What Does Elon Musk Gain from the Reduction of the US Government?

Elon Musk, the founder of SpaceX and Tesla, is considered one of the most influential billionaires in the world. His business empire spans across various fields, from electric vehicle manufacturing (Tesla), aerospace technology (SpaceX), artificial intelligence (xAI), brain-computer interfaces (Neuralink), social media (formerly Twitter), to The Boring Company tunneling company. With his new role at the "Department of Rationality Efficiency," Musk is getting closer to the power centers of the U.S. government. Behind Musk's "Lean Government" Plan According to CNBC, SpaceX, Musk's aerospace company, is a classic example of the close relationship between his business and the US government. According to research from FedScout, SpaceX has received over $19 billion from federal contracts. During Trump's second presidential term, more lucrative contracts may emerge. According to FedScout CEO Geoff Orazem, SpaceX is poised to earn billions of dollars annually from important contracts with the federal government in the coming years. However, the relationship between Musk and federal agencies is not limited to cooperation. Musk's company is regularly closely monitored, facing numerous investigations and penalties. The Federal Aviation Administration (FAA) recently fined SpaceX $633,000 for licensing violations, causing Musk to be angry and accusing the FAA of "excessive authority". Tesla is also being investigated by the National Highway Traffic Safety Administration (NHTSA) for incidents related to autonomous driving mode. Despite frequent criticism of the government for 'restraint of innovation', Musk and his companies still heavily rely on federal contracts. Image: Bloomberg.

Lora Kolodny, a technology reporter for CNBC, said, “The best way Elon Musk and his companies benefited from the Trump administration was by rolling back regulations, providing fewer resources to the federal agencies tasked with overseeing him and his businesses.” The billionaire has been chosen by President Donald Trump to be the co-leader of the Department of Government Efficiency (DOGE). This is a new commission aimed at reducing government regulations and 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 proposed this idea several times. The CEO emphasized that it would ensure more efficient use of citizens' tax money. Musk and entrepreneur Vivek Ramaswamy have outlined DOGE's goals in an article in The Wall Street Journal: 'Eliminate unnecessary regulations, streamline the administrative machinery, and save costs'. They believe that many current regulations are not passed by the National Assembly. They can be invalidated by administrative orders. They also call for comprehensive audits of agencies, emphasizing examples such as the Pentagon's continuous failure 7 times in audits. Kathleen Clark, an ethics lawyer and former advisor to the Columbia District Attorney's office, said that Mr. Musk "has had controversial interactions and entanglements with regulatory agencies." "It is entirely reasonable to believe that what he brings to this federal audit is prejudice, animosity as well as his own financial interests," the lawyer said. Economic Benefits If Musk Gets Involved in Politics In fact, Musk and his companies often question federal regulations. Especially when they threaten to slow down their expansion plans. A typical example is the Starship test launch, the latest rocket from SpaceX in October. NASA has agreed to pay $4.4 billion to take astronauts to the surface of the Moon in 2 future missions. So far, Starship has not carried any humans. However, the Federal Aviation Administration has postponed this test launch for several weeks, in part due to concerns about the harm SpaceX has caused to wildlife near the launch site in Texas. The delay has angered Mr. Musk. His other companies also frequently confront a variety of federal agencies, from the National Highway Traffic Safety Administration (NHTSA) to the U.S. Securities and Exchange Commission (SEC). Tesla - Musk's electric car company - is currently facing 5 NHTSA investigations related to autonomous driving systems and traffic safety. In addition, Neuralink, Musk's brain implant company, was once fined by the US Department of Transportation for violating regulations on the transport of hazardous materials. SpaceX was also sued by the Department of Justice for allegedly refusing to hire refugees and individuals granted asylum based on their nationality status. One of the most tense 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, with the claim that he had secured funding. As a result, Musk had to step down as Tesla chairman and the company was fined $20 million. Christopher Phelps, a professor of modern US political history, argues that Musk "benefits from a lot of deregulation that he himself proposes." "I think putting a billionaire in charge of large corporations to oversee the dismantling of federal regulations is inherently conflictual," he says. The relationship between Musk and Trump is considered transactional by Professor Phelps. Musk publicly supported Trump in the 2024 election campaign while contributing about USD 200 million to the campaign. Thomas Gift, a political science professor at University College London, said: "Musk has had to bear significant personal and political risks by speaking out in support of Trump. His actions and grandiose words reflect a commitment to the ideals he believes in." Therefore, the new role "gives him a lot of symbolic power and can be a force to accomplish the most important tasks for him", Professor Phelps concludes.