Elon Musk, founder of SpaceX and Tesla, is considered one of the most influential billionaires in the world. His business empire spans many fields, from electric vehicle manufacturing (Tesla), aerospace technology (SpaceX), to artificial intelligence (xAI), brain-computer interfaces (Neuralink), social media (X - formerly Twitter), and tunneling company Boring Company. With his new role at 'Department of Government Efficiency', Musk is becoming increasingly close to the centers of power in the U.S. government.
Behind Musk's 'Streamlined Government' Plan
According to CNBC, SpaceX, Musk's aerospace company, is a prime example of the close relationship between his business and the U.S. government. According to research from FedScout, SpaceX has received over $19 billion from federal contracts.
Under Trump's second presidential term, many more lucrative contracts may emerge. According to FedScout CEO Geoff Orazem, SpaceX is on track to rake in billions of dollars annually from key contracts with the federal government in the years to come.
However, the relationship between Musk and federal agencies is not just limited to cooperation. Musk's company is often closely monitored, facing numerous investigations and penalties.
The Federal Aviation Administration (FAA) recently fined SpaceX $633,000 for violating licensing regulations, prompting Musk to become furious and accuse the FAA of 'overreach'. Tesla is also being investigated by the National Highway Traffic Safety Administration (NHTSA) for incidents related to its autonomous driving system.
Although frequently criticizing the government for 'stifling innovation', Musk and his companies still heavily rely on federal contracts. Photo: Bloomberg.
Lora Kolodny, a technology reporter for CNBC, stated: 'The best way Elon Musk and his companies benefited from the Trump administration is through deregulation, providing fewer resources to federal agencies tasked with overseeing him and his businesses.'
The billionaire has been selected by President Donald Trump to co-lead the 'Department of Government Efficiency' (DOGE). This is a new committee aimed at reducing regulations and government costs.
According to the New York Times, the idea of establishing DOGE actually originated from Musk. In an interview with Trump on X in August, Musk repeatedly suggested this idea. The CEO emphasized that it would ensure taxpayer money is used more efficiently.
Musk, along with entrepreneur Vivek Ramaswamy, clearly outlined DOGE's goals in an article in the Wall Street Journal: 'Eliminate unnecessary regulations, streamline the bureaucracy, and save costs.'
They argue that many current regulations were not passed by Congress. They can be nullified by executive orders. They also call for a comprehensive audit of agencies, emphasizing examples like the Pentagon repeatedly failing seven times in audits.
Kathleen Clark, an ethics lawyer and former advisor to the District of Columbia Attorney General's office, noted that Musk 'has had very controversial interactions and entanglements with regulatory agencies'. 'It is entirely reasonable to believe that what he brings to this federal audit is bias, resentment, and his own financial interests,' the lawyer said.
Economic Benefits If Musk Enters Politics
In fact, Musk and his companies frequently question federal regulations, especially when they threaten to slow down their expansion plans.
A prime example is the Starship test launch, SpaceX's latest rocket in October. NASA has agreed to pay $4.4 billion to send astronauts to the surface of the Moon in two future missions. So far, Starship has not carried any humans.
But the Federal Aviation Administration delayed this test launch for weeks, partly due to concerns about the harm SpaceX has caused to wildlife near the launch site in Texas. The delay made Musk angry.
His other companies also frequently clash with various federal agencies, from the National Highway Traffic Safety Administration (NHTSA) to the U.S. Securities and Exchange Commission (SEC). Tesla - Musk's electric vehicle manufacturing company - is currently facing five investigations by the NHTSA regarding its self-driving system and traffic safety.
Additionally, Neuralink, Musk's brain implant company, was previously fined by the U.S. Department of Transportation for violating hazardous materials transport regulations. SpaceX is also being sued by the Department of Justice for allegedly refusing to hire refugees and those granted asylum based on their nationality status.
One of the most intense conflicts between Musk and federal agencies occurred in 2018. The SEC accused him of securities fraud. The case revolved around Musk's famous tweet about taking Tesla private at $420 per share, accompanied by the claim that he had 'secured funding'. As a result, Musk had to resign as Tesla's chairman and the company was fined $20 million.
Christopher Phelps, a professor of modern American political history, noted that Musk 'benefits from a lot of deregulation measures he proposes'. 'I think having a billionaire running major corporations in charge of federal deregulation projects is inherently full of conflicts of interest,' he stated.
The relationship between Musk and Trump is described by Professor Phelps as transactional. Musk has publicly supported Trump in the 2024 election campaign while contributing about $200 million to the campaign.
Thomas Gift, a political science professor at University College London, stated: 'Musk has had to bear significant personal and political risks by supporting Trump. Much of his activities as well as his flamboyant words reflect his ideological commitment to the goals he believes in.'
Therefore, the new role 'gives him a lot of symbolic power and could be the strength to accomplish the most important things for him,' Professor Phelps concluded.