Elon Musk has turned to Russian President Vladimir Putin for help with his latest grandiose dream, a project called the Hyperloop. Based on the idea of passenger pods traveling through tubes at well over 100 miles per hour, a concept designed by Musk, the Hyperloop is expected to cut the travel time between Los Angeles and San Francisco to about 35 minutes. But the idea is just a dream at this time, and Musk is turning to Putin, and investors allied with the Russian President, to bring the dream to reality.
This is not the first time Elon Musk has gone to Russia for help with his business ventures. He made a trip to Russia in October of 2001 to attempt to buy refurbished ICBMs to use as rockets for the space launch company he was forming, SpaceX. That visit was an epic failure for Musk.
“A brash dot-com millionaire showed up in Russia shopping for a rocket at the start of Vladimir Putin’s presidency, only to be derided as a crank by smug apparatchiks who plied him with vodka before waving him away,” Ilya Khrennikov and Stepan Kravchenko write for Skift.com about Elon Musk’s first business trip to Russia.
Musk is known for creating three heavily-subsidized businesses, that have in total enjoyed more than $4.9 billion in government benefits. Those companies include the SpaceX, the maker of high-priced luxury electric cars Tesla, and the solar-panel company SolarCity. While SpaceX is profiting almost entirely from government space launch contracts secured with major help from Sen. John McCain (R-AZ), the other two companies have been both losing money and declining in overall value in the last couple years.
Russian investors have already put up about $100 million for the company Hyperloop One, which proposes to build a 400-mile Hyperloop between Los Angeles and San Francisco at a cost of about $6 billion. The Russians are also working with Hyperloop One on an idea to build a 44 mile Hyperloop in China for about $460 million. Putin himself believes the Hyperloop “will fundamentally change the global economy.”
Russian businessman Ziyavudin Magomedov, an ally of Putin and the head of Summa Group, is the most prominent Russian investor in Hyperloop One. The project is expected to rapidly move both cargo and passengers via tubes.
It should be a surprise to no one, that Musk, who has willingly accepted billions in loans, grants, and other subsidies from both the federal government and the state governments of Nevada, Texas, New York, California, and others would now gladly turn to Russian investors working with Vladimir Putin to bring this Hyperloop idea to reality. If nothing else, one must give Musk credit for quite skillfully selling a bill of goods to those investors. There is no proof yet the Hyperloop idea will be viable. But Putin and his allies sure are willing to push some serious cash behind the concept.
If the Hyperloop crashes as often as SpaceX rockets have, it will be doubtful many passengers will want to take their chance riding on it. While the idea of such rapid travel is quite attractive, we have yet to see if the money from Putin’s Russian investors can turn this latest Musk idea into reality.
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