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The Collision of Two Giants 5:15 Miles: You can almost feel the tension in the air when Tesla arrives in New York in 1884. He’s got that letter of recommendation from Edison’s associate in Paris, which reportedly said, "I know two great men and you are one of them; the other is this young man" . Tesla starts working at the Edison Machine Works, and it’s basically an immediate clash of philosophies.
5:39 Lena: It’s the classic "scientific theorist" versus the "practical trial and error" guy, isn't it? Edison was famous for saying genius is one percent inspiration and ninety nine percent perspiration, while Tesla was all about that one percent of pure vision .
5:54 Miles: Precisely. Edison’s whole world was built on Direct Current, or DC. But DC had a major flaw: it couldn't be transmitted over long distances efficiently. You’d need a power plant every mile or so . Tesla knew AC was the answer because it could be stepped up to high voltages for long distance travel and then stepped down for home use .
6:16 Lena: But Edison wasn't interested. He had a lot of money and reputation tied up in DC. And then there’s that famous—or infamous—dispute over the $50,000 bonus. What really happened there?
6:28 Miles: Well, Tesla claimed that the manager at Edison’s shop offered him $50,000—which would be nearly two million dollars today—if he could design "twenty-four different types of standard machines" . Tesla worked like a madman, stayed up all night, and actually pulled it off. But when he went to collect, he was told, "Tesla, you don't understand our American humor" .
6:51 Lena: That is cold. I mean, after all that work, to just be told it was a joke? No wonder he quit. It’s actually heartbreaking to think that after that, he ended up digging ditches for two dollars a day just to survive .
7:05 Miles: He was devastated. He felt his education and his talent were being wasted. He later wrote that his "high education in various branches of science... seemed to me like a mockery" . But even while he was digging those ditches, he was talking about his AC motor. Eventually, he met some investors who saw the potential and helped him form the Tesla Electric Company in 1887 .
7:26 Lena: This is where the story really takes off. He finally gets his own lab on Liberty Street in Manhattan, and he starts churning out patents like a machine. And that catches the eye of another big player: George Westinghouse .
7:39 Miles: Westinghouse was the perfect partner because he already had an AC system, but he was missing the motor to make it truly viable. When he saw Tesla’s induction motor, he knew he had the winning hand. He licensed Tesla’s polyphase induction motor and transformer designs for $60,000 in cash and stock, plus a royalty of $2.50 per horsepower .
8:01 Lena: $2.50 per horsepower... if he had kept those royalties, he would have been one of the wealthiest people in history. But as we know, that’s not how it ends. First, though, they had to win the "War of Currents."