Why Elon Musk’s Boring Company is finding that traffic is tough to fix

Published

4 years ago

July 20, 2021

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Elon Musk is famous for electric vehicles, reusable rockets, and satellites that can beam down high-speed internet to the most remote regions of the planet. But in 2016, he set his sights lower. The idea was to create a company that would solve traffic by building a system of underground tunnels.

Musk founded The Boring Company in 2017. In a video released that same year, the Boring Company teased a system in which cars and public transportation pods are lowered underground by metal platforms and proceed to zoom through tunnels at 124 mph, unimpeded by pesky traffic. The problem with tunnels, Musk said during an event unveiling the company’s first demo tunnel in 2018, was that they take a long time to build and are very expensive.

“The LA subway extension that [was] just completed cost $2 billion for two and a half miles. There was a subway extension in New York that I think cost $2 billion for a mile,” Musk said during the event. “So clearly, something needs to be done to revolutionize tunneling technology. We need to be able to build tunnels way faster and for a lot less money.”

At the event, reporters were taken on test rides through the tunnel at speeds of up to 50 mph, much slower than the 150 mph that Musk envisioned. The ride was also pretty bumpy, as the alignment wheels attached to the Teslas bounced off the side track walls.

Though still rudimentary, the demo tunnel inspired confidence in investors and customers alike. Early on, the Boring Company was largely floated by Musk, but $1 million also came from the sale of 50,000 hats and another $10 million from the sale of 20,000 company-branded flamethrowers. Musk even tried to sell dirt excavated from the tunnel as Lego-like bricks.

In 2019, the Boring Company brought in its first outside investment. The $120 million funding round came shortly after the company landed its first paying customer: the Las Vegas Convention and Visitors Authority.

The Las Vegas Convention Center Loop opened to the public in June. The 1.7-mile stretch of underground road cost the convention authority $52 million and took the Boring Company about 18 months to complete. It marked the company’s first completed public project, but many of its other proposed projects have hit dead ends.

“Many construction professionals will tell you that, you know, it’s not the speed of the tunnel boring that you need to worry about. It’s the environmental review. It’s the bureaucratic procedure. It’s the permits,” says NBC News’ Cyrus Farivar, who reported on some of the Boring Company’s stalled projects.

Despite the challenges, cities such as Miami and Fort Lauderdale, Florida, seem eager to partner with the Boring Company.

“We have now spoken with the Boring Company about building a 2.2-mile tunnel from our railroad station, called the Bright Line Station, which is in the middle of the city, all the way to the beach,” Fort Lauderdale Mayor Dean Trantalis told CNBC. “And it would be two tunnels, one going east, one going west. And the business model is that you have Tesla vehicles with drivers that ferry you under the streets, through to the beach, completely eliminating all the traffic.”

Trantalis said that rough estimates from the Boring Company put construction costs between $10 million and $15 million per mile, not including the cost of the stations. Details are still being worked out, but users of the tunnel would likely pay a fee for the service. The city is taking other bids for the project, but Trantalis said Fort Lauderdale already worked out a lot of the bureaucratic hang-ups that caused the proposed Boring Company projects to falter in other cities.

Watch the video above to find out more.

Technology

Tech founders call on Sequoia Capital to denounce VC Shaun Maguire’s Mamdani comments

Published

6 hours ago

July 7, 2025

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Tech founders call on Sequoia Capital to denounce VC Shaun Maguire's Mamdani comments

Almost 600 people have signed an open letter to leaders at venture firm Sequoia Capital after one of its partners, Shaun Maguire, posted what the group described as a “deliberate, inflammatory attack” against the Muslim Democratic mayoral candidate in New York City.

Maguire, a vocal supporter of President Donald Trump, posted on X over the weekend that Zohran Mamdani, who won the Democratic primary last month, “comes from a culture that lies about everything” and is out to advance “his Islamist agenda.”

The post had 5.3 million views as of Monday afternoon. Maguire, whose investments include Elon Musk’s SpaceX and X as well as artificial intelligence startup Safe Superintelligence, also published a video on X explaining the remark.

Those signing the letter are asking Sequoia to condemn Maguire’s comments and apologize to Mamdani and Muslim founders. They also want the firm to authorize an independent investigation of Maguire’s behavior in the past two years and post “a zero-tolerance policy on hate speech and religious bigotry.”

They are asking the firm for a public response by July 14, or “we will proceed with broader public disclosure, media outreach and mobilizing our networks to ensure accountability,” the letter says.

Sequoia declined to comment. Maguire didn’t respond to a request for comment, but wrote in a post about the letter on Wednesday that, “You can try everything you want to silence me, but it will just embolden me.”

Among the signees are Mudassir Sheikha, CEO of ride-hailing service Careem, and Amr Awadallah, CEO of AI startup Vectara. Also on the list is Abubakar Abid, who works in machine learning Hugging Face, which is backed by Sequoia, and Ahmed Sabbah, CEO of Telda, a financial technology startup that Sequoia first invested in four years ago.

At least three founders of startups that have gone through startup accelerator program Y Combinator added their names to the letter.

Sequoia as a firm is no stranger to politics. Doug Leone, who led the firm until 2022 and remains a partner, is a longtime Republican donor, who supported Trump in the 2024 election. Following Trump’s victory in November, Leone posted on X, “To all Trump voters: you no longer have to hide in the shadows…..you’re the majority!!”

By contrast, Leone’s predecessor, Mike Moritz, is a Democratic megadonor, who criticized Trump and, in August, slammed his colleagues in the tech industry for lining up behind the Republican nominee. In a Financial Times opinion piece, Moritz wrote Trump’s tech supporters were “making a big mistake.”

“I doubt whether any of them would want him as part of an investment syndicate that they organised,” wrote Moritz, who stepped down from Sequoia in 2023, over a decade after giving up a management role at the firm. “Why then do they dismiss his recent criminal conviction as nothing more than a politically inspired witch-hunt over a simple book-keeping error?”

Neither Leone nor Moritz returned messages seeking comment.

Roelof Botha, Sequoia’s current lead partner, has taken a more neutral stance. Botha said at an event last July that Sequoia as a partnership doesn’t “take a political point of view,” adding that he’s “not a registered member of either party.” Boelof said he’s “proud of the fact that we’ve enabled many of our partners to express their respected individual views along the way, and given them that freedom.”

Maguire has long been open with his political views. He said on X last year that he had “just donated $300k to President Trump.”

Mamdani, a self-described democratic socialist, has gained the ire of many people in tech and in the business community more broadly since defeating former New York Gov. Andrew Cuomo in the June primary.

— CNBC’s Ari Levy contributed to this report.

WATCH: SpaceX valuation is maybe even conservative, says Sequoia’s Shaun Maguire

Technology

Samsung expects second-quarter profits to more than halve as it struggles to capture AI demand

Published

7 hours ago

July 7, 2025

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Samsung expects second-quarter profits to more than halve as it struggles to capture AI demand

Samsung signage during the Nvidia GPU Technology Conference (GTC) in San Jose, California, US, on Thursday, March 20, 2025.

David Paul Morris | Bloomberg | Getty Images

South Korea’s Samsung Electronics on Tuesday forecast a 56% fall in profits for the second as the company struggles to capture demand from artificial intelligence chip leader Nvidia.

The memory chip and smartphone maker said in its guidance that operating profit for the quarter ending June was projected to be around 4.6 trillion won, down from 10.44 trillion Korean won year over year.

The figure is a deeper plunge compared to smart estimates from LSEG, which are weighted toward forecasts from analysts who are more consistently accurate.

According to the smart estimates, Samsung was expected to post an operating profit of 6.26 trillion won ($4.57 billion) for the quarter. Meanwhile, Samsung projected its revenue to hit 74 trillion won, falling short of LSEG smart estimates of 75.55 trillion won.

Samsung is a leading player in the global smartphone market and is also one of the world’s largest makers of memory chips, which are utilized in devices such as laptops and servers.

However, the company has been falling behind competitors like SK Hynix and Micron in high-bandwidth memory chips — an advanced type of memory that is being deployed in AI chips.

“The disappointing earnings are due to ongoing operating losses in the foundry business, while the upside in high-margin HBM business remains muted this quarter,” MS Hwang, Research Director at Counterpoint Research, said about the earnings guidance.

SK Hynix, the leader in HBM, has secured a position as Nvidia’s key supplier. While Samsung has reportedly been working to get the latest version of its HBM chips certified by Nvidia, a report from a local outlet suggests these plans have been pushed back to at least September.

The company did not respond to a request for comment on the status of its deals with Nvidia.

Ray Wang, Research Director of Semiconductors, Supply Chain and Emerging Technology at Futurum Group told CNBC that it is clear that Samsung has yet to pass Nvidia’s qualification for its most advanced HBM.

“Given that Nvidia accounts for roughly 70% of global HBM demand, the delay meaningfully caps near-term upside,” Wang said. He noted that while Samsung has secured some HBM supply for AI processors from AMD, this win is unlikely to contribute to second-quarter results due to the timing of production ramps.

Meanwhile, Samsung’s chip foundry business continues to face weak orders and serious competition from Taiwan Semiconductor Manufacturing Company, Wang added.

Reuters reported in September that Samsung had instructed its subsidiaries worldwide to cut 30% of staff in some divisions, citing sources familiar with the matter.

Technology

Waymo to begin testing in Philadelphia with safety drivers behind the wheel

Published

10 hours ago

July 7, 2025

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Waymo to begin testing in Philadelphia with safety drivers behind the wheel

A Waymo autonomous self-driving Jaguar electric vehicle sits parked at an EVgo charging station in Los Angeles, California, on May 15, 2024.

Patrick T. Fallon | AFP | Getty Images

Waymo said it will begin testing in Philadelphia, with a limited fleet of vehicles and human safety drivers behind the wheel.

“This city is a National Treasure,” Waymo wrote in a post on X on Monday. “It’s a city of love, where eagles fly with a gritty spirit and cheese that spreads and cheese that steaks. Our road trip continues to Philly next.”

The Alphabet-owned company confirmed to CNBC that it will be testing in Pennsylvania’s largest city through the fall, adding that the initial fleet of cars will be manually driven through the more complex parts of Philadelphia, including downtown and on freeways.

“Folks will see our vehicles driving at all hours throughout various neighborhoods, from North Central to Eastwick, and from University City to as far east as the Delaware River,” a Waymo spokesperson said.

With its so-called road trips, Waymo seeks to collect mapping data and evaluate how its autonomous technology, Waymo Driver, performs in new environments, handling traffic patterns and local infrastructure. Road trips are often used a way for the company to gauge whether it can potentially offer a paid ride share service in a particular location.

The expanded testing, which will go through the fall, comes as Waymo aims for a broader rollout. Last month, the company announced plans to drive vehicles manually in New York for testing, marking the first step toward potentially cracking the largest U.S. city. Waymo applied for a permit with the New York City Department of Transportation to operate autonomously with a trained specialist behind the wheel in Manhattan. State law currently doesn’t allow for such driverless operations.

Waymo One provides more than 250,000 paid trips each week across Phoenix, San Francisco, Los Angeles, and Austin, Texas, and is preparing to bring fully autonomous rides to Atlanta, Miami, and Washington, D.C., in 2026.

Alphabet has been under pressure to monetize artificial intelligence products as it bolsters spending on infrastructure. Alphabet’s “Other Bets” segment, which includes Waymo, brought in revenue of $1.65 billion in 2024, up from $1.53 billion in 2023. However, the segment lost $4.44 billion last year, compared to a loss of $4.09 billion the previous year.

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