Entrepreneur Elon Musk uses a specific five-step algorithm when leading his teams at Tesla and SpaceX. This mechanism was described by the company's former president John McNeil in his book “The Algorithm“, reports The Wall Street Journal.
The algorithm consists of five steps:
Questioning every requirement;
Removing all unnecessary steps (or details) in the process;
Simplifying and optimizing;
Speeding up the cycle;
Automating.
According to McNeil, who left the company in 2018, the problem-solving structure was so banal that one of the company's executives suggested calling it an algorithm to better communicate this approach to all employees.
The algorithm is based on first-principles thinking, which Musk favors, McNeil said. “First-principles thinking to me is finding the essence of a problem in its components – breaking the problem down to the atomic level“, he said.
The new Terafab project has all the hallmarks of that algorithm, the newspaper notes. As the newspaper notes, part of SpaceX's recent strategy for artificial intelligence has been to move to building data centers in space, where Musk says solar energy is abundant.
The plan, however, has been hampered by a shortage of chips. Musk says global suppliers are producing only about 2% of what is needed. In addition, the pace of new chip creation is limited.
“Most business people would probably say they can just wait. Not Musk, the publication writes.
“This pace is far below what we want, so either we build Terafab or we don't have chips, and we need them,“ Musk said.
That's the algorithm, McNeil explained. “Elon has three businesses that depend on chips, and he understands that this dependence is a single point of failure,“ he said.
The key ingredient in the algorithm, McNeil noted, is a sense of urgency in daily operations. For Musk, that means focusing on one or two critical problems and solving them week after week.
“I sat in those meetings and thought, “I'm pretty sure our competitors' CEOs don't do weekly engineering reviews and push their companies to move this fast,“ McNeil said.
Speaking of the Terafab launch, Musk said Tesla, along with SpaceX and xAI, will build the world's largest microchip manufacturing plant. Tesla noted that 100-200 GW of capacity is needed just for the Optimus humanoid robots and another terawatt to launch solar-powered AI satellites into space.
The project is estimated to cost $25 billion, with the goal of producing 100 to 200 billion AI and memory chips per year. If the Terafab project is successful, Tesla, SpaceX and xAI will no longer have to compete with Microsoft, Google and Amazon for the production capacity of TSMC, the world's largest chipmaker, Forbes noted.