Elon Musk appeared in an interview with US Senator Ted Cruz as part of a YouTube podcast. The discussion touched on federal government spending, magic money computers, nonprofit funding, and Musk’s perspectives on artificial intelligence. 

Cruz started off by stating that Musk had made big waves since the beginning of the new administration. The senator described Musk as someone who has had “an impact” that few others could match in so short a time. 

Musk, whose actions have gained significant public attention, acknowledged that recent weeks have been high-profile. He said, “Holy crap… never a dull moment.” 

Cruz asked Musk to compare his initial challenges when he took over D.O.G.E. He said, “Which was worse—the mess you found at Twitter or the mess you found in the federal government?” Musk said that competing with the federal government was much tougher. He added, “It is worse than I expected. But on the plus side, that means there’s more opportunity for improvement.” 

Shortly afterward, Musk described the government’s waste-to-fraud ratio as “80% waste, 20% fraud,” then mentioned a need to look on the bright side: “If it was a well-run ship, it would be very difficult to improve.” 

In the latter part of the interview, the conversation focused on identifying such improvements in federal expenditures.

Magic-money computers in government agencies

Musk clarified that the waste is not difficult to spot. Describing the issue, he said, “Most of what we do is not Sherlock-Holmes-level detective work. It’s very obvious, basic stuff.” 

He revealed that each federal department showed similar patterns. He said, “In every government department—I say every because we’ve not yet found a single exception—there are far too many software licenses and media subscriptions, more than there are humans in the department.”

Cruz gave a hypothetical example, mentioning an agency with 15,000 employees and 30,000 licenses. Musk confirmed this was not unusual. He also cited departments paying for media subscriptions that no one in the department was using. At another point, Musk touched upon credit card usage, explaining that “we found there are twice as many credit cards as there are humans… and these are $10,000-limit cards.”

When Ferguson asked if this might be “the biggest money-laundering scheme in the history of the world” or mere incompetence, Musk offered a blended response. He said that the ratio of waste to fraud is 80 to 20 but with certain grey areas. He gave an example of payments leaving the Treasury with no record or explanation, sometimes because a contract had never been shut off. Musk said, “Someone forgot to shut off that contract, so the company kept getting money. Now, is that waste or fraud? Both.”

Cruz then brought up a $1.9 billion payment to what Musk called a “fake NGO” connected to political figures. Musk labeled it “utter insanity,” adding, “That’s just corrupt. I think that’s paying off cronies.” 

In his view, certain nonprofit organizations were receiving large sums without providing tangible services. Musk singled out an arrangement he believed was “basically paying $2 billion for maybe 100 appliances… that’s a very expensive toaster.”

As part of the problem, Musk noted the lax oversight after funds are transferred: “The government can give money to a so-called nonprofit with very few controls, and there’s no auditing.” He explained that such nonprofits then use those funds for personal gains like “jets and homes,” all at the taxpayer’s expense.

Cruz then moved the discussion to “magic money computers.” He said that he had never heard the term. Musk clarified it by saying that magic money is “any computer which can just make money out of thin air.” He said that there are likely 14 magic money computers in government agencies. Most of these are at the Treasury Department, but also at HHS, State, and the Department of Defense. According to him, these systems tend to send money out of nothing.

Musk argued that to fix these spending irregularities, direct access to the computer systems is critical, because they drive every transaction: “You have to look at the actual electronic money flows.” 

Cruz concurred, recalling Musk’s earlier statement before the election: “All I want is the login for every computer.” 

Musk explained that it was essential because computers run the government. He added, “That’s what you need to look at to reconcile the databases and get rid of waste and fraud.”

Cruz noted that few in Congress consider an alternative route, preferring to request reports instead. By contrast, Musk said that is insufficient. He stated, “If you’re just asking a human, who asks another human, who asks another human, who finally asks a contractor to do a query, you’ll never see the whole picture.”

D.O.G.E expects to cut a trillion dollars of waste by FY 2026

Ferguson asked about the scale of the cuts or improvements Musk expected. Musk said that he’s confident that D.O.G.E will cut a trillion dollars of waste and fraud by fiscal year 2026. He noted that this assumes nothing impedes the process and that they can operate with full transparency.

Cruz then raised Musk’s sudden transition from a “hero to the left” five years ago to a high-profile target. He observed that Musk was once widely celebrated for his involvement in electric cars and space travel. Musk replied, “Yes, I appear to be number two,” explaining that he has seen “Trump Derangement Syndrome and Elon Derangement Syndrome.” Cruz added that he believed many on the left hated Musk “after Donald Trump, more than any person on Earth.”

Addressing why he attracts so much hate, Musk attributed it to his efforts in government cost-cutting: “They hate me because DOGE is being effective, and the fraud we’re seeing is overwhelmingly on the left.” 

He then gave his remarks on Social Security and Medicare payments, along with unemployment and disability. According to Musk, these payments often go to illegal immigrants. He added that these amount to over a hundred billion dollars, or perhaps 200 billion dollars. He alleged, “By using entitlement fraud, the Democrats have been able to attract and retain vast numbers of illegal immigrants.” Cruz asserted that those illegals may eventually be legalized, further securing certain states. Musk claimed that, in his view, these policies point to “a permanent deep-blue socialist state.”

The U.S. may lose the AI race if it fails to maintain control of AI chip fabrication

Their conversation later shifted to artificial intelligence and potential global competition. Cruz asked, “In 10 years, how is life going to be different because of AI?” Musk replied that within a decade, “AI will probably be able to do anything better than a human can, cognitively,” and that it would be “smarter than the smartest human.” He also predicted a large number of robots: “Probably billions of humanoid robots.”

Cruz brought up concerns about “Killer Robots annihilating humanity,” referencing concepts akin to Skynet. Musk estimated, “Maybe 10% or 20% likely, on a 5-to-10-year timeframe.” He reminded listeners that “the glass is 80 or 90% full,” meaning he sees an 80% or 90% chance AI leads to greater prosperity.

Cruz also asked which country might win the AI race. Musk answered that, for a few years, “America is likely to win,” but the deciding factor is “who controls the AI chip fabrication.” He said nearly all advanced AI chip factories—or “fabs”—are in Taiwan and warned that if China were to “invade Taiwan in the near term, the world would be cut off from advanced AI chips.” He believed this matter was “essential for national security.”

Cruz closed by asking Musk about his legacy after he’s gone. Musk replied, “If SpaceX got humans to Mars, that’s what they would remember me for, even a hundred or a thousand years from now.” When asked if he planned to go to space himself, Musk stated, “I’d like to go to Mars at some point… People have asked if I want to die on Mars. I say yes, just not on impact.”

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