'Elon Musk' author Walter Isaacson on SpaceX IPO: We're seeing the beginning of a whole new economy

[00:00:00] Speaker 1: For more on this IPO, Elon Musk, SpaceX, and so much more, maybe a little historical perspective. Elon Musk's author, Walter Isaacson, of course, advisor, partner with Perella Weinberg. He's also Tulane University and a CNBC contributor. He's our expert, all things Elon. Put it in historical context for us. This is one of those major moments. For SpaceX, it's a major moment for Elon personally, but maybe it's a major moment for an era, if you will. I was thinking back, frankly, to 1929 when Henry Ford became our second billionaire, Walter. [00:00:38] Walter Isaacson: Well, yeah, it's not just that you're getting a new trillionaire, but you're getting a whole new economy here, which is a space economy. And the interesting thing about SpaceX is that it keeps discovering new ways to make money in space. I mean, nobody thought that a Starlink 10,000 satellites would recreate the internet in outer space. Now you are also going to get it direct to cell phones. Now, you know, who would have thought two years ago you would have been building data centers in outer space? But the new Starlink super satellites that he's going to be able to put up on this largest rocket ever made, Starship, will be able to put data centers in outer space. Who knows? We may have the mining of rare earth minerals at some point, or I guess we can't call them rare earth if they're not on earth. But I think what we're seeing is the beginning of a whole [00:01:32] Speaker 1: new economy, a space-based economy. And it appears that SpaceX has a massive lead, if not, is going to be the monopoly power, if you will, for at least some time in this space. I'm curious what you think of the valuation itself. Because, you know, when you talk to investors, a lot of them say, look, the math may not actually math out on paper. But Elon Musk is the math. He's been such a success over all these years. And just about everybody who's invested with him in the past, he has found a way to make money, even if he didn't plan to make money in a specific way. Originally, he then pivots and finds a way. That also creates a key man risk. But I'm curious how you think about that. [00:02:14] Walter Isaacson: Well, I definitely think he finds new ways to make money. And what you said at the very beginning is just awesomely important. I think at least 90 percent of all tonnage being sent up into orbit is being sent up on SpaceX rockets, especially the workhorse Falcon 9. But you're about to get starship online. Nothing's been bigger than that. So if you're putting 90 percent of all things into orbit, that means everybody else from the whole country of China, NASA, Boeing, you know, Blue Origin, everybody, they only have 10 percent. So you have a massive dominance of that market. You talk about the key man issue. Yeah. I mean, that's an issue for investors because Elon Musk is crazy. But as Steve Jobs said, it's the people who are crazy enough to think they can change the world are the ones who do. He's got a really good company. I was down in Starbase two weeks ago to watch the latest Starship launch. And I looked around that control room. I had all those people there. People have been in my book from Bill Reilly, Mark Genkosa. And of course, you've got Gwen Shotwell who's coming up in your show. But still, Elon Musk is the key person there. And he's everybody there, including Gwen Shotwell, will probably tell you he's the person with the vision. [00:03:43] Speaker 1: Morgan Brennan interviewed Gwen Shotwell. And one of the questions she asked her was whether we should expect a merger soon of SpaceX and Tesla. She suggested that it would make Elon's life a lot easier. We've talked about this before. But assuming this IPO goes off without a hitch and the stock is either at this price or goes up. You could easily do a stock for stock transaction and buy Tesla. My question is whether you think the Tesla board would accept the deal? What kind of premium, frankly, they'd have to pay for it? And how likely do you think this all is to take place? I think it's likely to take place. I think what you're [00:04:25] Walter Isaacson: having is two companies both doing AI each in its own way. And certainly it becomes far less confusing if you have it into one company. I love the Tesla board, but I suspect if Elon wants it strongly enough, they're likely to go along with it. And it makes total sense to me. At the moment, you have so much crossover happening. Even when I'm down at Starbase, there are all cyber trucks there. I mean, that's just a tiny thing. But you certainly see a company that, from optimist to robot to full self-driving to data centers in space, is going to be the connection of the physical real world to the AI world. [00:05:09] Speaker 1: Okay. So now let me ask you the big social question. Since you have studied the politics and policy of our country and the economics of it for a very, very long time, Elon is awesome in so many ways. He has created so many innovations. It's mind boggling to even think about him as one of the great Einsteins of our time. The concentration of power in the hands of one individual. What do you [00:05:36] Walter Isaacson: think of that? Well, it's obviously not great. You would hope there would be dozens of people being able to bring us into the era of electric vehicles and dozens of people bringing us into space. The problem is you do have other companies trying to do it. But Boeing is having trouble. We're not seeing great rockets come out of Rockwell or any other company. Blue Origin, I think, will catch up. But at the moment, it doesn't even have a launch pad at the Kennedy Space Center because it blew up. So what you're having is not somebody who illicitly figured out how to get a monopoly, but he's the only one being able to make these things work. And I would hope at some point, I mean, we have a great new NASA director with Jared Isaacman. And I hope at some point we have a lot of different companies who are going to be part of the space economy. It's not good to have one dominant [00:06:38] Speaker 1: player alone. Walter Isaacson, it is a big day for Elon. Let me ask you this, actually, before we let you go. What do you think he thinks of this day and this moment? [00:06:53] Walter Isaacson: You know, he's somebody whose emotional wiring is a little bit different from yours, Andrew, or mine. And I think it's almost like he feels like he's an avatar in his own video game and he's racking up points and he's about to hit a trillion. He's not thinking of himself as somebody with huge disparities of wealth where he gets to buy islands and yachts and do things. It's just he feels this is ever since he was reading. So, I mean, in my book, I talk about him sitting in the corner of bookstores as a friendless kid and reading sci-fi, reading X-Man comics, reading Hitchhiker's Guide to the Universe. And I think he sees himself as a player in a really amazing game and he succeeded.