Elon Musk on Kamath’s WTF Podcast: High Probability We Live in a Simulation, Attacks Tariffs, Supports H-1B

Billionaire Elon Musk told Zerodha cofounder Nikhil Kamath on the latest episode of the WTF podcast, released late Sunday, that he believes there is a “pretty high” probability humanity is living inside a computer simulation.

Musk framed the idea as a matter of probability rather than certainty, arguing that the rapid improvement in video games and artificial intelligence makes simulated realities that are indistinguishable from physical existence increasingly plausible.

He traced the logic to technological progress. Consumer games, he said, have evolved from rudimentary titles like Pong to near-photorealistic, massively multiplayer environments within a few decades. Given enough time, Musk argued, such progress will likely yield virtual worlds so convincing that both players and AI-generated characters could engage in interactions as complex as, or more sophisticated than, typical human conversations.

If civilization continues to advance, Musk suggested, creators could eventually generate millions or even billions of ultra-realistic virtual universes populated by highly capable, unscripted AI agents.

Describing what he called a Darwinian filtering of simulations, Musk said creators would discard “less interesting” iterations because they produce little valuable insight. The simulations that remain would therefore be the most compelling. “You’re most likely a distillation of what’s interesting,” he told Kamath, adding that there may be multiple nested layers of simulations, with beings who run one simulation themselves living inside another.

Musk’s remarks opened into a wider conversation on the podcast in which he addressed a series of policy and business topics.

Tariffs & DOGE

Musk said he unsuccessfully attempted to convince former U.S. President Donald Trump that tariffs undermine economic efficiency.

Advocating for freer trade, he argued that tariffs are distorting and impractical, comparing tariff barriers between countries to the absurdity of imposing them between people, cities, or states. Such restrictions, he said, would amount to an economic disaster. Musk added that he hopes the United States and Europe eventually move toward a “zero-tariff” framework.

In the conversation, Musk also discussed his participation in the Department of Government Efficiency, an initiative he jokingly referred to by the acronym “DOGE.” He described the project as an “interesting side quest” that exposed pervasive and routine inefficiencies within federal operations.

H-1B Programme

Musk said that simple administrative changes, such as requiring federal payments to include a congressional payment code and a meaningful comment field, could save what he estimated might amount to tens of billions of dollars annually. He argued that many audit failures arise from missing or incomplete information rather than intentional wrongdoing, and praised commonsense reforms that enhance financial accountability.

He also criticised what he described as lax border controls under the Biden administration, calling the situation a “total free-for-all” that has encouraged illegal immigration. According to Musk, generous benefits offered to undocumented entrants have created incentives that attract people to the United States.

On H-1B visas, Musk acknowledged that some outsourcing firms have “gamed” the system, but stopped short of supporting its abolition. He argued that the programme itself should not be dismantled, even if abuses within it require corrective action.

Musk’s Take on X

Finally, Musk reflected with a laugh on his long-standing fascination with the letter X, tracing it back to his 1999 launch of X.com, which he initially conceived as a financial exchange that later evolved into PayPal.

After reacquiring the domain years later, he said that buying Twitter, now rebranded as X, created an opportunity to revive that original ambition: to build a real-time, secure “clearinghouse” for financial transactions and a more efficient global money database.