Richard Branson's hyperloop bet is next step in battle with Elon Musk over future of travel

Key Points
  • Richard Branson backed Hyperloop One, a futuristic technology that will zip humans around underground.
  • Elon Musk, creator of the idea of the hyperloop, founded Boring Co., which is taking a different approach.
  • According to Branson's new book, Musk previously ruined a deal Branson hoped to sign with Alphabet CEO Larry Page to build a space-based internet.
Sir Richard Branson speaking at the Innovation Summit in Brooklyn, New York on July 14, 2017.
Adam Jeffery | CNBC

When Richard Branson invested in futuristic transportation start-up Hyperloop One this week, he jumped into yet another market that's of deep personal interest to fellow billionaire entrepreneur Elon Musk.

Musk is credited with creating the idea of the hyperloop, a super speedy method of passenger travel that involves pressurized capsules. He also founded The Boring Company, which is setting out to build hyperloop tunnels.

Whether it's the space race or the future of high-speed underground travel, Branson and Musk are charting parallel paths into these speculative technologies. Branson's Virgin Galactic claims to be the world's first commercial spaceline, while Musk's SpaceX is already designing and launching rockets and spacecraft for NASA.

When Virgin Group announced a stake in Hyperloop One — now Virgin Hyperloop One — Branson said, "I think it's more likely that I will go into space before I get into my pod," noting that he expects to ride in space within six months.

While many have questioned the viability of a system to zoom humans around underground in high-speed pods, Musk has indicated on Twitter that he's already received "verbal approval" for a route between New York and Washington.

In a July 20 tweet, he laid out his plans in brief:

The intense level of competition between Musk and Branson has quite the history to it.

According to Branson's new autobiography, "Finding My Virginity," the two billionaires first tangled in early 2015, when they decided to compete, rather than partner, to put low-power satellites in space.

In the book, Branson described his reaction after Musk spoiled a deal Branson was working on with Alphabet CEO Larry Page to develop a space-based internet.

"I was saddened that Elon didn't consider working with Larry and me," Branson wrote.

In the book, Branson recounts how he and Page celebrated New Year's Eve 2015 dancing on a bar on Moskito Island, part of Branson's private archipelago in the British Virgin Islands.

Soon after the drinks flowed and the camaraderie peaked, the pair discussed joining forces on a bold idea: To build a kind of internet in space using hundreds of inexpensive satellites that could be launched by Virgin Galactic.

"I know this project will interest you greatly," Branson wrote to Page, according to the book. He was plugging an idea he'd heard about from Greg Wyler, the founder of OneWeb, which aims to use satellites to offer such a service.

Wyler, a former eBay executive, had pitched Branson on the plan during another gathering on nearby Necker Island, according to the book.

Elon Musk reveals his plan to send passengers anywhere on Earth in under 60 minutes, for the price of a plane ticket
Elon Musk reveals his plan to send passengers anywhere on Earth in under 60 minutes, for the price of a plane ticket

After his initial optimism, Branson was disappointed to hear that Musk was trying to cut his own deal with Wyler.

"If our positions were reversed, I would have talked to him and tried to collaborate rather than sweep the deal from under him," Branson wrote, referring to Musk.

In January 2015, Musk's SpaceX announced a $1 billion round of financing, and Google was one of two lead investors. Meanwhile, Branson said he was investing in OneWeb, which envisions using a constellation of 648 small satellites for its service. Both companies are trying to bring the web to space.

That's not the way Branson had hoped things would play out.

"We could have achieved even more by working together," Branson wrote. "After all, we are friends."