Elon Musk is crowning himself technoking of the federal government
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Dear readers: Boy was I wrong.
Back in August, as speculation about a potential Elon Musk cabinet position began swirling, I wrote that the notion was laughable because a) you can’t work on government matters that affect your own personal finances, so Musk would wind up in a quagmire of lawsuits, and b) even if you ignore the legal and ethical constraints, his Tesla shareholders — who hold the key to his wealth — would revolt.
I’m here to apologize. Because things got so much wilder than I could have imagined.
To be clear: It’s not that I was wrong about the conflicts of interest Musk would be subject to — there is virtually nothing in government that doesn’t affect Musk’s businesses, which span electric vehicles, robotics, artificial intelligence, space exploration, social media, biotech, satellite comms and road infrastructure.
But I sorely underestimated how ferociously Musk would sink his teeth into Donald Trump’s coattails in order to run roughshod over legal precedent and anoint himself the technoking of the federal government.
Technically, the administration has classified Musk as a “special government employee.” And technically, that means he should be subject to federal conflict of interest rules. But technically those statutes have to be enforced by the Justice Department, and it’s yet to be seen whether that will happen. Which is all to say, Tesla shareholders shouldn’t lose any sleep over that one.
Over the summer, with the presidential race in a virtual dead heat, some Tesla investors saw the idea of Trump and Musk in the White House as a “disaster scenario” because they wanted Musk — whose extracurriculars have long irked shareholders — focused on his winning horse, the electric vehicle maker built on a promise of a driverless utopia. But since Trump’s decisive win and elevation of “first buddy” Musk, shareholders seem content to let Musk run wild on the hopes that he’ll do what any CEO with a scary amount of power would do: slash regulations and make sure any new policies benefit the bottom line.
“A formal cabinet position would have been the game-changer, because it would have changed his CEO role,” Dan Ives, managing director of Wedbush Securities, told me Tuesday. The current situation is different, he noted, and “any blowback or criticism is far outweighed by these huge positives of Musk’s role in a Trump White House that ultimately will accelerate the autonomous roadmap in the United States.”
(Autonomous driving, that is — just one several of Musk’s projects that he has repeatedly overpromised and underdelivered on.
Ultimately, without any enforcement of conflict of interest laws, Musk’s ascension is effectively a cash grab.
The chaotic Trump agenda that Musk is abetting has sent businesses scrambling. But not Musk’s businesses.
US automakers in particular have been dreading the potential 25% tariff on Mexican and Canadian parts that would force American car prices higher. But Tesla didn’t need to sweat those restrictions nearly as much as Ford, GM and Stellantis. That’s because while there’s no such thing as a fully “all-American” car, as my colleague Chris Isidore notes , Tesla makes one of the few vehicles that is more American-made than most: the Model 3. That means any future tariffs on Mexico and Canada might not pose the same kind of burden on Tesla as its larger rivals.
Trump’s cancellation of EV tax credits, which Musk supported, could still hurt Tesla, of course. But it will almost certainly hurt Tesla’s domestic rivals more.
And then there’s SpaceX, Musk’s privately owned rocket company, which has become a critical supplier to America’s national space ecosystem. The company has received at least $15 billion in federal contracts over the past decade. And it seems rather unlikely that any of those agreements will be undone by the DOGE bros who claim to be sniffing out wasteful expenses from the federal budget.
Bottom line: I’ve learned my lesson about predicting the future. But we can look at Musk’s recent history for a sense of where all of this is going.
Buying Twitter in 2022 was, by traditional metrics, a financial disaster. He killed the platform’s brand, both literally and spiritually, by renaming it X, welcoming neo-Nazi accounts and ultimately tanking its value by an estimated 80%. But in the end, $44 billion turned out to be a small price to pay for what Musk ultimately got: a political megaphone he could deploy to help elect a president willing to let the wannabe tech oligarch have control over the federal government’s infrastructure.
Now, under the umbrella of DOGE, Musk has an opportunity to expand and protect his business empire with virtually no restraint. President Trump on Monday sought to reassure folks that “Elon can’t do, and won’t do, anything without our approval.” But so far, at least, Musk hasn’t reached the end of his leash.
My August headline read, “Let’s throw cold water on the Musk working for Trump thing.” And in some sense, I stand by that. Musk is working in the White House, but, as ever, Musk is working for himself.
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