How Elon Musk’s $130 million investment in a Trump victory could yield huge profits for Tesla and the rest of his business empire
Donald Trump’s election night national address confirmed that one of the biggest winners of the evening – besides himself – was Elon Musk.
Trump spent much of his scattered victory speech thanking Musk, who recently spent more than $130 million and a lot of his time and tweets on conservative political causes. In particular, Trump was full of praise for Musk’s rocket company SpaceX and its Starlink internet satellites—two business units poised for government contracts.
“We must protect our super geniuses,” the president-elect said. On the campaign trail, Trump said he would create a new “government effectiveness” position in his administration for the tech CEO, at Musk’s request.
Musk is known to have cited government overreaction when faced with any fines or penalties. So it’s no surprise that the billionaire has tied himself to Trump, who has promised to deregulate.
In addition to the possibility of looser government oversight, Musk’s alliance with Trump could help him secure federal contracts. the New York Times report That SpaceX and Tesla has raked in at least $15.4 billion in government contracts over the past decade. Musk’s colleagues and government officials speak Reuters The billionaire’s investment in Trump is part of a broader effort to shield his companies from regulation and ensure access to government subsidies.
Below are just some of the ways each of Musk’s businesses could gain from Trump retaking the White House.
SpaceX and Starlink
Tensions between the Federal Aviation Administration and SpaceX are high. In September, Musk called for the resignation of FAA Administrator Michael Whitaker amid a $630,000 fine against SpaceX for violations related to its rocket launches. Musk said his plan for the department of government effectiveness (DOGE) under Trump includes loosening regulations on his rocket launches.
Meanwhile, Starlink, SpaceX’s satellite internet unit, can too received a friendlier reception from the Federal Communications Commission under Trump, let’s say the president chooses Republican commissioner Brendan Carr to replace current chairwoman Jessica Rosenworcel. Carr called the FCC’s 2022 decision to revoke $885 million in Starlink subsidies “regulatory harassment.” And Trump himself has proposed using Starlink’s satellite services for rural connectivity — a potential financial boon for Starlink — as part of the government’s $42 billion plan to fund bandwidth wide in the future.
X
Following Musk’s $44 billion acquisition of Twitter, the Federal Trade Commission investigated whether X and its new owner had violated an existing FTC data privacy agreement with the company. After acquiring the service, now called X, Musk slashed the privacy and security compliance teams that were supposed to keep the company in the FTC’s good graces. Last week, Musk promised payback by saying that FTC Chairwoman Lina Khan would be fired under the Trump administration. Never mind that Trump’s vice president, J.D. Vance, has praised Khan for being tough on monopolies.
xAI
Musk’s innovative AI startup, xAI, has a chatbot that competes with OpenAI’s ChatGPT and other major language models. As a result, Musk is very concerned about any regulations that impact AI.
So far, federal talks on passing broad regulation of AI companies have not materialized. But Musk could still intervene by advising Trump on a plan the lighter replacement for the Biden administration’s AI executive ordera framework for the use and development of AI that places a number of limitations on AI companies.
In California, Musk backed controversial safety legislation, SB 1047, that would have reined in big AI companies. That legislation has been fiercely opposed by venture capitalists and large-scale developers, citing the potentially catastrophic risks of artificial intelligence.
Tesla
Federal auto safety regulators last month hit Tesla with a new investigation into its Full Self-Driving mode, which partially automates human driving, after a Tesla driver struck and killed a pedestrian. Musk could use his influence to shape federal auto safety enforcement or federal regulation of self-driving cars or robotaxis. That’s an area he’s particularly interested in, as Tesla hopes to introduce robotaxis to compete with more established rivals like Alphabet’s Waymo and even GM’s Cruise.
Musk could also try to lobby Trump on his opposition to the Biden administration’s electric vehicle tax credits, which encourage electric vehicle purchases.
Trump’s promise to increase Biden’s current tariffs on China and other competing nations could also create complications for Musk. Restricting imports of cheaper electric vehicles would eliminate some of Tesla’s US competitors, but escalating the trade war would also greatly harm the tech industry by disrupting its dependence on China. China and Taiwan about chips.
Regardless, investors remain hopeful: Tesla shares jumped 15% after Trump’s victory speech.
Boring company
Musk’s vision of high-speed transportation like the Boring Company’s Hyperloop project is hindered by regulations and the limitations of current technology. Instead, they focused on a lower-tech version: Tesla carrying passengers underground near the Las Vegas convention center. The project has faced an OSHA investigation workplace safety. But despite the high costs, complex infrastructure and unsafe conditions, Musk insisted Government regulations are the cause for tunnel projects in several other US cities to pass through. In any case, having allies in the US government could make it easier for Boring to win large infrastructure projects.
Neural connection
As founder of the brain chip company Neuralink, Musk has criticized the Food and Drug Administration’s lengthy approval processes for new drugs and medical devices, declaring at protested in Pennsylvania that “overregulation kills people.” It was later reported that the cancer drug Musk was referring to has actually been approved. However, Musk’s vision of widespread “government efficiency” will likely also take aim at the FDA and potentially get his Neuralink approved more quickly. To date, Neuralink has implanted brain devices in two FDA-approved patients.
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