SpaceX Financials, Does AI Increase Unemployment or Leisure, Chimp Civil War | Diet TBPN

0:01John Coogan:The news on Artemis II is exciting. Today is splashdown day if you've been tracking it. It's been over a full week at this point. It's 13 minutes of things that have to go right, NASA said, of re-entry and splashdown with the first astronauts from the moon in over 50 years. After an epic trip to the moon and back, it's landing day for the four astronauts of NASA's Artemis II mission. For the first time in over 53 years, astronauts are returning to Earth from the moon. A fiery 13-minute plunge through Earth's atmosphere at about 24 ,000 miles an hour will subject them to degrees and temperatures of up to 5 ,000 degrees Fahrenheit with only their heat shield for protection.

0:43John Coogan:It feels fast. It feels like they just left. Yeah, it does. So if you're looking to actually track the mission, the Artemis II Orion capsule will return to Earth tonight, April 10th at 8 p.m. Eastern, 5 p.m., 5.07 Pacific. Splashdown is in the Pacific Ocean off the coast of San Diego, not far from here. Returning home on the ship to end a 10-day trip to the moon are the NASA astronauts who we followed. And they seem very, very happy. They just woke up for landing day. What is the exact splashdown time? 5.07 p.m. Pacific. Yes. We'll be tracking that. In other space news, SpaceX has some financials going out in the information.

1:27John Coogan:today. SpaceX posted nearly$5 billion loss last year from AI spending. Well, but they generated $18.5 billion in revenue to people familiar with the figure said this is from Corey Weinberg in the information. The financial figures include XAI, the Elon Musk founded artificial intelligence company that SpaceX acquired in February, the net loss as well as other financial figures that consolidate SpaceX and XAI's performance haven't been previously reported, but now they are here. Yeah, I think everyone was expecting this. SpaceX, very profitable company, acquires a very unprofitable company combined.

2:03John Coogan:But new opportunity and all in the pursuit of vertical integration. And so SpaceX has closely guarded its financials as it prepares for what will likely be the largest IPO of all time. The loss figure shows that investors who participate in the IPO will essentially be financing Musk's unproven AI ambitions in order to get a piece of high performing commercial space and telecom firm. But that's sort of been the Tesla model for a long time. Elon has always had multiple irons in the fire, one project that's working and producing cash flow and growing to finance the next piece of innovation. Ashley Vance has an interesting deep dive on the Tesla semi-truck factory.

2:43John Coogan:he went and saw it rolling off the factory line, which was one of those projects that has been rumored for a very long time, announced a very long time ago, but seems to be getting off the ground. Tesla has spent heavily on chips and data centers to power XAI with capital expenditures for the division nearing 13 billion, so lots of CapEx. That was 50 % more capital spending than the rocket and satellite divisions combined. It is crazy how quickly you can spend a lot of money on a data center versus, you know, you'd think a satellite manufacturing facility or a rocket manufacturing facility would be the most expensive thing, but it is in fact not.

3:20John Coogan:Yeah. What's that other, what's the company that Delian backed? The satellite bus company in... I'm forgetting the name of it, but like wildly profitable. Yeah. It's been pretty astonishing to see space companies, which you would just assume would lose money indefinitely actually figuring out ways. Was it Endurosat. Endurosat. Yeah, Endurosat. And when we talked to the founder of Endurosat, it did sound like there was a lot of really important manufacturing, but it wasn't at the level of buying tools from ASML and spending$100 million on a single machine. I think ASML's lithography machines are up to like$400 million, and there's a huge backlog.

4:01John Coogan:So the chip expenditures can get really, really high. SpaceX's core business of selling rocket launch services to governments in companies, as well as selling its own Starlink satellite internet services, together generated nearly$8 billion in earnings before interest taxes, depreciation, and amortization and stock-based compensation in 2025. So$8 billion in EBITDA, that is a fantastic number for SpaceX, a very, very solidly profitable business there at the core. The two space-related divisions are intertwined, with most SpaceX launches of its Falcon 9 launches carrying Starlink satellites rather than other companies' payloads.

4:38John Coogan:And I saw another piece about how there's still way more demand than supply just in the launch market broadly. A lot of companies have spun up with big plans to put things into orbit. We talked to a founder yesterday who's doing a new GPS system in low-Earth orbit. And so there's a lot of demand for launch. and Elon and the rest of the space industry seemingly can't make rockets fast enough. I'm excited to talk to Jason Kim of Firefly Aerospace about the launch market broadly going to the moon and what else Jason has planned in the orbital economy, the lunar economy, the space economy. Overall, including its AI division, the company generated just over$6.5 billion in adjusted EBITDA.

5:25John Coogan:SpaceX's depreciation of chips, rockets, and satellites was among the largest expense, topping$6.6 billion. Other large costs were stock-based comp and interest expense, which neared$2 billion. For SpaceX Bulls, the company's allure is its dominance in the commercial space market, where it sends by far the most payloads into space, lapping competitors. Although we've seen some good stuff out of Rocket Lab and also Blue Origin recently, but there's no question that SpaceX has a dominant hold on the launch market. That could further its ability to catch up in the AI race in the coming years if it can bring down the cost of launching solar-powered data centers into orbit, as Musk has said he wants to do.

6:02John Coogan:SpaceX is hosting investor meetings this month and sending invitations to a two-day IPO pitch, a sales pitch in southern Texas and Tennessee where it launches its new rocket and is building data centers, respectively. In February, Musk orchestrated the merger of SpaceX, his crown jewel, and XAI, the AI model company he founded to rival OpenAI. The combined company is planning to go public in June, which will be a very, very exciting time for the market and we'll be covering it, of course, on the show. There's more back and forth about XAI. David Sachs is happy that XAI is the first AI company to challenge Colorado law requiring it to censor truthful answers if they could have a differential impact on protected groups.

6:44John Coogan:He wants the First Amendment to apply to AI, and so Sachs has written about this and talked about it on the All In podcast. In other XAI news, XAI approached Black Forest Labs about licensing its AI image technology in recent months, but the startup declined, Wired has learned from Max Zeff. The company's had a similar deal back in 2024, but Black Forest Labs is now trying to focus on training AI models to power robots and smart glasses. That's very interesting. So it appears that Black Forest Labs was sort of serving as like the mid-journey to the meta vibes, powering that first Grok Imagine mode.

7:20John Coogan:But maybe there was a consideration of, well, if you're going to be working with this company, but also in competition with them because they're training new models, maybe you want to go and carve out a separate niche that's more defensible. Also, Elon had shared, I think, earlier this week or late last week that they're training a new version of Imagine in Colossus 2. Yeah, exactly. Black Forest Labs has 70 people and is taking on Silicon Valley's giants. And this is from the Human X conference in San Francisco. It's in Wired. You can go and read it. Max Zeff has the report. Alex Tabarrok had an interesting debate around the unemployment rate and how things might shape up with AI developments.

8:06John Coogan:He writes, AI, unemployment, and work, trying to square different efficiency gains and how this might impact the economy and the future of work. So he says, imagine I told you that AI was going to create a 40 % unemployment rate. Sounds bad, right? Catastrophic even. And I agree, that would be completely unprecedented. We really have never had more than 10 % unemployment for any sustained period of time. Yeah, Great Depression was something around 30%. Yeah, it did get high, but in the modern era, even during COVID. I mean, brief spikes above 10, but in general. Yeah, so I'm saying like worst it's ever been.

8:49Yeah, this would be bad.

8:50John Coogan:So then he says, now imagine I told you that AI was going to create a three-day work week. That sounds great, right? Wonderful even. Yet to a first approximation, these are the same thing. 60 % of people employed and 40 % unemployed is the same number of working hours as 100 % employed at 60 % of the hours. So even if you think AI is going to have a tremendous effect on work, the difference between catastrophe and wonderland boils down to distribution. It is not impossible that AI renders some people unemployable, but that position is harder to defend than the idea that AI will be broadly productive.

9:27John Coogan:AI is a very general purpose technology, one likely to make many people more productive, including many people with fewer skills. Moreover, we have more policy control over the distribution of work than over the pure AI effect on work. Declare an AI dividend and create some more holidays, for example, this would naturally have that effect. So you could just have more bank holidays, more government holidays, and sort of ramp towards a lower, like a shorter work week, essentially. Nor is this argument purely theoretical. So he shares some historical facts here. Between 1870 and today, hours of work in the United States fell by about 40 percent, from nearly 3 ,000 hours per year to about 1 ,800 hours.

10:13John Coogan:Hours fell, but employment did not increase. Moreover, not only did work hours fall, but childhood, retirement, and life expectancy all increased. In fact, in 1870, about 30 % of the person's entire life was spent working. People worked, slept, and died. Today, it's closer to about 10%. That feels very low, but when you think about it, you know, if you're working 40 hours a week and there's, what is it, 160 hours in a week? 24 times 7? Can I do that in my head? Oops. What is it? I typed the wrong number. It's 168. Yeah. So 40 divided by 1. Never do mental math while podcasting. So 24 % of just a normal work week is spent working if you're working a 40-hour week.

11:01John Coogan:And then, of course, you don't work until you're 18, roughly, maybe 20. Right. And then you have college. And then retirement. And so that pushes it down to something like 10 % on average, according to this report. What do you think? I mean, doesn't this still depend on how many days you have in a week, right? Because, like, I have more days in my day, right? Oh, yes, yes, because you've manipulated time. Yes. Yeah, yes. What time did you wake up today? 4 a.m.? 3 a.m.? Yeah, 1 a.m. 2 a.m.? 1 to 5 is my first day. Yeah. And then I go to sleep, and then, like, 5 to 10 is my second day. Yeah. And so on, you know.

11:31John Coogan:The real trick is just waking up so early that you're waking up at noon the day before. So if you wake up at noon Sunday and start your Monday, then you're just way ahead of everyone. People are waking up at 4 a.m. You're up at noon the day before. You're good to go. And then you need to go to sleep at like. They don't want you to know this. They don't want you to know this. Rick Ross talks about this. Yes. Thus, in the past 100 years or so, the amount of work in a person's lifetime has fallen by about two thirds. And the amount of leisure, including retirement, has increased. We have already sustained a massive increase in leisure.

12:06John Coogan:There's no reason we cannot do it again. I like this. It's a bit of a white pill. There's a lot of fear about unemployment, and this is sort of a different path. It might require government intervention. It might require a new social contract or just new holiday creation from the government, but it certainly seems possible. There's some reactions to this. Alex is more correct than incorrect, but he glosses over an important caveat. The difference between catastrophe and wonderland boils down to distribution. It's not impossible that AI renders some people unemployable. If there's one thing we've learned over the past decades is that even welfare-improving changes such as increases in international trade and technological progress do result in distributional effects, even often severe ones like Rust Belt cities and deaths of despair.

12:47John Coogan:It's not all nice Milo minder binder where everyone gets a share. Or to put it another way, Schumpter's creative destruction still involves destruction. And so people are going back and forth on this. But it does set one perspective on a positive outcome. Fact-checking myself, the most commonly cited peak U.S. unemployment rate during the Great Depression was 24.9%. I thought it had gotten got up to the 30s. Well, there's a fun article in the Wall Street Journal, a very bizarre article about a deadly civil war that tore apart a group of chimpanzees in Uganda. Not exactly a fun article, but it's gripped everyone and everyone is wondering what is going on here with these monkeys.

13:31John Coogan:A chimp group's success may have led to its violent downfall, a new study suggests. Slow news week. Very slow news week. Slow news week when the Wall Street Journal is reporting on a deadly civil war among chimpanzees. It's just a crazy thing. I don't think many people knew that this was even possible. But let's read through it and try and understand what's going on. A rare and deadly civil war has broken out between two factions of chimps in Africa. According to new research, the dispute erupted in what was once a cohesive group of about 200 chimps whose ties stretch back two decades. It just took three years for them to turn on each other, according to a new study in the Journal of Science.

14:15John Coogan:We've known for a long time that chimpanzees will attack and kill their neighbors, said primatologist John Mitanni. professor emeritus at the University of Michigan, and a study co-author. It turns out they will do this even when those neighbors are former friends and allies. So I'm just reading this from the lens of the technology industry. Yes, many, many cases. This is potentially a metaphor. For 20 years, the chimps of Uganda's Kabale National Park were living the good life by being together, Mitanni said they helped one another dominated and killed apes from neighboring groups expanded their territory and boosted their babies chances of survival but in 2015 the group started splitting into two clusters several male chimps who had bridged cliques within the larger group died from disease weakening social ties around the same time a new alpha male rose to dominance changes in the dominance hierarchy can fuel more aggression and tension said Aaron Sandell an associate professor of anthropology at the University of Texas at Austin and study co-author as aggression escalated, the factions drifted into separate areas of the park.

15:21John Coogan:By 2018, the split was complete. This is, it's interesting, it took like 10 years to do this full study, but by 2018, the study was complete. The two groups had no remaining social or reproductive ties between them. The last chimp infant with parents from different groups was born in 2015. What was once the center of the group's territory became a border which chimps patrolled, the researchers found. Then the hostilities began in earnest. Members of the smaller group of the two groups launched coordinated lethal attacks on the other, aiming to kill rival adult males. By 2021, these raids have expanded to target younger apes, averaging several infant deaths a year ago.

16:02John Coogan:So since a year since. And there's a video here of the encounter between these two rival groups, and they're fighting it out. So more than 24 apes have died as a result of the conflict. That's horrible. The true death toll is probably higher given that so many chimps, there are so many chimps in a large area, some deaths go unrecorded. Primatologist Jane Goodall observed what may have been a similar split. But sorry to jump in, but you know, this group of apes has been being, has been studied for sounds like over 10 years now. At any point did they think like, hey, let's break it up? I don't know.

16:39Is that is the ethical thing to do to let them continue to fight? Yeah. At what point do you step in? How many how many apes, how many chimps need to die before? Hey, let's stop the research project. And yeah, you know, step in.

16:52John Coogan:I don't know. It's an important question. We may have an assignment for you this weekend. I think you need to hop on a plane. Let's see if there's any more about this. I mean, there is, you know, like for a lot of these studies observation you want to be hands-off and not putting your finger on the scale I guess but number one number one comment put any 200 humans together and the same thing will happen and you only need 20 humans if it's an HOA it's a little it's a little uh Stanley Milgram prison experiment vibes it's very uh I think it's very Girardian right because you have the two warring groups yeah memetic rivalry right they're exactly like each other yeah you got to fight it out and yeah and you have the scapegoat and yeah yeah yeah that's true primatologist Jane Goodall observed what may have been a similar split in subsequent violence among chimpanzees in Tanzania in the 1970s, but the findings have long been debated because most of the observations were in an area where humans regularly fed the chimps, altering group makeup, size, and aggression.

17:49John Coogan:So maybe you should be feeding and the monkeys to keep them happy, I guess, or the chimpanzees. With these chimps, researchers aren't certain what prompted the split, but said it's possible the apes were victims of their own success. The group grew large and even though resources were abundant the chimps may have perceived increased competition for food and mates. The once smaller of the two chimp groups is now the larger one because its members have killed so many rivals. They observed more lethal attacks. It's an ongoing conflict they said and the conversation is ongoing. I think actually like this does make sense that it got too big right because you have this idea of Dunbar's number.

18:28So you have 150 people. The group of chimpanzees gets above 150. It's at like 200. And then you have the kind of war start. The calling? Because you can't know everyone, right? Chimps can't know each other.

18:37John Coogan:Would Dunbar number be the same for chimpanzees as humans? I wonder if anyone's ever studied that. I mean, you assume that there's some lineage there that it stays relatively similar. Yeah, Jane Goodall passed away last year and had an obituary in the Wall Street Journal that was very interesting. I think we touched on it briefly, but we can go through a little bit more of it. Jane Goodall always remembered the first time a wild chimpanzee took a banana from her outstretched hand. In that moment, she would often say the chimp. A grizzled male she had dubbed David Graybeard welcomed her into a community of humanity's closest living relatives.

19:11John Coogan:It opened a relationship with wildlings that in due course upended scientific misconceptions about chimpanzees and turned her into a global icon of conservation. As an untrained young woman in the summer of 1960, she first ventured into the forest of what is now Gombe National Park. Equipped with little more than a notebook, a pair of binoculars, and almost infinite patience for five months, though, the wary creatures evaded her, if, in fact, no one had ever been able to study them at close hand. By winning Greybird's trust, she gained entry to the troop of wild chimps that became the focus of her life's work.

19:46John Coogan:The chimps had accepted me, and gradually I was able to penetrate further and further into a magic world that no human had ever explored before. The world of the wild chimpanzees. She died of natural causes in California last year. John. Yes. Why is no one talking about Ferrari? Because the good folks over at the choir. Ben Gilbert and David Rosenthal are in the Wall Street Journal today. They are. writing about why Ferrari is unlike any other luxury brand, according to the hosts of Acquired. They say the business of Ferrari looks simple. Make fast cars and not too many of them. On the surface, this strategy of scarcity and tantalizing exclusivity seems remarkably similar to the classic playbook of other storied luxury brands, as if Ferrari's cars are just Hermes bags and Rolex watches on four wheels.

20:35But Ferrari has something that Hermes and Rolex could never cultivate. Hordes of screaming fans who worship the brand from the time they can say vroom vroom. Few teenagers hang posters of Birkin bags in their bedroom, but droves of them have the sight of F40s and Testarosses seared into their brains long before they can get behind the wheel. Despite selling a grand total of 330 ,000 cars.

20:54John Coogan:So they have more than 400 million fans worldwide. And no company has a higher ratio of people who know about its products to people who actually own those products. Far from cheapening the brand, Ferrari's rabid base of superfans only enhances the brand's appeal to clients who can afford to pay millions of dollars for a car they will rarely drive. Just to put the 330 ,000 lifetime sales into context, Ford sold 2.2 million vehicles just in the United States last year. Last year. Wow. And that 330 ,000 is global over the lifetime. Yeah. When Enzo Ferrari established his eponymous company in 1947, wow, creating a luxury brand was the furthest thing from his mind.

21:38John Coogan:He was obsessed with building the world's fastest cars to conquer the booming world of auto racing. To do that, he also built a clever business model. Like many of his rivals, he built cars for his own racing team and sold them on the side. Unlike Mercedes and Ford, whose racing garages and consumer car factories might as well have been located on different planets, the same Ferrari employees in the hills of Marinello, Italy, built substantially the same cars, whether they were selling them to customers or racing them at Le Mans. The model created a beautiful feedback loop. Scuderia Ferrari's success in Grand Prix races stoked greater awareness and desire for private client road cars, the profits from those clients.

22:16John Coogan:Sales fueled the research and development that turbocharged La Scuderia's performance back on the track. It was a fantastic strategy through the 1950s and 60s, filled with F1 championships and notable clients. But by the time Enzo died in 1988, the business was struggling. After a 50 % sale of the company to Fiat in 1969, Ferrari was losing money and furloughing workers due to a misguided strategy of overproduction. Even more unfathomable today is that the cars were just sitting there at the dealerships waiting to be sold. Can you imagine Ferraris that you could drive off the lot? Yeah, that is not the case today.

22:51John Coogan:The company's future was very much in doubt when it found a savior in Enzo's one-time protege, a blue-eyed Italian aristocrat with a steady hand to pull off a U-turn at Ferrari. Fifteen years earlier, he was the young Ferrari team manager who had engineered the prancing horse's last run of Formula One dominance. To the Trifosi in their unmistakable Ferrari Red, he was so popular that he could have run for president of Italy. He left Ferrari in 1977 rising to chief executive of a drinks company and organizing the 1990 World Cup in Italy. He traveled the world and mingled with the elite by the time Fiat Scion Gianni Agnelli brought him back to Marinello as chairman and gave him a specific mandate, rescue Ferrari by any means necessary.

23:37John Coogan:So the visionary saw immense potential lying in the wreckage of Ferrari's road car business. Instead of positioning the product as a domesticated race car, he realized that this was Ferrari's chance to sell something less tangible, but infinitely more valuable. the fulfillment of every fan's childhood dreams. Rather than driving off a lot, clients could fly to Italy and take their cars out for a rip around the test track that Michael Schumacher practiced on the day before. The interiors would be made of leather that rivaled Pradas. Unlike Ferrari's untamed best beasts of old, you could enjoy driving them somewhat regularly without fear of breaking down on the way to the store.

24:13John Coogan:The engines could still rocket drivers to 200 miles an hour on a moment's notice, but now they would be signed by the craftspeople who made them. By pursuing the counterintuitive strategy, he transformed Ferrari into a new kind of company like Hermes smashed together with Manchester United. Other luxury brands manufactured desire through scarcity. Other sports teams benefit from shared emotional attachments. Ferrari does both. It breeds a mass fandom that somehow makes the company's most exclusive product even more valuable. By 1997, the business had returned to meaningful profitability for the first time in years, despite making fewer cars.

24:50John Coogan:He slashed production from 4 ,561 cars when he arrived to just 2 ,289 two years later. Once he put his strategy in motion, Ferraris were no longer sitting around like Fords. Suddenly, there was a waiting list to buy them. In the decades since then, it has become clear that his innovation dug a moat around the company that no competitor has been able to cross. To this day, other racing teams may pass Ferrari on the track, and other car makers may challenge Ferrari on the road, but no business can offer luxury, maniacal freedom, and nearly a century of unbroken sporting heritage all rolled into a product that's rarely seen, but instantly recognizable on any street in the world.