Musk & Trump: A power play or business bonanza?
7 Min Read
The wealthiest person on the planet now wields significant influence over the "most powerful leader" and the US government. How has this affected his business?
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President Donald Trump speaks as he is joined by Elon Musk, and his son X Æ A-Xii, in the Oval Office at the White House, on Tuesday, February 11, 2025, in Washington. (AP)
A new article by Financial Times highlights Elon Musk’s expanding role at the heart of the US government, which has sparked criticism and raised concerns that it could benefit his businesses while disadvantaging competitors.
Musk’s six companies already benefit from approximately $20 billion in government contracts, in addition to multiple subsidies. The billionaire has insisted these contracts were awarded on merit and have delivered value for taxpayers. However, after donating more than $250 million to Donald Trump’s 2024 re-election campaign, Musk now leads a cost-cutting initiative across federal agencies—including those that have previously investigated or penalized his companies, Tesla and SpaceX.
X
Musk openly acknowledged that he "overpaid" when he acquired Twitter for $44 billion in 2022. However, his deeper involvement in government has coincided with a resurgence for the platform, now rebranded as X, as major advertisers, including Amazon, return.
The aggressive push by Musk’s so-called Department of Government Efficiency (DOGE) to slash federal spending has largely unfolded on X, where he frequently highlights what he deems wasteful government expenditures. Major Trump administration announcements are now made on the platform, which Musk also uses to attack critics.
X’s once-precarious financial situation has improved significantly. Recently, billions in debt tied to the acquisition were successfully offloaded at near face value, offering relief to the banks that funded the takeover.
Despite its recovery, X remains under scrutiny from the European Union over the spread of alleged disinformation. While Brussels remains firm, the White House has hinted that US support for NATO could hinge on Europe easing its regulatory grip on American tech firms.
Tesla
Musk’s electric vehicle and battery manufacturer, Tesla, remains the backbone of his business empire and the primary source of his $150 billion fortune. However, Trump’s rollback of green energy policies threatens to undermine the company.
Tesla has historically received over $2.8 billion in state and federal subsidies and last year made $2.8 billion—nearly 40% of its $7.1 billion net profit—from selling emissions credits to automakers with higher carbon footprints. Trump has already scrapped a Biden-era policy requiring that half of new US car sales be electric by 2030. He has also signaled the possible elimination of the $7,500 EV tax credit and the emissions credit system.
Musk has downplayed the potential impact on Tesla, asserting that the shift to electric vehicles is "inevitable" and that ending subsidies would hurt less profitable EV makers more.
Nonetheless, Trump’s hostility to EVs comes at a challenging time. Tesla recently posted its first annual decline in EV sales in over a decade, with a particularly steep drop in Europe. Analysts attribute part of this slump to Musk’s association with far-right movements in Germany and the UK.
Another looming challenge is Trump’s trade war with China, Tesla’s second-largest market and home to its largest Gigafactory. The company also awaits regulatory approval in China to roll out its self-driving car software.
"The strategic direction is being driven by Elon’s ego, not what is best for Tesla," said longtime investor and Musk critic Ross Gerber as quoted by FT.
"The move into politics is a problem because it doesn’t sell cars," he further stressed.
SpaceX
Valued at $350 billion, Musk’s aerospace giant has effectively become the primary operator of the US space program, securing billions in government contracts. The company is also developing the world’s most powerful reusable rocket, Starship, as part of Musk’s broader ambition to colonize Mars.
Trump has expressed admiration for Musk, referring to him as a "super genius" in his victory speech and specifically praising SpaceX’s feat of catching the Starship booster with its robotic arms, "Mechazilla."
Trump’s choice for NASA administrator, billionaire Jared Isaacman, has strong ties to Musk and has already led two SpaceX missions. With Isaacman in charge, SpaceX’s dominance over rivals like Boeing and Jeff Bezos’s Blue Origin is expected to grow.
Additionally, Musk’s position at DOGE, which is focused on cutting regulations, could prove beneficial in SpaceX’s clashes with agencies such as the Federal Aviation Administration (FAA), the National Labor Relations Board, and the US Fish and Wildlife Service—all of which Musk has accused of obstructing innovation.
SpaceX could also gain from Trump’s ambition to build the most extensive missile defense shield in US history, as per the piece. The plan requires a "space-based interceptor" system, and currently, SpaceX is the only company capable of launching the necessary satellites into orbit at scale.
Starlink
A division of SpaceX, Starlink operates a vast constellation of over 7,000 low-Earth orbit satellites, aiming to revolutionize global broadband.
Initially designed for rural communities, airlines, and cruise ships, the system has taken on significant geopolitical weight, particularly amid the war in Ukraine and the situation in Taiwan.
Under the Biden administration, Starlink faced regulatory pushback from the Federal Communications Commission (FCC), which revoked a $900 million broadband grant and delayed an application to expand its satellite fleet to nearly 30,000.
However, Musk’s alignment with Trump has also backfired. In Canada, the premier of Ontario announced his government would be "ripping up" a contract with Starlink in response to Trump’s renewed threats of tariffs on Canadian goods.
Starlink also faced a temporary ban in Brazil after Musk waded into political controversies surrounding misinformation and censorship on X.
xAI
The Trump administration has vowed to cement US leadership in artificial intelligence, swiftly reversing a Biden-era executive order that had introduced new AI safety regulations.
This pro-industry stance, along with the appointment of Musk ally David Sacks as Trump’s AI czar, is expected to benefit Musk’s AI start-up, xAI.
However, it also strengthens his biggest competitor, OpenAI.
Musk, a co-founder of OpenAI, has since turned against the company, launching multiple lawsuits and recently making an aggressive bid to take over OpenAI to prevent it from becoming a for-profit entity.
OpenAI CEO Sam Altman responded, calling Musk’s actions "profoundly un-American", adding that it would be wrong to "use political power to hurt your competitors."
Musk denied any intent to weaponize his government influence but has rattled OpenAI leadership.
He has also publicly questioned the funding behind a Trump-backed $500 billion AI infrastructure deal involving OpenAI and Japan’s SoftBank.
Neuralink & The Boring Company
Musk’s brain-implant company Neuralink recently achieved a major milestone by implanting an electrode into a human brain for the first time, allowing the patient to operate devices with their thoughts.
The company remains subject to strict FDA oversight in the US, and while there are no immediate plans for deregulation, escalating US-Canada trade tensions could complicate its recruitment of test patients in Canada.
The Boring Company, Musk’s tunneling venture, has projects underway in Las Vegas and California, but some deals have fallen through due to local opposition. Since Trump’s election victory, Boring Company CEO Steve Davis has been reassigned to DOGE, where he has played a key role in Musk’s campaign against government spending.
Musk declined to comment on these developments, as per the report. The White House has stated that he will "excuse himself" from DOGE matters directly affecting his businesses, but his deepening ties with Trump are already reshaping the landscape for his companies—both at home and abroad.
