Elon Musk’s role at the heart of the US government has been decried for its potential to benefit the world’s richest man while harming his competitors.
Musk’s six businesses already profit from about $20bn in government contracts — which the billionaire insisted this week were all won on merit and have provided value for money — and several subsidies.
But Musk, who donated more than $250mn to Donald Trump’s 2024 re-election campaign, is now spearheading a cost-cutting drive across government departments, including those that probed or fined his companies Tesla and SpaceX.
Here is how his companies stand to fare in the new administration:
X
Musk famously admitted to overpaying for Twitter after he bought the social media platform known now as X for $44bn in 2022. But the billionaire’s foray into government has coincided with a turnaround in X’s fortunes, as advertisers, including Amazon, flock back to the platform.
The full-frontal attack on the federal bureaucracy by the so-called Department of Government Efficiency (Doge), which Musk is leading, has unfolded in part on X, where the billionaire has cited what he considers examples of egregious federal waste. Crucial moves by the Trump administration are being communicated on the site, which Musk also uses to rail against his critics.
X’s finances — which were once so bad that Musk floated the idea of filing for bankruptcy — have improved. Last week, billions of dollars of debt related to its purchase were finally sold at near face value: a great relief for banks that funded the takeover and had written down the loans.
The platform is also under investigation by the EU over the dissemination of alleged disinformation. While there is no sign of Brussels backing down, the White House has signalled that support of Nato could be contingent on Europe tamping down its regulation of US tech.
Tesla
The maker of electric vehicles and batteries is the core of Musk’s empire and the source of $150bn of his personal wealth. It could be hurt by Trump’s aggressive reversal of the government’s commitment to less carbon-intensive transportation.
Over the years, Tesla has received more than $2.8bn in state and federal subsidies and last year reaped $2.8bn — two-fifths of its $7.1bn 2024 net profit — from selling regulatory credits to more polluting rivals that otherwise reduce emissions.
Trump has already cancelled former president Joe Biden’s target that by 2030 half of new US vehicles sold should be battery powered. Trump has also indicated that a federal EV tax credit worth $7,500 and the emissions credits scheme could be axed too.
Musk has dismissed the potential impact on Tesla, saying the electrification of transport is inevitable and that removing subsidies would harm less profitable EV rivals more.
But Trump’s hostility to EVs comes at a bad time. While the Model Y remains the best-selling car of any kind, sales are softening and Tesla reported its first annual decline in EV sales in more than a decade in 2024. This was particularly pronounced in Europe, which analysts blamed on Musk’s sponsorship of far-right politics in Germany and the UK.
Another issue could be Trump’s trade war with China, Tesla’s second-largest market and location of its biggest “gigafactory” — and where Musk is seeking regulatory approval to train his self-driving car software.
“The strategic direction is being driven by Elon’s ego, not what is best for Tesla,” said Ross Gerber, a long-standing shareholder and critic of Musk. “The move into politics is a problem because it doesn’t sell cars.”
SpaceX
Musk’s $350bn start-up has become the de facto operator of the US space programme, winning billions of dollars’ worth of government contracts and building the largest reusable rocket in history as it seeks to fulfil its owner’s ambition to colonise Mars.
Trump has special admiration for the company, calling Musk a “super genius” in his victory speech and praising SpaceX’s historic technical feat: catching the huge Starship rocket booster using its “Mechazilla” robotic arms.
The president’s pick for Nasa administrator, tech billionaire Jared Isaacman, has close ties to Musk and has led two SpaceX missions. With Trump and Isaacman’s sponsorship, SpaceX’s advantage over rivals such as Boeing and Jeff Bezos’s Blue Origin should only widen.
Musk’s role at Doge cutting government red tape could also help him in skirmishes with the Federal Aviation Administration, National Labor Relations Board and US Fish and Wildlife Service — which have all accused him of stymying innovation and delaying launches with regulations.
SpaceX’s workload could further increase if Trump is successful in commissioning the most ambitious missile shield in US history, which demands the deployment of “space-based interceptors”. It is currently the only space company with the capacity to reliably launch hundreds of new satellites into orbit at short notice.
Starlink
Within SpaceX sits Starlink, a network of more than 7,000 low-orbit satellites aiming to disrupt the fibre optic-based global broadband system.
Initially targeted at remote rural areas, airliners and cruise ships, its ambitions have grown as the technology has advanced. Its use has become geopolitically contentious during Russia’s war on Ukraine, and in Taiwan.
Under Biden, Starlink had faced pushback from US authorities such as the Federal Communications Commission, which delayed an application to dramatically increase the number of satellites to almost 30,000 and in 2022 revoked a near-$900mn deal to provide rural broadband.
But Musk’s sway within the Trump administration has had a negative effect on Starlink. This month, the leader of Canada’s most populous province, Ontario, said his government would be “ripping up” a contract with the broadband provider in retaliation for Trump’s threat to hit Canada with tariffs.
Starlink was also temporarily banned in Brazil after being caught up in a spat over misinformation and censorship on X after Musk intervened to support rightwing causes in the country.
xAI
The Trump administration has pledged to cement the US’s dominance in artificial intelligence, and immediately rescinded a Biden order establishing safety and security standards for the nascent industry.
This friendly stance — along with the appointment of close Musk ally David Sacks as Trump’s AI tsar — stands to benefit the billionaire entrepreneur’s two-year-old start-up xAI.
It also, however, empowers some of his fiercest foes, including OpenAI.
Musk, who co-founded the ChatGPT creator with Sam Altman, has since turned on the company, filing multiple lawsuits against it. On Monday Musk made an audacious takeover offer to stop OpenAI from restructuring into a for-profit enterprise.
Altman said that it would be “profoundly un-American to use political power to hurt your competitors”, and Musk promised he would not, but his proximity to Trump has shaken OpenAI.
Musk has also taken aim at one of the White House’s early signature AI policy moves, publicly casting doubt on the financing behind a Trump-backed $500bn infrastructure project with OpenAI and Japan’s SoftBank.
Neuralink/Boring Company
Neuralink, Musk’s brain implant company, last year succeeded in implanting an electrode into a human brain for the first time, allowing the recipient to operate phones and computers with just their thoughts.
It is running closely regulated clinical trials in the US, but there is no indication that the Food and Drug Administration plans to loosen its oversight of Neuralink’s activities. The company is also recruiting patients in Canada and could suffer if a trade war with the US escalates.
The Boring Company, which specialises in building underground tunnels to cut congestion, has projects under way in Las Vegas and California. But other commissions have fallen through after local opposition. Since Trump’s win, its chief executive Steve Davis has been seconded to Doge, where he has overseen Musk’s attack on government spending.
Musk did not respond to a request for comment. The White House has said he will “excuse himself” from Doge work related to his business contracts.
