my content is financial advice. Investments are subject to risk and uncertainty and none of the things I’ve stated or written whether explicit or implied are advice for what investment actions you should make.
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