Bloomberg: "Oligarch" Musk's New Venture

Authors: Max Chafkin, Dana Hull

Compiled by: Luffy, Foresight News

On election day afternoon, Elon Musk was at a polling station in South Texas, and afterward, he took a private jet to Mar-a-Lago in Palm Beach, Florida, to attend Donald Trump's vote-counting party. Along the way, Musk held an impromptu political rally. He posted a live stream link on social network X. "Only a few hours left," Musk said, as the plane's engines hummed, with about 100,000 people listening to his live stream, "so make sure everyone is urging their friends and family to vote, vote, vote."

Before this year, Musk was running six companies: Tesla (electric vehicles), SpaceX (rockets), Neuralink (brain implants), Boring Co. (tunnels), xAI (AI chatbot), and X (Twitter). But in May of this year, he added a seventh company: America PAC. This is a political action committee that spent over $170 million from its inception until the election.

Even more surprising is Musk's personal involvement in this work. He temporarily moved to Pennsylvania, where he traveled across the state, held marathon Q&A sessions in suburban halls, and turned his personal X account into a rapid response action site against the right. Many of the jokes he spread were related to sexism or racism, or both. In the final days of the campaign, a large number of his posts expressed outrage over the euthanasia of a porn star's pet squirrel.

Spending categories of Musk PAC, Source: Federal Election Commission

Musk's signature rebellious humor combined with "brazen" behavior proved successful, perhaps because Trump is a perfect match for these traits. On election day, the former president, who had been impeached twice and convicted 34 times, not only mobilized the usual older white voters but also attracted a younger, more diverse, male-dominated group. In other words, those who like Elon Musk. "He lowered the bar for becoming a Trump supporter," said Josiah Gait, vice president of the political marketing firm Harris Media.

Candidates supported by Musk PAC, Source: Federal Election Commission

"The Democrats have almost involved all celebrities," Musk said during the live stream, "They have a huge bias against traditional mainstream news." He told the audience that Democratic politicians deliberately introduced "illegal immigrants" to "flood the votes in swing states, so there really isn't a real election." Like much of what Musk has said over the past two years, these statements are at best misleading. The immigrants he disparaged in his conspiracy theories are not "illegal immigrants," but asylum seekers who legally reside in the U.S., pay taxes, but do not have voting rights.

Musk is clearly not a weakling. His alliance with Trump is a classic strongman story. One protagonist is a provocative, domineering billionaire, and the other is also a domineering billionaire, who happens to be the richest person in the world. It's also a story about money. We do not know the full extent of Musk's financial contributions to Trump's election, but it is at least over $132 million, potentially reaching $200 million in total. How much return can these contributions bring in the next four years? In the three days following the election, Tesla's market value rose by 25%, increasing Musk's personal net worth by $50 billion, reaching over $300 billion.

Musk presenting a $1 million check to Kristine Fishell at Pittsburgh City Hall. Image Source: Getty Images

Trump promised some returns: rocket contracts for new Mars missions, rules to support Musk's upcoming self-driving taxis, and decisions in his administration about which government projects to cut and which to keep. Trump and Musk referred to this hypothetical policy combination as the "Department of Government Efficiency," a name derived from Musk's fondness for the acronym DOGE, which is the symbol of his favorite cryptocurrency, Dogecoin. In his victory speech, Trump mentioned Musk, saying, "He is a special person, he is a super genius. We must protect our super geniuses."

Soon, Musk may be given a more accurate title: oligarch. This term applies not only to him but also to Jeff Bezos, Sam Altman, Sundar Pichai, Satya Nadella, and several other business tycoons who struck various poses after the election, from sycophantic flattery to complete obsequiousness, hoping to get what they want from Trump. Their main concerns seem to include favorable treatment for mergers (Nadella, Pichai), lenient regulations on AI (Altman), and avoiding retaliation for news published in their own outlets (Bezos).

Will their efforts pay off? Trump's past record does not provide them with enough confidence. After Bezos decided to withdraw his support for Kamala Harris, The Washington Post faced a wave of cancellations, losing 10% of its subscribers within days. This suggests that executives and investors who have driven up Tesla's stock price have not fully grasped the potential negative impacts.

In the days following the election, Trump and Musk had closer contact. Musk actually camped out with Trump's inner circle at Mar-a-Lago, appearing in family photos and joining Trump on calls with world leaders. So far, the president-elect has viewed Musk both as a trophy and a confidant, not shying away from potential national security issues, such as having Musk call Ukrainian President Zelensky or threatening to withdraw from NATO in retaliation for Europe trying to regulate Musk's companies.

Musk with members of the Trump family at Mar-a-Lago. Image Source: Twitter of Kai Trump

Meanwhile, Musk has continued to support Trump vigorously on Twitter, suggesting he might fire 80% of government employees, abolish the Department of Education, and ramp up propaganda against the Federal Reserve's unconstitutionality.

This fervor is unlikely to last. Moreover, if Trump wants to govern effectively, it certainly cannot continue.

Musk is talkative and quick-witted. At 53, he understands the instincts of young men, perhaps because he often behaves like a teenager in many ways. This may create a disconnect with analysts and investors, who do not see fart jokes, the numbers 420 and 69 as comedic gold, and cannot understand that for Musk and his fans, dullness is the point.

Outsiders may find it hard to realize that while X is a commercial failure, it has been a massive political success. Musk transformed an unpopular social media network into a distribution platform for right-wing media, fans, and quite a few genuine white supremacists. X has lost a large number of users and advertisers, leading to a nearly 80% drop in the company's value since the acquisition in 2022. But it still has a large young audience interested in Trump, sports, video games, and cryptocurrency. A poll conducted in November by YouGov Blue, representing left-wing groups, found that the primary source of news for men aged 18 to 29 is social media, with X being the most popular, surpassing YouTube and TikTok.

When Musk began funding America PAC, he was targeting this group. The organization has three basic goals to help Trump: registering new voters, encouraging supporters to vote early, and getting those who might not vote to vote. It arranged paid canvassers instead of volunteers and invested heavily in social media ads that catered to the "marginal lord" sentiment of Trump's audience. One 15-second ad starts with a bearded young man lazily lying on a couch, with a rude voice saying, "If you don't participate in this election, Kamala and the crazies will win," then describes Trump as an "American bad guy." Another ad warns that Harris will ban pickups, red meat, and Zyn nicotine pouches. A third ad calls Harris "a capital C." ("C" stands for "communist.")

Video ads from Musk PAC. Source: YouTube

The early days of the PAC were chaotic. Operators complained about unpaid bills, unstable decision-making, and violations of standard labor practices, mirroring long-standing complaints from Tesla and SpaceX employees. However, Musk's efficiency was astonishing: political campaigns typically take years to build, but Musk and his aides recruited an army of 2,000 people in just a few months. Andrew Romeo, a former advisor to Florida Governor Ron DeSantis, was in charge of North Carolina. David Rexrode, who worked for former Virginia Governor Glenn Youngkin, was responsible for Pennsylvania and Michigan. Chris Carr, Trump's political director in 2020, was in charge of Arizona and Nevada. Most canvassing efforts tried to save money by sending canvassers to more densely populated areas, where they could visit as many homes as possible. But a person familiar with the PAC's operations said Musk's funding allowed state governors to send canvassers to more rural areas, where Trump could increase his vote count. The anonymous source stated that Musk's PAC visited about 11 million households.

Musk also spent lavishly in other ways. When the campaign team rented contact lists to send emails and texts to potential voters, each lead typically cost no more than $10. Musk built his list from scratch. He offered $47 to anyone who referred registered voters from swing states to the America PAC petition, which asked for their email addresses and phone numbers. Musk later raised the offer for Pennsylvania registered voters to $100. He then announced a daily $1 million giveaway to a lucky petition signer. This proposal could be considered illegal, prompting a lawsuit from the Philadelphia district attorney attempting to stop the giveaway, but it also attracted media attention. Musk's petition ultimately collected over a million names. "That's a nice number," Gait from Harris Media said.

Musk campaigning for Trump at Madison Square Garden. Source: Getty Images

But Musk's most significant move was injecting his personal brand into the PAC's work. On October 5, he appeared on stage at a Trump rally in Butler, Pennsylvania, right at the site where Trump narrowly escaped an assassination attempt. He didn't just speak; he jumped into the air, donned a black MAGA hat, and declared himself "Dark MAGA." (The campaign team immediately adopted the term, meaning "too much in love with Trump, in a scary way.") Musk held a series of events across Pennsylvania, attracting young audiences who liked him but might not necessarily know much about Trump. Then, on October 27, he appeared at Trump's showcase rally at Madison Square Garden in New York, where he received more attention than Trump's campaign partners and his children.

The day before the election, the most popular podcast host, Joe Rogan, interviewed Musk, just as he had interviewed Trump a week earlier. "This is a message for the men," Musk said, with Rogan nodding in agreement. "Vote like your life depends on it." Rogan, who supported Bernie Sanders in 2020, said he now supports Trump and explicitly credited Musk for it. "The great and powerful Elon Musk," Rogan later wrote on X. "I think he made the most compelling case for Trump, and I completely agree with him."

In the days following Trump's victory, Musk was not the only wealthy individual whose net worth increased. The biggest winners included investors in private prison companies, cryptocurrency firms, and nuclear energy producers. The idea behind these so-called Trump trades is that if Trump expels millions of immigrants, private prisons will benefit; if Trump establishes the strategic Bitcoin reserves he promised, cryptocurrency values will rise; and nuclear companies will benefit from Trump's claims of building new reactors.

Musk's own Trump trades followed a similar logic. During the campaign, Trump stated that his administration would fund Musk's manned Mars mission plans before 2028. This could bring billions or even hundreds of billions of dollars in value to SpaceX, which has already launched rockets for NASA and the Department of Defense.

A more direct potential return involves SpaceX's satellite internet service, Starlink. Musk has been complaining about being excluded from a $42.5 billion subsidy program passed during President Biden's term, which funds broadband for rural areas. Blair Levin of telecom research firm New Street Research stated that the government could give some of that funding to Musk instead of using it to lay fiber.

Other deals between Musk and Trump are also speculative and nearly fanciful. Tesla's stock price seems to have risen because Trump would unilaterally legalize the self-driving taxis the company plans to deploy. Musk suggested this during Tesla's earnings call a few weeks before the election. "If there were a Department of Government Efficiency, I would do my best to help make this happen," Musk said, adding that these regulations would apply to all car companies, not just Tesla. The problem is that Tesla has not actually developed a functioning self-driving taxi yet.

Moreover, while many Tesla investors fit the profile of Trump voters or Musk fans, the actual buyers of Musk's electric cars are often middle-class centrists concerned about climate change. During Trump's previous term, Tesla customers responded to his ban on Muslim immigration by canceling orders, even though Musk had only an indirect relationship with the Trump administration at the time.

Then there is the interpersonal relationship between Musk and Trump. Almost every influential business leader closely associated with Trump has ultimately been forced out of his circle. Trump's influence has a very short half-life, to the extent that there is a joking shorthand "Scaramucci," referring to investor and former Trump confidant Anthony Scaramucci's 10 days as White House press secretary before being fired in 2017. "Elon Musk and others are having a great time with Donald Trump right now," Scaramucci said in a radio interview in early November. "But they will go to hell with him; it's just a matter of time."

Even if Musk can endure until the Scaramucci era, and even if his businesses can withstand customer boycotts, neither Musk nor Trump is particularly popular. (A poll by NBC News at the end of September showed Musk's approval rating at 34%; as of November 11, FiveThirtyEight's polling average showed Trump's approval rating at 44%.) If Trump wants to fulfill Musk's promise to cut the federal budget by $2 trillion, it will almost certainly involve cuts to Social Security and some of the most popular government programs. This would provoke fierce opposition, not only from Democrats but also from Republicans. Even if Republicans win the House, their control over Congress would be quite limited.

"Musk may act like an elected oligarch, but America is not an oligarchy, at least not yet," Bill Allison said.