Schlagwort-Archive: Elon Musk

Elon Musk’s challenge: Stay ahead of the competition

DETROIT, Feb 24 (Source: – Elon Musk will confront a critical challenge during Tesla’s Investor Day on March 1: Convincing investors that even though rivals are catching up, the electric-vehicle pioneer can make another leap forward to widen its lead.

Tesla Inc (TSLA.O) was the No. 1 EV maker worldwide in 2022, but China’s BYD (002594.SZ) and others are closing the gap fast, according to a Reuters analysis of global and regional EV sales data provided by

In fact, BYD passed Tesla in EV sales last year in the Asia-Pacific region, while the Volkswagen Group (VOWG_p.DE) has been the EV leader in Europe since 2020.

While Tesla narrowed VW’s lead in Europe, the U.S. automaker surrendered ground in Asia-Pacific as well as its home market as the competition heats up.

Reuters Graphics
Reuters Graphics

The most significant challenges to Tesla are coming from established automakers and a group of Chinese EV manufacturers. Several U.S. EV startups that hoped to ride Tesla’s coattails are struggling, including luxury EV maker Lucid (LCID.O), whose shares plunged 16% on Thursday after disappointing sales and financial results.

Over the next two years, rivals including General Motors Co (GM.N), Ford Motor Co (F.N), Mercedes-Benz (MBGn.DE), Hyundai Motor (005380.KS) and VW will unleash scores of new electric vehicles, from a Chevrolet priced below $30,000 to luxury sedans and SUVs that top $100,000.

On Wednesday, Mercedes used Silicon Valley as the backdrop for a lengthy presentation on how Mercedes models of the near-future will immerse their owners in rich streams of entertainment and productivity content, delivered through „hyperscreens“ that stretch across the dashboard and make the rectangular screens in Teslas look quaint. Executives also emphasized that only Mercedes has an advanced, Level 3 partially automated driving system approved for use in Germany, with approval pending in California.

In China, Tesla has had to cut prices on its best-selling models under growing pressure from domestic Chinese manufacturers including BYD, Geely Automobile’s (0175.HK) Zeekr brand and Nio (9866.HK).

China’s EV makers could get another boost if Chinese battery maker CATL (300750.SZ) follows through on plans to heavily discount batteries used in their vehicles.

Musk has said he will use the March 1 event to outline his „Master Plan Part 3“ for Tesla.

In the nearly seven years since Musk published his „Master Plan Part Deux“ in July 2016, Tesla pulled ahead of established automakers and EV startups in most important areas of electric vehicle design, digital features and manufacturing.

Tesla’s vehicles offered features, such as the ability to navigate into a parking space or make rude sounds, that other vehicles lacked.

Tesla’s then-novel vertically integrated battery and vehicle production machine helped achieve higher profit margins than most established automakers – even as bigger rivals lost money on their EVs.

Fast-forward to today, and Tesla’s „Full Self Driving Beta“ automated driving is still classified by the company and federal regulators as a „Level 2“ driver assistance system that requires the human motorist to be ready to take control at all times. Such systems are common in the industry.

Tesla earlier this month was compelled by federal regulators to revise its FSD software under a recall order.

Tesla has established a wide lead over its rivals in manufacturing technology – an area where it was struggling when Musk put forward the last installment of his „Master Plan.“

Now, rivals are copying the company’s production technology, buying some of the same equipment Tesla uses. IDRA, the Italian company that builds huge presses to form large one-piece castings that are the building blocks of Tesla vehicles, said it is now getting orders from other automakers.

Musk has told investors that Tesla can keep its lead in EV manufacturing costs. The company has promised investors that on March 1 they „will be able to see our most advanced production line“ in Austin, Texas.

„Manufacturing technology will be our most important long-term strength,” Musk told analysts in January. Asked if Tesla could make money on a vehicle that sold in the United States for $25,000 to $30,000 – the EV industry’s Holy Grail – Musk was coy.

„I’d probably be asking the same question,“ he said. „But we would be jumping the gun on future announcements.“



Tesla’s Problems Go Way Beyond Elon Musk

The EV giant is alienating its customers, bringing in less revenue, and falling behind legacy carmakers.
Rain and the reflection of a bare tree on the hood of a black Tesla car
Photograph: David Gannon/Getty Images

For now, Alex Lagetko is holding on to his Tesla stocks. The founder of hedge fund VSO Capital Management in New York, Lagetko says his stake in the company was worth $46 million in November 2021, when shares in the electric carmaker peaked at $415.

Since then, they have plunged 72 percent, as investors worry about waning demand, falling production and price cuts in China, labor shortages in Europe, and, of course, the long-term impact of CEO Elon Musk’s $44 billion acquisition of Twitter. After announcing his plans to buy the platform in April, Musk financed his acquisition with $13 billion in loans and $33 billion in cash, roughly $23 billion of which was raised by selling shares in Tesla.

“Many investors, particularly retail, who invested disproportionately large sums of their wealth largely on the basis of trust in Musk over many years were very quickly burned in the months following the acquisition,” Lagetko says, “particularly in December as he sold more stock, presumably to fund losses at Twitter.”

Lagetko trimmed his exposure in early 2022 due to concerns over Tesla’s governance, but he is worried that the leveraged buyout of Twitter has left Tesla vulnerable, as interest payments on the debt Musk took on to fund the takeover come due at the same time as the social media company’s revenues have slumped.

But Tesla stock was already falling in April 2022, when Musk launched his bid for Twitter, and analysts say that the carmaker’s challenges run deeper than its exposure to the struggling social media platform. Tesla and its CEO have alienated its core customers while its limited designs and high prices make it vulnerable to competition from legacy automakers, who have rushed into the EV market with options that Musk’s company will struggle to match.

Prior to 2020, Tesla was essentially “playing against a B team in a soccer match,” says Matthias Schmidt, an independent analyst in Berlin who tracks electric car sales in Europe. But that changed in 2020, as “the opposition started rolling out some of their A squad players.”

In 2023, Tesla is due to release its long-awaited Cybertruck, a blocky, angular SUV first announced in 2019. It is the first new launch of a consumer vehicle by the company since 2020. A promised two-seater sports car is still years away, and the Models S, X, Y, and 3, once seen as space-age dynamos, are now “long in the tooth,” says Mark Barrott, an automotive analyst at consultancy Plante Moran. Most auto companies refresh their looks every three to five years—Tesla’s Model S is now more than 10 years old.

By contrast, this year Ford plans to boost production of both its F-150 Lighting EV pick-up, already sold out for 2023, and its Mustang Mach-E SUV. Offerings from Hyundai IONIQ 5 and Kia EV6 could threaten Tesla’s Model Y and Model 3 in the $45,000 to $65,000 range. General Motors plans to speed up production and cut costs for a range of EV models, including the Chevy Blazer EV, the Chevy Equinox, the Cadillac Lyric, and the GMC Sierra EV.

While Tesla’s designs may be eye-catching, their high prices mean that they’re now often competing with luxury brands.

“There is this kind of nice Bauhaus simplicity to Tesla’s design, but it’s not luxurious,” says David Welch, author of Charging Ahead: GM, Mary Barra, and the Reinvention of an American Icon. “And for people to pay $70,000 to $100,000 for a car, if you’re competing suddenly with an electric Mercedes or BMW, or a Cadillac that finally actually feels like something that should bear the Cadillac name, you’re going to give people something to think about.”

While few manufacturers can compete with Tesla on performance and software (the Tesla Model S goes to 60 mph in 1.99 seconds, reaches a 200-mph top speed, and boasts automatic lane changing and a 17-inch touchscreen for console-grade gaming), many have reached or are approaching a range of 300 miles (480 km), which is the most important consideration for many EV buyers, says Craig Lawrence, a partner and cofounder at the investment group Energy Transition Ventures.

One of Tesla’s main competitive advantages has been its supercharging network. With more than 40,000 proprietary DC fast chargers located on major thoroughfares near shopping centers, coffee shops, and gas stations, their global infrastructure is the largest in the world. Chargers are integrated with the cars’ Autobidder optimization & dispatch software, and, most importantly, they work quickly and reliably, giving a car up to 322 miles of range in 15 minutes. The network contributes to about 12 percent of Tesla sales globally.

“The single biggest hurdle for most people asking ‘Do I go EV or not,’ is how do I refuel it and where,” says Loren McDonald, CEO and lead analyst for the consultancy EVAdoption. “Tesla figured that out early on and made it half of the value proposition.”

But new requirements for funding under public charging infrastructure programs in the US may erode Tesla’s proprietary charging advantage. The US National Electric Vehicle Infrastructure Program will allocate $7.5 billion to fund the development of some 500,000 electric vehicle chargers, but to access funds to build new stations, Tesla will have to open up its network to competitors by including four CCC chargers.

“Unless Tesla opens up their network to different charging standards, they will not get any of that volume,” Barrott says. “And Tesla doesn’t like that.”

In a few years, the US public charging infrastructure may start to look more like Europe’s, where in many countries the Tesla Model 3 uses standard plugs, and Tesla has opened their Supercharging stations to non-Tesla vehicles.

Tesla does maintain a software edge over competitors, which have looked to third-party technology like Apple’s CarPlay to fill the gap, says Alex Pischalnikov, an auto analyst and principal at the consulting firm Arthur D. Little. With over-the-air updates, Tesla can send new lines of code over cellular networks to resolve mechanical problems and safety features, update console entertainment options, and surprise drivers with new features, such as heated rear seats and the recently released full self-driving beta, available for $15,000. These software updates are also a cash machine for Tesla. But full self-driving features aren’t quite as promised, since drivers still have to remain in effective control of the vehicle, limiting the value of the system.

A Plante Moran analysis shared with WIRED shows Tesla’s share of the North American EV market declining from 70 percent in 2022 to just 31 percent by 2025, as total EV production grows from 777,000 to 2.87 million units.

In Europe, Tesla’s decline is already underway. Schmidt says data from the first 11 months of 2022 shows sales by volume of Volkswagen’s modular electric drive matrix (MEB) vehicles outpaced Tesla’s Model Y and Model 3 by more than 20 percent. His projections show Tesla’s product lines finishing the year with 15 percent of the western European electric vehicle market, down from 33 percent in 2019.

The European Union has proposed legislation to reduce carbon emissions from new cars and vans by 100 percent by 2035, which is likely to bring more competition from European carmakers into the market.

There is also a growing sense that Musk’s behavior since taking over Twitter has made a challenging situation for Tesla even worse.

Over the past year, Musk has used Twitter to call for the prosecution of former director of the US National Institute of Allergy and Infectious Diseases Anthony Fauci (“My pronouns are Prosecute/Fauci”), take swings at US senator from Vermont Bernie Sanders over government spending and inflation, and placed himself at the center of the free speech debate. He’s lashed out at critics, challenging, among other things, the size of their testicles.

A November analysis of the top 100 global brands by the New York–based consultancy Interbrand estimated Tesla’s brand value in 2022 at $48 billion, up 32 percent from 2021 but well short of its 183 percent growth between 2020 and 2021. The report, based on qualitative data from 1,000 industry consultants and sentiment analysis of published sources, showed brand strength declining, particularly in “trust, distinctiveness and an understanding of the needs of their customers.”

“I think [Musk’s] core is rapidly moving away from him, and people are just starting to say, ‘I don’t like the smell of Tesla; I don’t want to be associated with that,’” says Daniel Binns, global chief growth officer at Interbrand.

Among them are once-loyal customers. Alan Saldich, a semi-retired tech CMO who lives in Idaho, put a deposit down on a Model S in 2011, before the cars were even on the road, after seeing a bodiless chassis in a Menlo Park showroom. His car, delivered in 2012, was number 2799, one of the first 3,000 made.

He benefited from the company’s good, if idiosyncratic, customer service. When, on Christmas morning 2012, the car wouldn’t start, he emailed Musk directly seeking a remedy. Musk responded just 24 minutes later: “…Will see if we can diagnose and fix remotely. Sorry about this. Hope you otherwise have a good Christmas.”

On New Year’s Day, Joost de Vries, then vice president of worldwide service at Tesla, and an assistant showed up at Saldich’s house with a trailer, loaded the car onto a flatbed, and hauled it to Tesla’s plant in Fremont, California, to be repaired. Saldich and his family later even got a tour of the factory. But since then, he’s cooled on the company. In 2019, he sold his Model S, and now drives a Mini Electric. He’s irritated in particular, he says, by Musk’s verbal attacks on government programs and regulation, particularly as Tesla has benefited from states and federal EV tax credits.

“Personally, I probably wouldn’t buy another Tesla,” he says. “A, because there’s so many alternatives and B, I just don’t like [Musk] anymore.”

CORRECTION 1/24/23 11:15AM ET: This story has been updated to reflect that Alex Lagetko reduced his stake in Tesla in early 2022.

Iridium – The Making of the Largest Satellite Constellation in History

The Making of the Largest Satellite Constellation in History

How Iridium rose from its ashes to launch the era of satellite megaprojects.

An artist’s rendering of an Iridium Next satellite in orbit. Image: Iridium

Matt Desch didn’t set out to change the world, but he just might do it anyway. As the CEO of Iridium, the only company that provides satellite communications to every inch of the globe, he is at the helm of Next, a fleet of telecommunications satellites that is arguably one of the most ambitious space projects ever undertaken.

By this time next year, Iridium will have sent 75 Next satellites into orbit. Each one will be replacing a first-generation Iridium satellite that has been in orbit for almost two decades. Once these new satellites are in place, they will establish radio contact with one another over thousands of miles of empty space to create the largest and most complex mesh network ever placed in orbit.

Like the first-generation network, these Iridium Next satellites will provide critical phone and data services to everyone from scientists in Antarctica and military contractors in the Middle East, to drug mules in Central America and climbers on the summit of Mount Everest.

A payload capsule filled with 10 Iridium Next satellites on board a Falcon 9 rocket ahead of the Iridium-3 launch in October 2017. Image: Daniel Oberhaus/Motherboard

But the Next constellation also comes with a suite of new features. Not only will it provide an orbital backbone for the expanding Internet of Things, the satellite network will also be tracking planes and ships in regions they’ve never been tracked before. Almost 70 percent of the Earth isn’t covered by radar, which is why the ill-fated Malaysia Airlines flight was able to disappear into the ocean in 2014 without a trace. Iridium hopes to make these sorts of tragedies obsolete.

That’s if everything goes according to plan, of course, and Iridium isn’t exactly known for its successes. A little under 20 years ago, it was the subject of one of the largest corporate bankruptcies in history. Indeed, the original fleet of satellites that Iridium is replacing with its Next constellation came within hours of a fiery demise, after the company decided to cut its losses after filing for bankruptcy and deorbit them.

In this sense, each Iridium Next launch not only represents the culmination of several years’ worth of intensive design, research, and testing by an international team of scientists and engineers, but also the dogged pursuit of a (quite literally) lofty goal in the face of overwhelmingly bad odds. In order to get a better understanding of the stakes, I followed the next generation of Iridium satellites from their birth in a warehouse in the Arizona desert to their delivery to orbit nearly 500 miles overhead.


Last October, I met Desch, who has been Iridium’s CEO for nearly 12 years, for breakfast at a restaurant in Solvang, California. We had just finished watching the third batch of ten Iridium satellites get delivered to orbit aboard a SpaceX Falcon 9 rocket that launched from nearby Vandenberg Air Force Base. It was well before noon, but both Desch and I had been awake for hours.

A SpaceX rocket carrying the third batch of Iridium satellites launches from Vandenberg Air Force base on October 9, 2017. Image: Daniel Oberhaus/Motherboard

As we devoured our avocado toast, Iridium engineers on the East Coast were busy maneuvering the satellites into their orbital planes while Desch explained why SpaceX and Iridium are ideal partners.

“In many ways, the Falcon 9 was built around the Iridium payload because we were the first ones to work with SpaceX,” Desch told me. “Launching is about a third of our costs and if SpaceX wasn’t around, I just couldn’t afford it.”

On the other hand, Iridium, which was SpaceX’s first customer and remains its largest, provides SpaceX with a major source of revenue that it won’t find anywhere else in the commercial sector. As Desch bluntly put it, “Nobody launches 75 satellites.”

Desch’s faith in Elon Musk’s rockets hasn’t wavered over the years, but watching the Falcon 9 rocket explode on the launch pad in September 2016 made an impression on him. The first ten Iridium satellites had been scheduled to head to orbit a few weeks later, but the explosion delayed deployment until last January.

SpaceX touts its “flight proven” rockets as a cost-saving measure, but the extra risk that comes with flying on a used rocket is part of the reason why Iridium’s original contract with the private spaceflight company specified that its cargo would never be flown on a Falcon 9 booster that had previously been to space. On the other hand, the rocket that claimed a Facebook satellite that September had been brand new, a forceful reminder that when it comes to space travel there are no guarantees.

Flying “used” would save Iridum some money, but it’s a gamble: Each of Iridium’s payloads is worth a quarter billion dollars and the loss of even a single one would be disastrous. After lengthy talks with SpaceX and his insurance providers, however, Desch recently opted to send the fourth and fifth batches of Iridium satellites on flight-proven rockets. Given the high stakes of each launch, this speaks volumes about his confidence in Musk’s company.

On December 22, SpaceX carried a batch of Iridium satellites to orbit on a previously flown rocket for the first time. Whatever Desch’s anxieties were about flying used, they proved to be unfounded—the launch went flawlessly.

How to Build a Satellite

Iridium’s journey to space begins in a nondescript building in pastoral Gilbert, Arizona, a Phoenix suburb. This building is home to Orbital ATK, the aerospace company overseeing the manufacturing process of the Iridium Next constellation, and sits just across the street from a farm where a handful of cows spend their days idly chewing cud. The sterile hallways of the Orbital ATK building are cavernous and lined with doors plastered with warnings that these rooms house strictly controlled materials.

Technicians prepare an Iridium satellite at the Orbital factory. Image: Iridium

Under the International Traffic in Arms Regulations (ITAR), many satellite parts are subject to the same stringent oversight as weapons like tanks and hand grenades. These technologies are usually off limits to civilian eyes and can’t be shared with foreign governments. This regulation has been a pain the side of the space industry for years, but for a visitor to Orbital ATK’s facilities like myself, it mostly meant I wouldn’t be bringing a camera inside.

The facility consists of five massive clean rooms for storing and assembling satellites. Orbital ATK has registered each of these as a Foreign Trade Zone, a legal distinction that is the industrial equivalent to a duty free shop at an airport and saves the company paying steep taxes on imported parts. The largest FTZ is reserved for the manufacture of Iridium satellites, consists of 18 workstations, and has technicians in cleanroom suits working on site 24/7.

Most satellites are unique and their production is a painstaking process that can last years. This wasn’t going to work for Iridium: The company needed to manufacture 81 satellites (75 to be placed in orbit with six remaining on the ground as spares) in the amount of time it usually takes to make one. In short, Iridium tasked Orbital ATK with doing for aerospace what Henry Ford had done for the automobile.

This was a challenge for a relatively small company, but it had some experience in the area. In the late 90s, Orbital also oversaw the construction of the first constellation of Iridium satellites, when the idea of mass producing satellites was totally unprecedented and deemed by many to be impossible.

Many of the engineers that worked on that first constellation are still at the company today, but this time the design of the Next satellites was overseen by the French aerospace company Thales.

Thales had a legacy satellite design that was adapted for the Iridium payloads, but according to the Orbital ATK and Thales engineers I spoke with, the design collaboration process could still be painstakingly slow due to ITAR restrictions. Often, Thales would send its preliminary designs to Orbital ATK, only to find a number of adjustments needed to be made, even though the exact nature of these adjustments was unclear due to restrictions on the sharing of component designs.

After a drawn-out revision process, the satellite designs were passed off to Orbital ATK, which began to manufacture seven of the planned 81 satellites. These seven satellites are the only ones that run the gamut of testing, which includes subjecting them to intense vibrations, electromagnetic interference and acoustic tests that Michael Pickett, Orbital ATK’s director of program management, described to me as “blasting the satellites with the biggest, baddest rock concert speakers you can imagine.”

The point of these tests was to validate the design process—if the satellites still worked after this mechanical torture, it meant the other 74 satellites that would pass through the assembly line should work fine, too.

After the design validation tests, Orbital ATK kicked its 18-station assembly line into high gear. Until the last one is finished, sometime in early 2018, the assembly line will see five to six satellites from start to completion each month. The process starts with assembling the different parts of the satellite body—called the “bus”—which is about the size of a Mini Cooper. Once the bus is completed, Orbital ATK technicians begin testing the satellite’s electronic components and communication modules, antenna alignment, and insulation.

Toward the end of the assembly line, each satellite is placed in a thermal chamber for 12 days and is subjected to extremely high and low temperatures to see how it will hold up in the hostile space environment. If the satellite survives, it progresses to station 15, where the star tracker that will be used to track the satellite’s position in orbit is installed. This station also holds sentimental value for the Orbital ATK engineers—the point where a plate dedicating the craft to a specific employee or investor is installed on the craft.

10 Iridium satellites are loaded into a specially designed payload capsule to be placed atop a SpaceX Falcon 9 rocket. Image: Iridium

Next, the satellites’ fuel tanks are filled with helium and placed in an airtight tent that is pumped full of nitrogen. Due to the size difference of these molecules, the engineers are able to look for any leaks that might’ve cropped up during the assembly process.

Finally, the solar panels that will serve as a power supply for the satellite are installed and the craft is basically ready for orbit. Iridium then has to decide whether or not the satellite will be one of the ten going up on the next SpaceX rocket. If not, it will join a few dozen other satellites stacked two-high and covered with black tarps inside a large storage room, until they’re ready for launch.

If a finished satellite is destined to go up on the next launch, its batteries will be removed from cold storage and installed on the craft at the last station. Here, the satellite’s software is uploaded to the craft and Iridium technicians at its Satellite Network Operations Center in Virginia establish contact with the satellite to make sure they will be able to communicate with the craft while it’s in orbit. The satellite is then loaded into a custom shipping container for its journey to Vandenberg Air Force Base in California, its final stop on Earth.

After liftoff, Iridium’s global network of technicians takes over to make sure the satellites are communicating with one another and the gateways on Earth as they are maneuvered into orbit—a process that can take up to a month. Once they are properly in orbit, the satellites will not only begin talking to one another and Iridium devices on the ground, but also one of the three gateways that link the satellite constellation to the telecommunications infrastructure that most of us use on a daily basis.


When I visited Iridium’s main gateway in Tempe, Arizona, it was a hive of activity. (The other two gateways are exclusively for the US Department of Defense and Russia, respectively.) Iridium technicians sat in a darkened control room watching satellites tear across a projection of the Earth as they monitored calls being routed through the network for any signs of an error.

Iridium’s main satellite network operations center in Virginia. Image: Iridium

According to Stuart Fankhauser, Iridium’s vice president of network operations, it wasn’t so long ago that the operating room was a dead zone as the company teetered on the brink of bankruptcy.

“I was one of the last guys here,” Fankhauser told me. “It was just me and four others, and we ran everything. It was very quiet, very eerie.”

Iridium was spun off as a subsidiary of Motorola in the 1990s. Its first-generation constellation was originally expected to cost around $3.5 billion, but by the time the satellites were functional, Motorola had sunk almost twice that much into the revolutionary project.

To make matters worse, in the early 90s there were hardly any customers for Iridium’s satellite phone service, the constellation’s raison d’être. This was partly due to the unwieldy size of the company’s satellite phone (affectionately known as “the brick”), but mostly a consequence of its cost: thousands of dollars for the phone and then around $7/minute to make a call. Before it filed for bankruptcy, Iridium had roughly 60,000 customers, but increasing cell phone coverage in the United States and Europe meant that the very populations that could afford the device had increasingly little need for it.

In August 1999, Motorola pulled the plug on its ambitious satellite project and Iridium filed for bankruptcy, just nine months after the satellite constellation went live. Unless another company bought it out—and by 1999, no investor in their right mind would touch this space-age Icarus—Iridium would be done for.

Enter Dan Colussy, the former president of Pan American airlines who had been monitoring Iridium’s troubles with great interest. Just hours before Motorola was scheduled to begin the deorbiting process, Colussy was busy negotiating terms with the Department of Defense, Saudi financiers, and Motorola executives that would allow him to formally purchase the company for around $35 million, a fraction of the billions of dollars the tech giant had sunk into it.

Iridium VP of satellite operations Walt Everetts with one of the company’s grounded test satellites in Tempe, Arizona. Image: Daniel Oberhaus/Motherboard

As detailed in Eccentric Orbits, journalist John Bloom’s tell-all memoir of Iridium’s unlikely rise and spectacular failure, Colussy, who didn’t respond to my requests for comment, knew the satellite constellation would be good for something, he just wasn’t sure what. Iridium was an unprecedented technological feat that simply seemed too valuable to allow it to burn up in the atmosphere. Sixteen years later, Colussy’s intuition is finally being proven correct, but Iridium’s employees told me it was an uphill battle to make it here.

“We had to be pretty scrappy back then,” Fankhauser told me as we walked through Iridium’s Tempe gateway facility. “We were burning our investors’ money so we bought supplies off eBay and liquidators from failing dotcoms. It was humbling.”

The gateway is one half of Iridium’s backend operations. The other half, a test facility just down the road, is constantly probing the satellite network for weaknesses or seeking ways to improve Iridium’s service. Inside the test facility are two large Faraday cages filled with every type of Iridium phone and IoT device that operates on the Iridium network.

These devices are used to call two partially disassembled satellites in another room that have been programmed to “think” they’re in orbit in order to test the load-bearing capacity of the operational network and the compatibility of various devices. On the day I visited, Iridium engineers had successfully managed to place 1,700 simultaneous calls through a single satellite, a company record.

Walt Everetts is Iridium’s vice president of satellite operations and ground development and oversees the day to day activities at the test center. He showed me a large interactive map in the test center’s lobby that depicted calls on the network in real time. Small colored dots indicated different types of services: someone in Dubai calling someone in China or a sailor in the Atlantic checking their email. But the vast majority of the dots indicated machines talking to other machines.

Iridium satellites waiting to be loaded onto a Falcon 9 rocket. The white box at the top is the Aireon hosted payload, which will track planes in regions of the world that are outside of ground-based RADAR range. Image: Iridium

As Everetts and Desch both pointed out, the growth of the Internet of Things is a key reason why they believe Iridium will be a viable company this time around. Although facilitating calls between humans is still a core component of the company’s business, most of the network is used to route information between computers, whether these are tsunami monitoring buoys in the middle of the ocean, or chips implanted to track endangered animals. In fact, Desch said over half of Iridium’s almost 1 million subscriptions are now IoT companies looking to connect their devices.

End of an Era

Iridium is one of the few companies in the aerospace sector, alongside SpaceX, that can claim to have anything close to a fan club. Aside from the customers actually using its products, there are a number of astroheads around the world cataloging a phenomenon known as Iridium flares. The original satellites were designed with a large reflective surface, meaning at certain angles the sunlight produces a bright flare that can be seen with the naked eye at night, even in light polluted cities.

This passion was also expressed by Iridium technicians I spoke with, who had an uncanny habit of referring to the satellites in the same manner a parent might speak about their child. Indeed, each one has a name—Everetts has named two after his sons—and this adds a degree of gravitas to the deorbiting process, which can take anywhere from a few days to several months, depending on how much fuel is left in a satellite. At the time of writing, six of the original Iridium satellites launched in the late 90s have been successfully deorbited. Several others will meet their demise later this year.

Yet the end of the original Iridium network is also the beginning of something new—not just for the company, but for space exploration as a whole.

Today, companies like OneWeb, Boeing, and SpaceX are in a race to create massive broadband networks consisting of hundreds of satellites, but Iridium doesn’t see them as much of a threat. In the first place, most of these planned constellations are for consumer broadband, whereas Iridium provides specialized services. More importantly, however, none of these companies has even come close to getting those projects off the ground.

This race to take the internet to space calls to mind other ambitious and ill-fated satellite telecommunications companies of the 90s, like Teledesic and Globalstar. Both these companies collapsed after Iridium filed for bankruptcy and demonstrated that there wasn’t a real market for satellite phones. It’s highly likely this new crop is carefully watching Iridium, just like the space industry did back in the 90s, to see whether its ambitious program will work. So far, everything has gone off without a hitch.

But 35 more satellites still need to be launched. And there is plenty of opportunity for error. The gamble is a big one, and so is the reward—being the first, and only, company to provide communications coverage to every inch of the globe.

“We’re the only company that’s ever launched this many satellites and we’re the only one still doing it today,” Desch told me. “But because of our success, we’ve inspired a whole new industry: This is the era of Low Earth Orbit satellite megaconstellations.”


These Technologies May Actually Deliver Elon Musk’s Dream of Changing the World

As Tesla founder Elon Musk promises to change the world, starting with a giant battery factory in the Nevada desert, investors from Toronto to Tokyo are quietly developing the next-generation technologies that may actually get him there.

Batteries, especially the lithium-ion variety used in mobile phones and electric cars, are likely to dominate the $44 billion or more spent on energy storage by 2024, according to Bloomberg New Energy Finance. Trouble is, they’re not the solution to all needs.

As well as the environmental impact of mining lithium, which has been blamed for starving flamingos in northern Chile, batteries lose their charge over time. They can balance minute-to-minute shifts in supply. But they can’t absorb solar power generated in summer, say, and deliver it in winter.

“We’re going to need a whole range of solutions to keep the lights on,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “If your problem is that the sun doesn’t shine in winter, are you really going to buy a battery, charge it once a year during summer and use it once a year in winter? I don’t think so. You can’t just jump to batteries as the single solution.”

Storage devices are crucial to expanding the wind and solar industries and curtailing pollution because they allow what’s generated now to be consumed later. Just as refrigeration changed the way we handled food in the 20th century, energy storage will give grid operators and rooftop-solar consumers flexibility about when to use the power they produce — reducing the number of big power plants the world needs.

Here’s the leading energy storage projects on the drawing board that go beyond lithium-ion batteries:


Long before batteries, electricity was stored through plants that pump water uphill to a reservoir and release it through turbines when it’s needed. It’s long-lived enough to be hold solar power generated in the summer for use in the winter. Hydropower is renewable energy’s oldest technology and accounts for well over 90 percent of energy storage, according to the U.S. Department of Energy.

As well as classic hydroelectric stations, tidal lagoons may also offer energy storage in a similar way by holding water for short periods, according to Tidal Lagoon Power Ltd., which is planning to build six lagoons around the U.K. coast line.


Trains can double as storage. In April, Advanced Rail Energy Storage won approval from the Nevada Bureau of Land Management for a $55 million project using rail locomotives.

ARES will build a 6-mile uphill rail corridor involving heavily-loaded trains. When power’s cheap, trains will be pushed up a hill. When the power is needed, they’ll be released down, supplying energy back to the grid through an overhead wire.

Chief Executive Officer Jim Kelly reckons the system can be deployed at about 60 percent of the cost of an equivalent pumped-hydro facility. The nine-month construction program is expected to start in the second quarter of 2017. Once complete, it could run for 40 years.

Air storage

Compressed air storage sequesters a gas underground so it can be released later to drive a generation turbine whenever needed.

One project in Toronto sends the air underwater where it’s stored in balloons. When demand for power rises, the air comes back to the surface through a pipe, where it’s converted into electricity.

Compressed air storage requires a specific type of rock formation. The world has a handful of existing projects — one in Huntorf, Germany and another in McIntosh, Alabama. Several large scale projects have been put on ice, including the Iowa Stored Energy Plant near Des Moines and Dresser-Rand Group’s 317-megawatt Apex Bethel Energy Center in Anderson County, Texas.


Companies including carmaker Audi are developing power-to-gas technology that turns excess energy into hydrogen using electrolysis. The hydrogen can be directly injected into a gas network, or “upgraded” into methane and used as a substitute for natural gas.

Siemens, the world’s biggest power-equipment maker, is working on an approach that turns hydrogen into a clean ammonia, that could potentially provide emissions-free fertilizer that could be used by farmers everywhere.

Advocates say it can deliver both long and short-term back up power since the gas can be trapped indefinitely. That means it can shift electricity made in summer for use in the winter. It isn’t yet clear whether the economics will stack up.


Flywheels look nothing like a traditional battery. Think of a spinning drum that stores the kinetic energy in a way that can be made into electricity. Power is used to start the wheel turning. Then when electricity is in short supply, the flywheel turns a motor that generates electricity. They can deliver either short bursts or for longer periods.

Railway Technical Research Institute, a Tokyo-based developer of railroad technologies, is working on a flywheel that uses superconducting magnetic bearings that allow the wheel to spin with less friction. Its system also uses a plastic that’s reinforced with carbon fiber, making the flywheel stronger and faster. The bearings allow the flywheel to float without making contact with its housing, reducing energy lost through friction.

Railway Technical is developing the flywheel technology with Furukawa Electric Co. and Mirapro Co. They have set up a flywheel system at a 1-megawatt solar park in Japan’s Yamanashi prefecture. Temporal Power Ltd. and Beacon Power Corp. are also pursuing flywheel systems.

8 Powerful Lessons You Can Learn From the Career of Elon Musk

Elon Musk, in the words of one blogger who did a series of in-depth interviews with the Tesla and SpaceX founder, is, basically, „the raddest man alive.“ Who could fail to be impressed by a single entrepreneur who has set his sights on both getting humans to Mars and revolutionizing our energy economy?

Because Musk is so obviously extraordinary, it could be easy to feel like his career is a world apart — the efforts of a visionary that mere mortals like us could never emulate. But while it’s probably true that, for most of us, the ship has sailed on leading the way to interplanetary travel, that doesn’t mean folks with more down-to-earth careers have nothing to learn from the mogul.

When a user of question-and-answer site Quora asked the simple question, „What can we learn from Elon Musk?“ a host of devoted Musk watchers offered thoughtful answers. Among the best was a reply from blogger (and recent New York Times profile-ee) James Altucher, who took the time to listen „to every interview [Musk] ever did and compiled what I think are the most inspirational quotes.“

Here are a few of the 22 essential takeaways he extracted from all that research:

1. Focus on the impact of your dreams, not the odds.

Maybe, like Altucher, your initial reaction to this principle is to worry that your particular dreams might just be impossible. But, as Altucher reminds readers, this advice is coming from a man who wants to colonize Mars. Are you dreams really more of a long shot than that?

2. No one does amazing things for the money.

„I’ve interviewed over 100 people now on my podcast. Each of the 100 have achieved amazing results in their life,“ notes Altucher. „But none of them have done if for the money.“ Neither did Musk, who Altucher quotes as saying: „Going from PayPal, I thought: ‚Well, what are some of the other problems that are likely to most affect the future of humanity?‘ Not from the perspective, ‚What’s the best way to make money?'“

The takeaway: if you want to do great things, focus on the difference you’ll make in the world (or to yourself), not the financial rewards (or the glory).

3. Reason from first principles.

A lot has been written about Musk’s mindset, but Altucher sums up his unusual and incredibly effective approach with this quote: „Boil things down to their fundamental truths and reason up from there.“ In short, to improve your thinking, set received wisdom aside and try to look at the world with fresh eyes, using objective data and clear-headed observation.

4. Persistence pays.

Not all of the lessons of Musk’s career are off the wall and unexpected. Sometimes, he proves that conventional wisdom is right. Like with this quote: „Persistence is very important. You should not give up unless you are forced to give up.“

5. In hiring, talent beats numbers.

Some entrepreneurs tackle difficult problems by trying to throw a whole lot of warm bodies at them. Not Musk.

„It is a mistake to hire huge numbers of people to get a complicated job done. Numbers will never compensate for talent in getting the right answer (two people who don’t know something are no better than one), will tend to slow down progress, and will make the task incredibly expensive,“ Altucher quotes him as saying.

So next time you need to hire your way out of jam, spare a thought for this bit of wisdom and take the time to find the right talent rather than just hoping that brute numbers will save you.

6. Talent can’t compensate for a lousy personality.

According to Altucher, Musk is a late but fervent convert to the idea that great ability can’t compensate for a lousy personality.

Here’s the quote: „My biggest mistake is probably weighing too much on someone’s talent and not someone’s personality. I think it matters whether someone has a good heart.“ So, once more with feeling: don’t hire jerks!

7. Constantly question yourself.

You’d think that someone with Musk’s achievements might be satisfied with his efforts, but that’s not the case. Musk claims he constantly strives to improve himself.

„It’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice: constantly think about how you could be doing things better and questioning yourself,“ he said. If Musk isn’t resting on his laurels, neither should you.

8. Finding the right questions is most of the battle.

Apparently, Musk’s favorite book as a teenager was The Hitchhiker’s Guide to the Galaxy. Here’s the biggest lesson he took away from it: „It taught me that the tough thing is figuring out what questions to ask, but that once you do that, the rest is really easy.“

What can we learn from Elon Musk?

The three fundamentals to Elon Musks success.


How to constantly build your knowledge and understanding.

An oft asked question of Musk – ‘How did he learn so much?’

Since childhood, he has been a tireless self learner. At the age of 10 he resorted to reading Encyclopedia Britannica after devouring every other book at home.

From interviews and discussions with Musk, its becomes apparent that he views people as computer systems, being made up of hardware (body) and software (mind). Recognizing that your software is one of the most powerful tools that you possess, Musk works tirelessly on updating his, feeding it with more knowledge and information when he wants to understand a problem.

Jim Cantrell, one of the founding team members of SpaceX comments on Musk’s incredibly fast learning ability:

“He literally sucks the knowledge and experience out of people that he is around. He borrowed all of my college texts on rocket propulsion when we first started working together in 2001.”

In 2000, before Musk had even set up SpaceX, he began devouring books on propulsion, avionics and aeronautical engineering. He already knew that his goal was landing people on Mars, now he just needed to upgrade his software with the information and tools on how to accomplish it.

A trait that underpins Musk’s model of thinking is being able to quickly consume and understand complex information, then plan with clarity how to apply it in making progress towards his goal. People are impressed with his deep knowledge across a wide range of technical subjects, from electrical, structural, mechanical, aeronautical, and software engineering through to business strategy and more.

“I think most people can learn a lot more than they think they can. They sell themselves short without trying.

One bit of advice: it is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.”

Elon Musk

This habit of self learning and forcing himself to understand new concepts, gives him a huge internal database of knowledge that he is then able to run through his internal problem solving tool.


How to get to the nucleus of a problem and understand the facts.

Aristotle described a first principle as, “[the] first basis from which a thing is known”.

It means basing conclusions on fundamental truths, not on assumption or analogy.

Reasoning from first principles requires mental effort. It means boiling things down to their most basic truths, and reasoning up from those truths. It requires you to actively engage your brain and work ideas through.

The alternative to this is reasoning by analogy. Assuming something is true or correct because it’s similar to something else that has been done before.

Musk is a master of using the scientific method of first principle reasoning, and applying it to problem solving scenarios. Here is one example;

“Historically, all rockets have been expensive, so therefore, in the future, all rockets will be expensive. But actually that’s not true. If you say, what is a rocket made of? It’s made of aluminium, titanium, copper, carbon fiber. And you can break it down and say, what is the raw material cost of all these components? If you have them stacked on the floor and could wave a magic wand so that the cost of rearranging the atoms was zero, then what would the cost of the rocket be? And I was like, wow, okay, it’s really small—it’s like 2% of what a rocket costs. So clearly it would be in how the atoms are arranged—so you’ve got to figure out how can we get the atoms in the right shape much more efficiently.

And so I had a series of meetings on Saturdays with people, some of whom were still working at the big aerospace companies, just to try to figure out if there’s some catch here that I’m not appreciating. And I couldn’t figure it out. There doesn’t seem to be any catch. So I started SpaceX.”

Elon Musk

In our day to day, we make most decisions based on analogy. It would simply take too much mental time and capacity to question every single small decision during the day.

But when it comes to big decisions, it’s important to reason from first principle. Make sure you know the facts, data and figures, don’t just follow the crowd and assume.


How to give your ideas the best chance of success.

Highly intelligent, fast learning, dynamic problem solving ability and lots of money, they’ve all contributed to the success of Musk’s endeavours. But there’s another key character trait to the man which has been critical to his success – an incredible and highly efficient work ethic.

“Work like hell. I mean you just have to put in 80 to 100 hour weeks every week. [This] improves the odds of success. If other people are putting in 40 hour work weeks and you’re putting in 100 hour work weeks, then even if you’re doing the same thing you know that… you will achieve in 4 months what it takes them a year to achieve.”

Elon Musk

The fact is that Elon Musk gets a lot done. Running two separate billion dollar companies requires making a lot of decisions and having eyes on many moving parts. Here are some of the key aspects to Musk’s working process that make him so efficient.

– 100 hours a week – has noted many times that at critical periods in the lifespan of his companies, he has gone from working 80-90 hour weeks up to doing 100 hours a week. It is not unusual for him to work seven days a week, normally rising at 7am and getting to bed around 1am.

– Batching – or multitasking, he combines multiple tasks which can be done together effectively e.g. Emailing while reviewing spreadsheets, meetings over lunch, etc.

– Scheduling – A man as busy as Musk needs to run to a tight schedule to be efficient. He spends Monday and Thursday at SpaceX in LA, Tuesday and Wednesday at Tesla in the Bay Area, and splits Friday between both. His assistant has his planner broken down into five minute slots, and there’s a long line of people trying to get ahold of him for that time. Efficient scheduling is a behaviour pattern seen in many highly successful people.

– Feedback loop – Musk is a strong believer in constructive criticism. He constantly bounces ideas off colleagues and advisors to sense check them. Open and honest criticism should be encouraged to help improve an idea or product. “Constantly think about how you could be doing things better and questioning yourself.” – Elon Musk

– Caffeine – „To get through the day, Musk relies on two stimulants: caffeine and a desire to help humanity colonize Mars. Until he recently started cutting back on the former, Musk consumed eight cans of Diet Coke a day, as well as several large cups of coffee. „I got so freaking jacked that I seriously started to feel like I was losing my peripheral vision,“ he says. If he realizes how crazy this sounds, he doesn’t let on.” – from Inc Magazine.

How Hyperloop (Elon Musk) will change how we travel

Hyperloop one Pod in motionHyperloop One

If you are like most, you probably find air travel to be a stressful experience.

There’s the commute to the airport, the long lines to check your bag, the security check, and then once you’re finally on the plane, there’s the tight squeeze of sitting for several hours with barely any legroom.

And yet, air travel is really our only option for traveling hundreds of miles quickly. But the Hyperloop could change that.

The Hyperloop is a tubular transport system that carries passengers in capsules at speeds reaching more than 700 miles per hour. Tesla and SpaceX CEO Elon Musk first proposed the idea in a white paper published in 2013 and made his research public so others could pursue developing the concept. The LA-based startup Hyperloop One is doing just that.

But Hyperloop One doesn’t just want to build a system that is as fast as a plane. The company wants to create an entirely new travel experience, one that is a lot less stressful and a lot more convenient.

„It’s not about getting somewhere, it’s about being somewhere. We’re not trying to optimize the transportation experience, we are trying to eliminate it,“ Brogan BamBrogan, Hyperloop One’s co-founder and chief technology officer, said at a company event earlier this month.

How exactly does it plan on doing this?

BamBrogan shared with Tech Insider four ways the Hyperloop will revolutionize all aspects of transportation.

It will be more accessible and more efficient.

It will be more accessible and more efficient.

Hyperloop One

For starters, Hyperloop One wants to put stations in the middle of cities so that there’s no annoying commute to an airport-like hub outside metropolitan areas, Brogan BamBrogan, Hyperloop One’s co-founder, told Tech Insider.

“Effectively, the Hyperloop will move people about the speed of an airplane. But we can do it city center to city center as we integrate ourselves into tunneling, so that’s really a value add,” BamBrogan said.

That’s right, effectively you’d get to say goodbye to that $30 cab ride to and from the airport outside the city.

What’s more, because the Hyperloop is in a controlled environment and is completely autonomous, you will never be delayed because of weather or because of an operator’s error.

No more ticket lines.

No more ticket lines.

Hyperloop One

BamBrogan also said the company wants to introduce a streamlined ticketing system so that lines are a thing of the past.

“Certainly, as we move forward, there’s going to be autonomous ticketing systems and you’re going to have an absolute elevator experience that is going to seamlessly deliver you to your destination.”

BamBrogan didn’t elaborate on how exactly this would work, but he did mention that part of the process could be through your smartphone.

In Musk’s white paper, he stated that all ticketing and baggage tracking would be handled electronically, effectively doing away with printing boarding passed and luggage labels.

The seats will actually be comfortable.

As for the seating, BamBrogan said the company is working to design passenger pods that are not only comfortable, but also spacious enough to allow people to keep their luggage with them at all times.

The company aims to share some renderings of potential pod designs sometime during the next three months, BamBrogan said.

It will be affordable.

In addition to being comfortable and convenient, the company also wants to make the Hyperloop affordable.

“Any Hyperloop form of transportation is going to be extremely low cost,” BamBrogan said.

“All the value the Hyperloop brings isn’t worth it at a very high price. So our goal is to make Hyperloop very inexpensive to deploy relative to other forms of transportation, so that on top of that low cost you would also get the high-speed extremely safe and energy efficient.”

While BamBrogan would not share a specific price point, Musk’s original white paper suggested a $20 one-way ticket.

Elon Musk: we’ll ultimately be in the position where almost everyone will be able to afford a Tesla

The Internet is still waking up from the madness that was the Model 3 unveiling, but Tesla CEO is – as always – looking towards the future. While in Norway recently, Musk talked about Tesla’s upcoming EV. No, not the 3, but the even cheaper and smaller electric vehicle that will be coming out after the 3 debuts. Musk said the following, talking about the Model 3 (to start):

I’m super excited about being able to produce a car that most people can afford. And there will be future cars that are even more affordable down the road, but, with something like the Model 3, it’s designed such that roughly half of the people will be able to afford the car. Then, with fourth generation and smaller cars, we’ll ultimately be in the position where almost everyone will be able to afford the car.

You can hear it for yourself at about 12 minutes into the video above. It’s worth watching the whole thing, because Musk also mentions fossil fuel subsidies, that mysterious mass transit solution thing and
dying on Mars.

What’s most interesting about Musk’s comments about Tesla’s future is that he may not be around to steer the ship when this next EV arrives. Musk has said that he will remain the Tesla CEO at least until the Model 3 production has ramped up, but after that, who knows. As he said a year and a half ago, „I will never leave Tesla forever, but I may not be CEO forever. Nobody should be CEO forever.“

The brightest minds in AI research – Machine Learning

In AI research,  brightest minds aren’t driven by the next product cycle or profit margin – They want to make AI better, and making AI better doesn’t happen when you keep your latest findings to yourself.

Inside OpenAI, Elon Musk’s Wild Plan to Set Artificial Intelligence Free


THE FRIDAY AFTERNOON news dump, a grand tradition observed by politicians and capitalists alike, is usually supposed to hide bad news. So it was a little weird that Elon Musk, founder of electric car maker Tesla, and Sam Altman, president of famed tech incubator Y Combinator, unveiled their new artificial intelligence company at the tail end of a weeklong AI conference in Montreal this past December.

But there was a reason they revealed OpenAI at that late hour. It wasn’t that no one was looking. It was that everyone was looking. When some of Silicon Valley’s most powerful companies caught wind of the project, they began offering tremendous amounts of money to OpenAI’s freshly assembled cadre of artificial intelligence researchers, intent on keeping these big thinkers for themselves. The last-minute offers—some made at the conference itself—were large enough to force Musk and Altman to delay the announcement of the new startup. “The amount of money was borderline crazy,” says Wojciech Zaremba, a researcher who was joining OpenAI after internships at both Google and Facebook and was among those who received big offers at the eleventh hour.

How many dollars is “borderline crazy”? Two years ago, as the market for the latest machine learning technology really started to heat up, Microsoft Research vice president Peter Lee said that the cost of a top AI researcher had eclipsed the cost of a top quarterback prospect in the National Football League—and he meant under regular circumstances, not when two of the most famous entrepreneurs in Silicon Valley were trying to poach your top talent. Zaremba says that as OpenAI was coming together, he was offered two or three times his market value.

OpenAI didn’t match those offers. But it offered something else: the chance to explore research aimed solely at the future instead of products and quarterly earnings, and to eventually share most—if not all—of this research with anyone who wants it. That’s right: Musk, Altman, and company aim to give away what may become the 21st century’s most transformative technology—and give it away for free.

Zaremba says those borderline crazy offers actually turned him off—despite his enormous respect for companies like Google and Facebook. He felt like the money was at least as much of an effort to prevent the creation of OpenAI as a play to win his services, and it pushed him even further towards the startup’s magnanimous mission. “I realized,” Zaremba says, “that OpenAI was the best place to be.”

That’s the irony at the heart of this story: even as the world’s biggest tech companies try to hold onto their researchers with the same fierceness that NFL teams try to hold onto their star quarterbacks, the researchers themselves just want to share. In the rarefied world of AI research, the brightest minds aren’t driven by—or at least not only by—the next product cycle or profit margin. They want to make AI better, and making AI better doesn’t happen when you keep your latest findings to yourself.

OpenAI is a billion-dollar effort to push AI as far as it will go.
This morning, OpenAI will release its first batch of AI software, a toolkit for building artificially intelligent systems by way of a technology called “reinforcement learning”—one of the key technologies that, among other things, drove the creation of AlphaGo, the Google AI that shocked the world by mastering the ancient game of Go. With this toolkit, you can build systems that simulate a new breed of robot, play Atari games, and, yes, master the game of Go.

But game-playing is just the beginning. OpenAI is a billion-dollar effort to push AI as far as it will go. In both how the company came together and what it plans to do, you can see the next great wave of innovation forming. We’re a long way from knowing whether OpenAI itself becomes the main agent for that change. But the forces that drove the creation of this rather unusual startup show that the new breed of AI will not only remake technology, but remake the way we build technology.

AI Everywhere
Silicon Valley is not exactly averse to hyperbole. It’s always wise to meet bold-sounding claims with skepticism. But in the field of AI, the change is real. Inside places like Google and Facebook, a technology called deep learning is already helping Internet services identify faces in photos, recognize commands spoken into smartphones, and respond to Internet search queries. And this same technology can drive so many other tasks of the future. It can help machines understand natural language—the natural way that we humans talk and write. It can create a new breed of robot, giving automatons the power to not only perform tasks but learn them on the fly. And some believe it can eventually give machines something close to common sense—the ability to truly think like a human.

But along with such promise comes deep anxiety. Musk and Altman worry that if people can build AI that can do great things, then they can build AI that can do awful things, too. They’re not alone in their fear of robot overlords, but perhaps counterintuitively, Musk and Altman also think that the best way to battle malicious AI is not to restrict access to artificial intelligence but expand it. That’s part of what has attracted a team of young, hyper-intelligent idealists to their new project.

OpenAI began one evening last summer in a private room at Silicon Valley’s Rosewood Hotel—an upscale, urban, ranch-style hotel that sits, literally, at the center of the venture capital world along Sand Hill Road in Menlo Park, California. Elon Musk was having dinner with Ilya Sutskever, who was then working on the Google Brain, the company’s sweeping effort to build deep neural networks—artificially intelligent systems that can learn to perform tasks by analyzing massive amounts of digital data, including everything from recognizing photos to writing email messages to, well, carrying on a conversation. Sutskever was one of the top thinkers on the project. But even bigger ideas were in play.

Sam Altman, whose Y Combinator helped bootstrap companies like Airbnb, Dropbox, and Coinbase, had brokered the meeting, bringing together several AI researchers and a young but experienced company builder named Greg Brockman, previously the chief technology officer at high-profile Silicon Valley digital payments startup called Stripe, another Y Combinator company. It was an eclectic group. But they all shared a goal: to create a new kind of AI lab, one that would operate outside the control not only of Google, but of anyone else. “The best thing that I could imagine doing,” Brockman says, “was moving humanity closer to building real AI in a safe way.”

Musk is one of the loudest voices warning that we humans could one day lose control of systems powerful enough to learn on their own.
Musk was there because he’s an old friend of Altman’s—and because AI is crucial to the future of his various businesses and, well, the future as a whole. Tesla needs AI for its inevitable self-driving cars. SpaceX, Musk’s other company, will need it to put people in space and keep them alive once they’re there. But Musk is also one of the loudest voices warning that we humans could one day lose control of systems powerful enough to learn on their own.

The trouble was: so many of the people most qualified to solve all those problems were already working for Google (and Facebook and Microsoft and Baidu and Twitter). And no one at the dinner was quite sure that these thinkers could be lured to a new startup, even if Musk and Altman were behind it. But one key player was at least open to the idea of jumping ship. “I felt there were risks involved,” Sutskever says. “But I also felt it would be a very interesting thing to try.”

Breaking the Cycle
Emboldened by the conversation with Musk, Altman, and others at the Rosewood, Brockman soon resolved to build the lab they all envisioned. Taking on the project full-time, he approached Yoshua Bengio, a computer scientist at the University of Montreal and one of founding fathers of the deep learning movement. The field’s other two pioneers—Geoff Hinton and Yann LeCun—are now at Google and Facebook, respectively, but Bengio is committed to life in the world of academia, largely outside the aims of industry. He drew up a list of the best researchers in the field, and over the next several weeks, Brockman reached out to as many on the list as he could, along with several others.

Many of these researchers liked the idea, but they were also wary of making the leap. In an effort to break the cycle, Brockman picked the ten researchers he wanted the most and invited them to spend a Saturday getting wined, dined, and cajoled at a winery in Napa Valley. For Brockman, even the drive into Napa served as a catalyst for the project. “An underrated way to bring people together are these times where there is no way to speed up getting to where you’re going,” he says. “You have to get there, and you have to talk.” And once they reached the wine country, that vibe remained. “It was one of those days where you could tell the chemistry was there,” Brockman says. Or as Sutskever puts it: “the wine was secondary to the talk.”

By the end of the day, Brockman asked all ten researchers to join the lab, and he gave them three weeks to think about it. By the deadline, nine of them were in. And they stayed in, despite those big offers from the giants of Silicon Valley. “They did make it very compelling for me to stay, so it wasn’t an easy decision,” Sutskever says of Google, his former employer. “But in the end, I decided to go with OpenAI, partly of because of the very strong group of people and, to a very large extent, because of its mission.”

The deep learning movement began with academics. It’s only recently that companies like Google and Facebook and Microsoft have pushed into the field, as advances in raw computing power have made deep neural networks a reality, not just a theoretical possibility. People like Hinton and LeCun left academia for Google and Facebook because of the enormous resources inside these companies. But they remain intent on collaborating with other thinkers. Indeed, as LeCun explains, deep learning research requires this free flow of ideas. “When you do research in secret,” he says, “you fall behind.”

As a result, big companies now share a lot of their AI research. That’s a real change, especially for Google, which has long kept the tech at the heart of its online empire secret. Recently, Google open sourced the software engine that drives its neural networks. But it still retains the inside track in the race to the future. Brockman, Altman, and Musk aim to push the notion of openness further still, saying they don’t want one or two large corporations controlling the future of artificial intelligence.

The Limits of Openness
All of which sounds great. But for all of OpenAI’s idealism, the researchers may find themselves facing some of the same compromises they had to make at their old jobs. Openness has its limits. And the long-term vision for AI isn’t the only interest in play. OpenAI is not a charity. Musk’s companies that could benefit greatly the startup’s work, and so could many of the companies backed by Altman’s Y Combinator. “There are certainly some competing objectives,” LeCun says. “It’s a non-profit, but then there is a very close link with Y Combinator. And people are paid as if they are working in the industry.”

According to Brockman, the lab doesn’t pay the same astronomical salaries that AI researchers are now getting at places like Google and Facebook. But he says the lab does want to “pay them well,” and it’s offering to compensate researchers with stock options, first in Y Combinator and perhaps later in SpaceX (which, unlike Tesla, is still a private company).

Brockman insists that OpenAI won’t give special treatment to its sister companies.
Nonetheless, Brockman insists that OpenAI won’t give special treatment to its sister companies. OpenAI is a research outfit, he says, not a consulting firm. But when pressed, he acknowledges that OpenAI’s idealistic vision has its limits. The company may not open source everything it produces, though it will aim to share most of its research eventually, either through research papers or Internet services. “Doing all your research in the open is not necessarily the best way to go. You want to nurture an idea, see where it goes, and then publish it,” Brockman says. “We will produce lot of open source code. But we will also have a lot of stuff that we are not quite ready to release.”

Both Sutskever and Brockman also add that OpenAI could go so far as to patent some of its work. “We won’t patent anything in the near term,” Brockman says. “But we’re open to changing tactics in the long term, if we find it’s the best thing for the world.” For instance, he says, OpenAI could engage in pre-emptive patenting, a tactic that seeks to prevent others from securing patents.

But to some, patents suggest a profit motive—or at least a weaker commitment to open source than OpenAI’s founders have espoused. “That’s what the patent system is about,” says Oren Etzioni, head of the Allen Institute for Artificial Intelligence. “This makes me wonder where they’re really going.”

The Super-Intelligence Problem
When Musk and Altman unveiled OpenAI, they also painted the project as a way to neutralize the threat of a malicious artificial super-intelligence. Of course, that super-intelligence could arise out of the tech OpenAI creates, but they insist that any threat would be mitigated because the technology would be usable by everyone. “We think its far more likely that many, many AIs will work to stop the occasional bad actors,” Altman says.

But not everyone in the field buys this. Nick Bostrom, the Oxford philosopher who, like Musk, has warned against the dangers of AI, points out that if you share research without restriction, bad actors could grab it before anyone has ensured that it’s safe. “If you have a button that could do bad things to the world,” Bostrom says, “you don’t want to give it to everyone.” If, on the other hand, OpenAI decides to hold back research to keep it from the bad guys, Bostrom wonders how it’s different from a Google or a Facebook.

If you share research without restriction, bad actors could grab it before anyone has ensured that it’s safe.
He does say that the not-for-profit status of OpenAI could change things—though not necessarily. The real power of the project, he says, is that it can indeed provide a check for the likes of Google and Facebook. “It can reduce the probability that super-intelligence would be monopolized,” he says. “It can remove one possible reason why some entity or group would have radically better AI than everyone else.”

But as the philosopher explains in a new paper, the primary effect of an outfit like OpenAI—an outfit intent on freely sharing its work—is that it accelerates the progress of artificial intelligence, at least in the short term. And it may speed progress in the long term as well, provided that it, for altruistic reasons, “opts for a higher level of openness than would be commercially optimal.”

“It might still be plausible that a philanthropically motivated R&D funder would speed progress more by pursuing open science,” he says.

Like Xerox PARC
In early January, Brockman’s nine AI researchers met up at his apartment in San Francisco’s Mission District. The project was so new that they didn’t even have white boards. (Can you imagine?) They bought a few that day and got down to work.

Brockman says OpenAI will begin by exploring reinforcement learning, a way for machines to learn tasks by repeating them over and over again and tracking which methods produce the best results. But the other primary goal is what’s called “unsupervised learning”—creating machines that can truly learn on their own, without a human hand to guide them. Today, deep learning is driven by carefully labeled data. If you want to teach a neural network to recognize cat photos, you must feed it a certain number of examples—and these examples must be labeled as cat photos. The learning is supervised by human labelers. But like many others researchers, OpenAI aims to create neural nets that can learn without carefully labeled data.

“If you have really good unsupervised learning, machines would be able to learn from all this knowledge on the Internet—just like humans learn by looking around—or reading books,” Brockman says.

He envisions OpenAI as the modern incarnation of Xerox PARC, the tech research lab that thrived in the 1970s. Just as PARC’s largely open and unfettered research gave rise to everything from the graphical user interface to the laser printer to object-oriented programing, Brockman and crew seek to delve even deeper into what we once considered science fiction. PARC was owned by, yes, Xerox, but it fed so many other companies, most notably Apple, because people like Steve Jobs were privy to its research. At OpenAI, Brockman wants to make everyone privy to its research.

This month, hoping to push this dynamic as far as it will go, Brockman and company snagged several other notable researchers, including Ian Goodfellow, another former senior researcher on the Google Brain team. “The thing that was really special about PARC is that they got a bunch of smart people together and let them go where they want,” Brockman says. “You want a shared vision, without central control.”

Giving up control is the essence of the open source ideal. If enough people apply themselves to a collective goal, the end result will trounce anything you concoct in secret. But if AI becomes as powerful as promised, the equation changes. We’ll have to ensure that new AIs adhere to the same egalitarian ideals that led to their creation in the first place. Musk, Altman, and Brockman are placing their faith in the wisdom of the crowd. But if they’re right, one day that crowd won’t be entirely human.

Tesla’s Model 3 Reservations Rise to 400,000

Eager Tesla customers continue to reserve the Model 3, despite the ballooning wait times.

Reservations for Tesla’s recently unveiled, mainstream electric car, the Model 3, continue to climb.

According to a speech from Tesla’s Vice President of Business Development, Diarmuid O’Connell, this week, reservations for the car are now approaching 400,000.

That’s an eye-popping figure for an electric car that’s only been available to reserve for about two weeks and won’t start shipping until the end of 2017. Many of those reservations were made before the car was even unveiled on March 31. Now Tesla needs to figure out how to make and deliver those cars on time and budget.

Many of the later orders of the Model 3 likely won’t be fulfilled until 2019, or even into 2020 (four years from now).That’s assuming Tesla will remain on track to start shipping the car at the end of next year, too.

A driveable prototype of Tesla's Model 3.
A driveable prototype of Tesla’s Model 3. Katie Fehrenbacher/Fortune

To get that volume of cars made and delivered on time, Tesla TSLA -2.56% could have to change the way it makes its cars considerably. Tesla has only delivered a little over 100,000 cars in total over its lifetime. During O’Connell’s speech at a conference in Amsterdam, he said the rapid reservation rate gives Tesla the “visibility” and “confidence” into what it would take to build the car.

Tesla CEO Elon Musk tweeted the day after revealing the Model 3 for the first time (when the car had close to 200,000 reservations) that Tesla is “definitely going to need to rethink production planning.” Tesla will likely have to expand production at both its Fremont, Calif. factory more quickly than expected, and it will soon have to start producing a greater number of batteries at its massive battery factory still under construction outside of Reno, Nevada.

O’Connell said that Tesla is “looking at ways to amplify early production.” The company is investigating possible ways to scale up initial investments and ramp up more quickly than previously anticipated. Tesla plans to use lessons learned from the difficulties it had with manufacturing the Model X, Tesla’s SUV electric car.

That car was delayed for years, and it faced slow production at the end of 2015 and into early 2016. The company has admitted hubris for the Model X in trying to fit in too many complex features into the first version of the car.

According to estimates from Cairn Energy Research Advisors, Tesla could ship a little over 400,000 of its Model 3 cars by the end of 2020. But before 2020, production of Model 3 could likely be constrained. For example, Tesla could ship 12,200 Model 3 cars in its first production year in 2017, and another 64,660 Model 3 cars in 2018.

During O’Connell’s speech, he boasted reservations for the Model 3 “have exceeded all of our expectations as far as the rate at which we received reservations,” further describing the Model 3 as “the car for which the company was really set up to build.”

O’Connell suggested that the great demand for the Model 3 delivers a message to the rest of the auto industry that there is “incredible demand” for great electric vehicles out there. In addition, the massive demand refutes the point that other automakers have made that no one wants electric cars, he argued.

To make a reservation for a Model 3 car, Tesla customers only have to put down a fully refundable deposit of $1,000. So it’s unclear how many of the reservation holders would turn into Model 3 buyers.

If all 400,000 reservation holders bought $35,000 Model 3 cars, Tesla would have booked $14 billion in orders. That’s an unprecedented sum—not just in the auto industry, but for a launch of a product in general.