Since publicly backing Donald Trump in July 2024, Elon Musk’s political gamble appears to be paying off handsomely. Musk’s net worth has surged by $170 billion, propelling him to a record $419 billion and reclaiming his title as the world’s richest individual, according to Forbes.
Financial Upsides Amid Stock Volatility
Tesla’s shares have experienced a 20% decline since Trump’s inauguration, yet they remain 35% higher than at the time of Musk’s endorsement. More strikingly, SpaceX’s valuation has nearly doubled, soaring to an estimated $350 billion. Meanwhile, Musk’s artificial intelligence and social media conglomerate, xAI Holdings, recently finalized a $113 billion merger, tripling in value over the past year.
Musk, who invested a staggering $290 million in support of Trump’s 2024 presidential campaign—making him the single largest donor—indicated at the Qatar Economic Forum that he plans to scale back political contributions. “I think I’ve done enough,” he remarked.
Reduced Regulatory Scrutiny and Boosted Federal Support
In return for his political support, Musk has benefited from diminished regulatory pressure and expanded federal backing. Several investigations targeting his companies have either stalled or been dropped outright:
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The Justice Department concluded a discrimination lawsuit against SpaceX.
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The Labor Department ceased its inquiry into Tesla’s hiring practices.
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The National Labor Relations Board abandoned a wrongful termination case involving SpaceX employees.
Strategic Positioning in Federal Projects
SpaceX has emerged as a leading contender for Trump’s ambitious $175 billion “Golden Dome” missile defense initiative. The company currently holds $16 billion in federal contracts, including a recent $6 billion award from the Pentagon in April.
Starlink, SpaceX’s satellite internet arm, is quietly receiving U.S. State Department support. Reports indicate diplomatic efforts have been made to pressure foreign governments, particularly in Africa and Asia, to fast-track regulatory approvals for Starlink’s services.
Domestically, the Federal Aviation Administration (FAA) is trialing Starlink technology for a potential nationwide aviation safety overhaul. Although the FAA has yet to make any formal decisions, Musk’s satellite network could play a pivotal role in modernizing U.S. air traffic communication systems.
Challenges and Public Backlash
Despite these advantages, Musk faces several headwinds. Tesla’s global sales have declined, influenced partly by a public backlash linked to Musk’s involvement with the Department of Government Efficiency (DOGE), an initiative aimed at downsizing federal agencies. Furthermore, tariffs on Chinese imports have driven up Tesla’s supply chain costs.
Public perception is also a concern. A recent Reuters/Ipsos poll found that 58% of Americans hold an unfavorable view of Musk, reflecting growing skepticism around his political entanglements.
Congressional reports have warned of potential conflicts of interest, asserting that Musk wields undue influence over government agencies that regulate his enterprises. A House Democratic report accused him of shaping the regulatory environment to favor his businesses.
Both Trump and Musk deny any misconduct. Trump stated in February, “If there’s conflict, then we won’t let him get near it,” while Musk maintains he has no direct involvement in his companies’ government dealings.
Analysts See Long-Term Potential Despite Risks
Though Musk’s political strategy has sparked public controversy and reputational risks, industry analysts remain optimistic about his ventures. Dan Ives of Wedbush Securities highlighted that with reduced regulatory hurdles, Tesla’s AI and autonomous vehicle prospects alone could be valued at over $1 trillion.
In summary, Elon Musk’s alliance with the Trump administration has delivered substantial financial rewards and eased operational challenges, even as it draws scrutiny and criticism. The coming years will reveal whether this political bet secures Musk’s legacy or fuels further controversy.
