Below you can read our live coverage of the first even appearance by Elen Musk on Silicon Valley’s hottest startup right now, Clubhouse.
In summary, Musk used the session to ‘talk to his base’ on topics ranging from space travel, colonies on Mars, and crypto. He managed to bust a few moths about his ‘alternative’ potions on several subjects, and at times managed to sound far more nuanced than his normally meme-propelled Twitter feed, which, it turns out, may just be him simply having fun with his followers, rather than taking serious positions. He almost seemed to be saying ‘I’m not the Messiah, I’m just another naughty boy…’.
In contrast to previous expositions on the viability of living on Mars, Musk didn’t portray a rose-colored vision. He said while worthwhile to keep humankind alive, life would be hard.
He ranged over a number of subjects from AI to the Covid-19 vaccine.
The last quarter of the interview then veered off radically when Vlad Tenev, CEO of Robinhood, was brought up to the stage (apparently by Musk, but there was a hint of co-ordination behind the scenes).
Suddenly, Musk turned interviewer and had Tenev unpack what had happened in the last with the Wall Street Bets debacle.
The Clubhouse room then turned into what some may call a massive PR stunt by A16Z, which is a big investor in Robinhood. With 5,000 people in the room, hundreds of journalists and live streams on YouTube for this hotly anticipated event, we got to see for ourselves, the much-heralded new media ‘empire’ of A16Z starting to unfold as it seeks to disintermediate journalists in the public discourse about technology.
Below is our semi-live blog of the session:
As I type this Elon Musk has joined Clubhouse for his first-ever in-person live session and the boundaries of the app have already been tested. Only 5,000 people are in the room, but this appears to be the limit of the app. As a result, Musk fans have thrown-up live Youtube and other streams of the session, live-streamed from here or here.
I am dusting off my creaky live-blogging skillz to cover the interview… and will update this post as we go (apologies for the appalling typos in the interim).
Musk initially talked about going to Mars and said it was likely to be “hard” for the early pioneers, but that the endeavor ultimately would be a matter of keeping the “candle of civilization alive in the dark”.
Asked if he believed in aliens, he said there wasn’t a single piece of conclusive evidence for the existence of aliens, although it’s “quite possible” there is such a thing as Alien technology, at least at a “7/11” level, and a joked that the evidence so far suggests they might be at the “500 Megapixel camera” or “at least iPhone 6 level”.
He said his kids were not quite into the idea of going to Mars.
Asked about memes online he quipped: “He who controls the memes controls the universe” and it’s about what “influences the zeitgeist”. Memes are a complex form of communication – unlike pictures, memes are “10,000 words not 1,000 words”. They are aspirationally funny. “I love memes, they can be very insightful” he said.
Does he try to sound crazy on Twitter? “I started crazy on Twitter,” he joked.
He doesn’t don’t follow them, but he says he has “meme dealers” – in other words, friends who clearly pick out memes they think he would like.
He talked about his company Neuralink and also added that Tesla had one of the strongest AI teams in the world.
With AI, it’s about “how do we stay relevant” and at least “stay ‘along for the ride’ in the good scenario” and couple our minds with AI to harness its power.
“People are already a cyborg.” We already have a tertiary layer in the form of smartphones. The bit-rate of us typing into a phone is 100 bits. So it’s like trying to talk to a tree, for our smartphones. So with a direct neural interface, we increase it by a huge magnitude, and also spend longer time with a higher magnitude of processing because of this.
You can decide if you want to be a robot or a person. But when you wake in the morning you wouldn’t have to be the same ‘mind’ as you were yesterday. It’s analogous to a video game, not unlike the “Altered Carbon” Netflix series.
There are primitive versions of this in the Neuralink idea, with tiny wires going into your brain.
He said they will be releasing new videos in a month or so, such as of a monkey playing videos with their mind. He didn’t appear to comment on the ethics behind this.
The value of the early implant will be enormous and outweigh the risks.
Moderator question: What should we educate a 5-year-old about in this world?
Musk talked about how video games engage children, but explaining “the why” was important. “We are programmed to forget the low “probability of things” if they aren’t relevant.
Such as, taking apart an engine and putting them together. We need tools, so we understand the relevance. It’s better than taking a “course on wrenches”.
He was asked “why are there not more Elon Musks”? “If you need encouraging words, don’t do a startup”.
A friend sent him a slice of cake using bitcoin in 2013. So “I should have bought it 8 years ago”. “At this point Bitcoin is a good thing. I am a supporter. I am late to the party, but I am a supporter.”
He said it was clear Bitcoin was getting broader acceptance by the financial world. “I don’t have a strong opinion on other currencies.”
Dogecoin, he said, was made as joke to make fun of cryptocurrencies, but “fate lives irony”.
“The most entertaining outcome is the most likely.” The most ironic outcome would be Dogecoin becoming the currency of the future.
He said he made a joke about bitcoin and his Twitter account got locked.
TESLA: They want to make 20 million cars and trucks per year as a target.
Autonomous driving could reach the point where you would rely on it for a significant amount of time in the a week. Autonomous cars would take over for roughly a third of the hours in a weeks, so 60 hours instead of 12, eventually.
Making sense of objects with technologies like Lidar would effectively make cars “superhuman”.
POST-PANDEMIC WORKING: Working remotely on Zoom has been tricky for him, he said, but remote working has not been perfect. “Fear is not the mind-killer, context switching the mind-killer” he said, of having to switch between disparate subjects on calls.
Would he start another company? He joked that he pretty much has his hands full with Tesla, Space X, The Boring Company and others to date.
He talked about the huge advances in vaccine technology, such as the MRNA tech which made the Covid-19 vaccine possible. He seems very bullish about the vaccine.
“There is going to be an avalanche of vaccine” coming he said. “I guarantee you ‘it’ will be thrown away this year.” He said the ‘CureVac’ vaccine will be approved soon.
He said “The Tesla machine can make a bazillion doses super fast.”
He made his poison clear on vaccines: “I am not an anti-vaxxer, I am a pro-vaxxer.”
Joining Silicon Valley in the early days he said he had to ask himself “Do I watch the internet being built in front of me or do I get involved?”
He was “too shy” to speak to anyone in the lobby of Netscape.
Then he tried to code. He wrote the first maps and directions on the internet. By hand. The Web site only worked during the night as he was using the server on the computer during the day to code.
Marc Andressen (on the clubhouse session) quipped that we would get a job the next time he hangs out in the lobby.
He’s been watching ‘The Last King’
for its historical accuracy and Cobra Kai.
The Expanse’s plot lines sometimes seem too fantastical to him, he said.
He was recommended ‘Devs’, Mythic Quest and Ravens Baquet by moderators.
Tenet was “pretty good”. Did he understand it? “If you think too hard about it, it’s not going to make complete sense, but it’s a good movie.”
His knowledge of the Hitch Hikers guide to the Galaxy, remains impressively intact.
“Vlad The Stock Impaler” was brought into the Clubhouse room to talk about the Game Stop phenomenon. It turned out this was the actual CEO of CEO of the Robinhood stocks trading app.
“Vlad” (or rather Vlad Tenev, CEO of Robinhood) began with an, at times, stumbling attempt to explain what happened last week but was eventually interrogated more thoroughly by Musk.
Musk turned interviewer:
“All right, tell is what really happened. Give us the inside scoop,” he said
“This has been a very surreal weekend and week for me,” said Vlad.
Vlad said “one of the really great things is all the people “coming out of the woodwork” to offer support for the company to offer advice.
He said this was his first time using Clubhouse. He then made a jokey remark about being an adherent to the “simulation hypothesis”.
Musk brought him back: “The people demand an answer and they want to know the truth.”
Vlad said: “So there’s an introducing broker-dealer called Robin Hood Financial, and that basically is the app that you know and love, it processes trades. You’re a customer of Robin Hood Financial. Then there’s a clearing broker-dealer, Robin Hood Securities, that clears and settles the trades. And then we have Robin Hood Crypto, which is our Crypto business… All of these are different entities that are differently operated. So, basically Wednesday of last week. We just had, you know, unprecedented volume, unprecedented load on the system. A lot of these, you know, so-called meme stocks were, you know, going viral on social media, and people were people are joining Robin Hood and there was a lot of net buy activity on them.”
He said Robin Hood became number one on the iOS App Store and pretty close if not number one on Google Play store.
“Thursday morning I’m sleeping. At 3:30am Pacific, our operations team receives a file from the NSCC, which is the National Securities Clearing Corporation. So, basically as a broker as a clearing broker. And this is where Robin Hood securities comes in. We have to put up money to the NSCC based on some factors including things like the volatility of the trading activity into certain securities. And this is is the equities business so it’s based on, stock trading and not options trading or anything else.
So, they give us a file with the deposit and the request was around $3 billion, which is, you know, about an order of magnitude more than what it typically is.”
MUSK: This is not an unprecedented increase in demand for capital. What formula that they use to calculate that”
Vlad: Just to give context, Robin Hood up until that point has raised around $2 billion in total venture capital. Up until now, so it’s a big number, like $3 billion is a large number, right. So, basically, the details are, we don’t have the full details, it’s a little bit of an opaque formula, but there’s a component called the VAR of it, which is value at risk. And that’s based on kind of some fairly quantitative things although it’s not fully transparent. So, there are ways to reverse engineer it, but it’s not kind of publicly shared.
And then there’s a special component, which is discretionary. So that kind of acts as a multiplier, and basically
MUSK: Discretionary meaning like it’s just their opinion”
VLAD: There’s definitely more, more than just their opinion.
MUSK: Everyone wants to know did something shady go down here? It seems weird that you get a sudden $3 billion demand, you know, at 3.30am in the morning. Just suddenly out of nowhere.
VLAD: I wouldn’t impute shadiness to it or anything like that and actually you know the NSPCC was reasonable.
They worked with us to actually lower it. So, it wasn’t unprecedented activity. I don’t have the full context about, you know, what was going on in the NSCCC make these calculations.
MUSK: Is anyone holding your hostage right now?
Vlad: Thanks for asking. But anyways, so this was obviously nerve-racking, and I actually was asleep at this point, you know, the operations team was fielding this at three o’clock. And then, you know, we got back, we put our heads together. Our Chief Operating Officer basically said, look, let’s call up the higher-ups at the NSCC and kind of figure out what’s going on. Maybe there’s some way we can work with them. And basically, there was another call. And they lowered it to something like $1.4 billion from three…. But still a high number.
Vlad said the team then proposed how to manage the risk through the day “marking these volatiles stocks that were driving the activity, positioning closing only. And then, at about an hour before the market closed market opened. So, at 5.30, or five in the morning, they [the NSCC] came back and they said okay, the deposit [should be] 700 million, which we then deposited and paid promptly. And then, everything was fine.
So, that that essentially explains why we had to mark the symbols ‘position closing only’, and also why, you know, we knew this was a bad outcome for customers… Part of what’s been really difficult is Robinhood stands for, you know, democratizing access to stocks and, yes, we want, we want to give people access so we had no choice in this case, we had to conform to our regulatory capital requirements. And so the team did what they could to make sure we were available for customers.
MUSK: Who controls the clearinghouse?
Vlad: It’s a consortium. It’s not quite a government agency. You know, I, I don’t really know the details all that. But, you know, and to be fair… there was legitimate turmoil in the markets. These are unprecedented events with these meme stocks, there was a lot of activity. So, there probably is some amount of extra risk in the system that warrants, higher requirements, so it’s not entirely unreasonable.
But we did operational processes to make sure that customers that had positions could sell their open positions because obviously restricting someone…We got a lot of questions about ‘you had to restrict buying, why didn’t you also restrict selling?’ And the fact of the matter is, people get really pissed-off if they’re holding stock and they want to sell it and they can’t. So that’s categorically worse. Lots of other brokers, I think, we’re in the same situation. Robinhood who was in the news, but you just sort of heard this industry-wide, other brokers, were basically restricted in the same exact activity.
MUSK: So it sounds like this organization calls you up and they basically have a gun to your head. Either you put up this money or else. Basically, what people are wondering is did you sell your clients down the river? Or did you have no choice? And if you had no choice that’s understandable. But then, you know, we’ve got to find out why you have no choice. And who are the people that are saying you have no choice?
VLAD: I think that’s fair. We have to comply with these requirements, financial institutions have requirements. The formula, behind these requirements… it would obviously be ideal if there was a little bit more transparency so we could plan better around that, but to be fair, we were able to open and serve our customers and 24 hours later, our team raised over a billion dollars in capital so that when we do open tomorrow morning we’ll be able to, kind of, relax the stringent position limits that we put on these securities on Friday.
MUSK: Will there be any limits?
VLAD: Well I think there’s always going to be some theoretical limit, we don’t have infinite capital, right? And on Friday, there were limits. So, there’s always going to have to be some limit, I think the question is, will the limits be high enough to the point where they won’t impact 99.9-plus percent of customers. So if someone were to deposit $100 billion and decide to trade in one stock that wouldn’t be possible.
MUSK: If you had no choice then you had no choice. It’s a ‘gun to the head situation’. That’s understandable.
VLAD: Yeah, these are unprecedented times, and to be fair to those guys they’ve been reasonable. So, I think the one thing that is maybe not clear to people is Robinhood is a participant in the financial system. So we have to work with all of these counter-parties, so we do get a lot of questions about, you know, ‘why do you work with market makers?’, why you work with clearinghouses. Vertically integrating… I mean it’s hard enough to build an introducing… clearing broker-dealer… not too many people have done that. But the financial system that allows customers to trade shares is sort of a complex web of multiple parties… Everyone says it could be better. It could be improved. It’s just the necessity of trading equities in the US, that you have to do all these things.
MUSK: To what degree are you beholden to Citadel?
VLAD: There was a rumor that Citadel or other market makers kind of pressured us into doing this and that’s just false. Market makers execute our trades, they execute trades of every broker-dealer. This was a clearinghouse decision, and it was just based on the capital requirements. So, from our perspective, you know, Citadel and other market makers weren’t involved in that.
MUSK: But wouldn’t they have a strong say on who got put in charge of that organization, since it’s an industry consortium, not a government regulatory agency?
VLADL I don’t have any reason to believe that. I think that’s just like, you know, then you’re getting into kind of the conspiracy theories a little bit. So, I just have no reason to believe that that’s the case, you know.
Musk: Okay. Well, I guess we’ll see what happens with directions. Hopefully, that was insightful or at least a little bit entertaining. “Are you not entertaining?” he said. [Apparently a reference to the movie ‘Gladiator’]
The moderators then thank Musk and Vlad for coming on Clubhouse.
Musk said he didn’t know clubhouse existed uptime a week ago.
The moderators wrapped up the session and closed out by playing “Starman” by David Bowie…
Read the original post: Elon Musk busts Clubhouse limit, fans stream to YouTube, he switches to interviewing Robinhood CEO
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