WSJ Tech News Briefing: The Tesla Die-Hards Who Are Calling It Quits

Release Date: March 24, 2025

Host: Victoria Craig
Producer: Jess Jupiter
Supervising Producer: Matthew Walls

1. Tesla Stock Sell-Off: Die-Hard Investors Exit

Overview: The episode delves into the significant downturn in Tesla's stock performance, which has plummeted nearly 40% since the beginning of the year. This decline has led to a wave of seasoned Tesla investors reevaluating their positions, despite CEO Elon Musk's encouragement to hold onto shares.

Elon Musk's Optimistic Outlook: Elon Musk addressed Tesla employees during a recent all-hands meeting, urging them to retain their stock holdings amidst the volatility. He presented a five-year vision that hinges on achieving global regulatory approval for autonomous vehicles, envisioning a future where people can embark on road trips without ever touching a steering wheel. Musk emphasized the transformative potential of Tesla's expanding vehicle fleet, stating:

"It's very difficult for like, you know, people in the stock market... to imagine a future where suddenly a 10 million vehicle fleet has 5 to 10 times the usefulness. It does not compute, but it will compute in the future. So what I'm saying is hang on to your stock."
— Elon Musk at 01:29

Investor Sentiment and Reasons for Selling: Hannah Aaron Lange, WSJ reporter, interviews several long-term Tesla investors who are now parting ways with the stock. Key reasons include:

• Political Disagreements: Some investors are uncomfortable with Musk's political affiliations and his role in the Trump administration, which contrasts with the environmentally focused ethos that initially drew them to Tesla.

• Musk's Public Persona: The increasingly erratic and politically charged behavior of Musk has unsettled investors who expected a more stable leadership figure.

• Impact on Brand and Sales: Concerns that Musk's political engagements might alienate customers or distract from Tesla's core business, potentially harming sales and the company's reputation.

"If you involve yourself deeply in politics, you're going to alienate some customers... Musk's prominent political Persona is hurting the Tesla brand."
— Hannah Aaron Lange at 05:38

Market Dynamics and Tesla-Specific Challenges: The decline in Tesla stock is also attributed to broader market trends affecting the "Magnificent Seven" tech stocks, which have struggled due to risk reassessments, economic uncertainties, and skepticism about AI's profitability. Additionally, Tesla faces unique challenges such as:

• Sales Declines: Recent setbacks in sales figures have raised investor concerns.

• Intensifying Competition: The electric vehicle (EV) market is becoming increasingly crowded, with more competitors entering the space.

• Product Recalls: A significant recall of Tesla's Cybertruck models due to safety issues has further dented investor confidence.

Government Intervention and Its Limited Impact: Despite efforts from the Trump administration to boost Tesla’s profile—such as showcasing Tesla vehicles at the White House and endorsements from government officials—the stock has not seen a sustained positive trajectory.

"It doesn't appear to have turned around things for Tesla quite yet, at least in regards to its share price."
— Hannah Aaron Lange at 05:12

Retail Investor Loyalty: Despite the sell-off, there remains a faction of retail investors who continue to support Tesla, often purchasing shares during price dips driven by their unwavering belief in the company's long-term potential.

2. Russo Brothers Harness AI to Empower Creativity in Hollywood

Introduction: Transitioning from automotive technology to the entertainment industry, the episode highlights the innovative approach of the Russo brothers—directors behind blockbuster films like "Endgame." Instead of viewing artificial intelligence (AI) as a threat to creative jobs, they are integrating it as a collaborative tool within their production studio, Agbo.

Collaborative AI Integration: Christopher Mims interviews the Russo brothers about their strategy to utilize AI in enhancing, rather than replacing, human creativity. Their focus is on leveraging AI to accelerate the creative process, serving as a companion to creatives in brainstorming and idea generation.

"AI can be a companion when you are coming up with new ideas. There is research to back that up... When they partner with an AI, they will beat both humans and AI on its own."
— Christopher Mims at 07:40

Embracing AI Hallucination: Contrary to the common industry push to minimize AI inaccuracies, the Russo brothers intentionally embrace AI's tendency to "hallucinate" or generate creative, albeit fictional, content. They believe this characteristic can be harnessed to foster novel ideas and innovation.

"Why don't we just lean into that? Like, why don't we use it as a tool to help us come up with new ideas and be creative, rather than trying to do what all these other companies are doing..."
— Russo Brothers at 09:13

Cost Efficiency and Transmedia Strategy: A pivotal aspect of their approach is reducing production costs through the reuse of digital assets across various media platforms. By creating versatile 3D models, sets, characters, and voices, they aim to streamline production processes and facilitate content sharing between movies, video games, theme parks, and future VR mediums.

"The whole idea is it's called transmedia... The whole idea is it's called transmedia. Perhaps there's a future in which Hollywood and video game companies are more closely aligned."
— Russo Brothers at 09:58

Industry Collaboration and Investment: The Russo brothers have garnered significant investment, including a $400 million stake from a Japanese video game maker in 2022, signaling a move towards greater convergence between Hollywood and the gaming industry. Their recent collaboration with Netflix on "The Electric State"—which reportedly cost $320 million—underscores their commitment to high-budget, transmedia projects.

Conclusion

In this episode of WSJ Tech News Briefing, Victoria Craig and her team provide an insightful exploration into the current challenges facing Tesla, highlighting the complex interplay between leadership persona, market dynamics, and investor sentiment. Simultaneously, the episode sheds light on the Russo brothers' forward-thinking utilization of AI in the entertainment industry, presenting a hopeful narrative that technology can augment rather than diminish human creativity. Together, these discussions offer a comprehensive view of how technology is reshaping both the automotive and creative sectors.

Notable Quotes with Timestamps:

• Elon Musk on Holding Stocks:
  "It's very difficult for... most people, to imagine a future where suddenly a 10 million vehicle fleet has 5 to 10 times the usefulness. It does not compute, but it will compute in the future. So what I'm saying is hang on to your stock."
  — Elon Musk at [01:29]

• Investor Concerns About Politics Influencing Tesla:
  "If you involve yourself deeply in politics, you're going to alienate some customers... Musk's prominent political Persona is hurting the Tesla brand."
  — Hannah Aaron Lange at [05:38]

• Russo Brothers on AI as a Creative Partner:
  "AI can be a companion when you are coming up with new ideas... When they partner with an AI, they will beat both humans and AI on its own."
  — Christopher Mims at [07:40]

• Embracing AI Hallucination for Creativity:
  "Why don't we just lean into that?... use it as a tool to help us come up with new ideas and be creative, rather than trying to do what all these other companies are doing..."
  — Russo Brothers at [09:13]

• Transmedia Strategy for Cost Efficiency:
  "Perhaps there's a future in which Hollywood and video game companies are more closely aligned."
  — Russo Brothers at [09:58]

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