Elon Musk seems poised to become the rising star in Trump's administration—or so the 47th US President said in his 2024 victory speech. Musk is likely to hold two key positions in Trump's administration. The first would be heading a committee dedicated to cutting government spending. Trump mentioned in an interview that Musk might be the "Secretary of Cost-Cutting." According to Trump's statements, this committee would undertake a comprehensive review of the federal government's accounts and financial performance to eliminate fraud and improper payments within six months of its establishment.
(Trump has tasked Musk with co-leading the new Department of Government Efficiency (Doge). In a statement on social media, the president-elect said Musk - along with entrepreneur and former Republican presidential candidate Vivek Ramaswamy - would "dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies.")
In his second role, Musk is tasked with helping the US reach Mars by 2028, a victory Trump says he wants to claim over China. This ambition aligns with the Artemis project, which aims to land humans on the moon again by 2026—a mission in which Musk's company, SpaceX, plays a significant role.
This collaboration between Trump and Musk is not new; Musk had previously served on advisory councils during Trump's earlier administration. In 2017, he joined Trump's Economic Advisory Council and the Council on Jobs and Competitiveness (Jobs Council) to advise the president on economic and commercial issues. However, Musk resigned from these councils after Trump announced the US withdrawal from the Paris Climate Agreement, voicing his opposition to the decision and his support for global climate action efforts.
If Trump stands to gain from Musk's expertise in cost-cutting and ambitious space ventures, how would Musk benefit from Trump, given that the billionaire supported Trump's campaign with more than $118 million?
A Vast Empire
Elon Musk presides over an immense industrial empire. His company, SpaceX, aspires to reach Mars and monopolize space transportation with its new Super Heavy rocket. His company, Tesla, leads in electric vehicles, self-driving technology, and household robots. Another Musk enterprise, The Boring Company, aims to revolutionize ground travel through vast vacuum tunnels for Hyperloop trains, with speeds nearing that of sound. Musk's Neuralink focused on developing brain-implant technology to connect the human brain directly with computers, with potential applications in treating medical conditions and enhancing human capabilities. Musk also acquired Twitter, rebranding it as "X" with the ambition to transform it into a comprehensive platform, not merely a social media site.
Musk is also interested in cryptocurrency and has significantly influenced its prominence through statements and tweets that have often unsettled markets and led to major shifts in cryptocurrency valuations. For instance, Tesla's $1.5 billion Bitcoin purchase in early 2021 increased Bitcoin's legitimacy in the markets. When Musk announced Tesla would accept Bitcoin as payment for its cars, Bitcoin's price surged. However, when he reversed the decision over energy consumption concerns, Bitcoin's value plummeted. Musk is also a strong proponent of Dogecoin, a cryptocurrency that began as a joke. His repeated tweets about Dogecoin have raised its value and brought it more fame.
Musk is equally invested in artificial intelligence (AI). He was one of the co-founders of OpenAI in 2015, the organization that developed the well-known ChatGPT application. However, disagreements arose between Musk and OpenAI's management, leading him to leave the company. Initially, OpenAI aimed to develop AI safely and make it accessible to all, but when the company opted to adopt a profit-driven model for funding, Musk departed, considering this a departure from its founding principles. Despite parting ways with OpenAI, Musk's interest in AI remains strong. In 2023, he founded a new AI company, xAI, focused on developing generative AI technologies that could rival existing models.
Musk's plans go beyond developing generative AI; he is working to integrate AI capabilities into his current products. Tesla, for example, uses AI technologies to improve its self-driving cars. AI is also expected to play a critical role in transforming the X platform (formerly Twitter) by adding features tailored to user needs. To achieve these goals, Musk has invested in the infrastructure necessary to train AI systems, including acquiring advanced graphics processing units and building massive computers to support training AI systems.
Musk's Potential Gains
Musk's vast empire, which has made him the world's richest person, still faces considerable regulatory, legal, financial, logistical challenges, as well as competition and obstacles to expansion. His ventures rely heavily on government support to achieve their still-unachieved goals.
The path to Mars is beset with challenges and requires significant backing from US government agencies. Building a vast Hyperloop network necessitates massive government funding along with regulatory and legal processes. Legislation for AI development and self-driving vehicles is still in its early stages, while stringent health regulations complicate Neuralink's operations. Here, Musk's potential gains from Trump's administration become clear:
1. Easing Regulatory and Legal Constraints:
Regulatory hurdles are among the primary challenges facing Musk's companies, particularly regarding electric vehicles, AI, and space exploration. For instance, projects such as Tesla and The Boring Company require local and federal permits for building electric vehicle infrastructure and tunnels, sometimes delaying these initiatives. Trump's administration, known for supporting deregulation, could ease some of these legal requirements, allowing Musk's companies to execute their plans more rapidly and flexibly.
2. Relaxing Climate and Environmental Laws:
Musk's companies also face environmental pressures. Both Tesla and SpaceX seek to strike a balance between innovation and carbon footprint reduction. Trump's prior administration supported the relaxation of climate and environmental regulations, a stance that might continue, giving Musk more freedom in energy use and expansion. Moreover, SpaceX could particularly benefit from this, given its need for large amounts of rocket fuel, which can be challenging under strict environmental regulations.
3. Providing Funds:
Funding is an ongoing challenge, especially for capital-intensive projects like SpaceX's Starship exploration program. Should Trump's administration back space projects, SpaceX might secure government contracts or financial aid, easing its financial burden and aiding its ambitious goals. Trump's policies may also lead to tax breaks for corporations, boosting profits and enabling Musk to finance his future projects.
4. Access to Advanced Technology:
Musk's companies face fierce competition in AI, electric vehicles, and space, with many large firms developing similar technologies. Musk could gain support from Trump's administration to access certain technologies that are unavailable to other companies, especially those developed by NASA or in US military labs.
5. International Expansion and Trade Policies:
Musk's companies face significant global market challenges, especially amid trade tensions between the US and other countries like China. Trump's trade policies can be a double-edged sword: while they might protect the US market, they could limit Tesla's and SpaceX's access to global markets. That is why Musk would seek Trump's support to maintain trade relations with other countries or to gain exemptions from specific restrictions.
In summary, Musk stands to benefit significantly from Trump's new administration. A shared set of characteristics between Trump and Musk makes this collaboration feasible. Both are businessmen focused on profit and deals, both are profit-driven businessmen known for their unpredictability, and both relish media attention. These shared traits might limit conflicts and foster mutual understanding to achieve their objectives. With Trump enjoying Republican support across the House, Senate, and Supreme Court, Musk has greater opportunities to realize his ambitions through the Trump administration.
