Behind the extravagant spending, the grudges and entanglements between Musk and Trump.
Written by: Tuo Luo Finance
If one were to mention how this U.S. election differs from previous ones, the ever-eloquent former President Trump might express numerous grievances, such as the sudden change in leadership among competitors, the loss of fundraising advantages, and personal assassination attempts. However, if asked who he is most grateful to in this election, Musk would undoubtedly be one of Trump's answers.
In this year's election, Musk unexpectedly and resolutely sided with Trump, not only spending $75 million in campaign funds in the third quarter to show his determination but also vigorously campaigning on public platforms. Recently, he even launched a lottery project to rally public support. In terms of both manpower and funding, Musk's contributions can be described as exhaustive.
Such a clear stance from a highly influential and controversial entrepreneur is not a wise move. In an election where the outcome is uncertain, a slight misstep could lead to a capsized party ship, and the loser faces not only political failure but also potential risks to personal safety.
Rewind a few years, and Musk and Trump were clearly not on friendly terms. Their verbal sparring often played out on public platforms, with Trump even mocking Musk for begging for subsidies at the White House. What could have led Musk to bury the hatchet and offer such heartfelt assistance?
Amid the precarious undercurrents of the election, the business of money and power is also secretly underway.
01 Momentum Boost, Musk's Lavish Support for Trump
Just recently, Trump stated during a speech, "I called Elon, and he gave me the best support." To receive such gratitude from a presidential candidate indicates that Musk's support is indeed significant.
In terms of financial backing, since clearly siding with Trump in July, describing Musk's spending as extravagant is not an exaggeration. According to data disclosed by the Federal Election Commission, in the third quarter, Musk donated $75 million to the America PAC supporting Trump. Although this amount was anticipated in the market and slightly lower than the previously predicted $45 million per month, Musk has already become the largest donor aside from Trump's staunch supporter and casino heir Sheldon Adelson (who donated $95 million).
From a financial perspective, Musk's help is akin to a timely gift, as Trump has long struggled to raise funds for this election.
Data shows that this year, the Democratic Party has maintained a consistent advantage, and due to a mid-campaign leadership change, fundraising has become even more unified. Since becoming the Democratic leader at the end of July, Harris has raised $1 billion, and in the third quarter alone, her fundraising committee raised $633 million, four times the amount raised by Trump's equivalent fundraising department during the same period.
In response, although Trump does not show it openly, he is very dissatisfied behind the scenes. According to the New York Times, at a donor dinner in September, Trump bluntly stated that those involved, including donors, need to do more to appreciate and help him. The meaning of such remarks at a dinner is quite clear. As for fundraising, Trump has gone to great lengths, selling tickets for conferences, raising funds for crypto projects, and exploring various channels while pressuring supporters. In April, Trump even claimed he would have large oil and gas companies raise $1 billion for him, and in July, he texted his top supporter Adelson asking for a $250 million donation.
However, for the election, funding is just the most intuitive factor; while important, large sums of money do not guarantee victory. Beyond funding, Musk's "help" should not be underestimated.
First, with 200 million followers and high visibility, Musk, who controls the large public opinion platform X, has already created a stir just by announcing his support. In August, Musk took action by hosting an exclusive Space interview to boost Trump's campaign, with millions online marking the campaign's kickoff. Trump also took the opportunity to mend ties with the X platform, continuing his usual public relations strategy. Since then, their relationship has grown increasingly close, with a strong public relations synergy.
Musk's X platform has 200 million followers, source: X
By October, Trump returned to Butler, Pennsylvania, and held a campaign rally, with Musk invited to join him, wearing a MEGA hat, showing support on stage, and delivering a speech praising Trump's masculinity, creating a scene of mutual prosperity.
Recently, Musk made another bold move by randomly selecting one participating voter in Pennsylvania each day to give away $1 million. The petition activity was initiated online by Musk's "America PAC," calling for support for free speech and the right to bear arms. According to the rules, starting from October 19 until Election Day on November 5, any voter in Pennsylvania, Arizona, Georgia, Michigan, Nevada, North Carolina, and Wisconsin who signed the petition would have a chance to win $1 million each day; the first three days of the "lottery" were limited to Pennsylvania voters, after which voters from all seven states would be eligible.
Previously, Musk had launched a campaign for Pennsylvania voters, offering "$100 to participate in the petition, and an additional $100 for referring someone," while for other swing states, it was $47. Not only is there new recruitment, but also a viral effect; one cannot help but marvel at Musk's deep understanding of internet operations. Although it seems like just initiating a petition to defend free speech and the right to bear arms, it is evident that this activity aims to attract supporters of pro-Trump rhetoric, with the ultimate goal of voting for Trump.
Needless to say, the act of buying votes exists in compliance risk in any country; even if packaged as a lottery, the proposal directed at voters clearly violates prohibitions. Pennsylvania's Governor Josh Shapiro has stated that law enforcement should pay more attention to this. Nevertheless, Musk's lottery initiative is still ongoing, with two lucky winners already announced.
A gentleman does not stand under a dangerous wall, yet Musk's actions do not align with this adage. Risking compliance to rally support and spending huge sums to stand on stage, not to mention frequently criticizing another candidate as a puppet in public, Musk has already invested too much in this election.
02 From Clashing to a Honeymoon, the Grudges and Entanglements Between Musk and Trump
That said, what magic does Trump possess that makes Musk go to such lengths to pave the way for him?
Rewind to 2017, when Trump took office as president, and the relationship between the two was relatively amicable. Trump even invited Musk to serve as a business advisor at the White House, but the partnership lasted less than six months. After Trump resolutely withdrew from the Paris Climate Agreement, Musk believed that the agreement would hinder Tesla's push for clean energy, leading to their eventual split.
Afterward, as a representative of technology and immigration, Musk gradually leaned toward the Democratic Party, and his relationship with Trump reached a freezing point, with both engaging in verbal clashes on social media multiple times. In 2022, Musk bluntly stated that Trump should step down, and Trump retorted, "Musk once came to the White House asking me to help his subsidy-dependent projects, whether it was electric cars that didn't last long enough or self-driving cars that frequently crashed, or rockets without a destination; without these subsidies, Musk would be worth nothing."
Trump also stated, "He told me at the time that he was a loyal fan of Trump and a Republican, and if I made him kneel, he would kneel." Perhaps feeling this was not enough to vent his frustration, he even attached a photo of Musk standing beside him with a smile, full of sarcasm.
In the adult world, there are no permanent enemies, and less than two years later, the two had returned to a honeymoon phase. When asked about the reason, Musk responded in an interview that supporting Trump was due to the current Democratic Party's views and values not aligning with his own, and that the Democratic Party's tolerance of racial diversity accelerated the division in America. From Musk's somewhat populist and authoritarian admiration characteristics, this statement has some validity. However, to make such a 180-degree turn, ideology alone is clearly insufficient; the core reason boils down to one point—interests.
Starting with the core shift in Musk's relationship with the Democratic Party, Musk initially supported Biden because of his promise to vigorously develop clean energy and support electric vehicle development. Development did occur, but the Biden administration seemed intent on excluding Tesla. In August 2021, the Biden administration organized an electric vehicle summit and signed an executive order at the event, aiming for half of all new cars sold in the U.S. to be zero-emission vehicles by 2030. Interestingly, this event invited General Motors, Ford, and Stellantis but did not invite the largest electric vehicle giant, Tesla. The reason at the time was due to pressure from the United Auto Workers, a long-time ally of the Democratic Party.
Thus, a rift was born, and as Musk's companies continued to grow, conflicts with the government increased over issues such as the billionaire wealth tax, opposition to union power, and corporate regulatory policies. During Biden's term, Tesla, SpaceX, and other Musk-owned companies became targets of at least 20 regulatory investigations or reviews, further fueling the tension between the two.
Musk's companies are under scrutiny from multiple U.S. regulatory agencies, source: New York Times
On the other hand, taking SpaceX as an example, according to the New York Times, last year, SpaceX signed nearly 100 different contracts with 17 U.S. federal agencies, securing $3 billion in funding commitments, making the government SpaceX's largest financial backer.
However, just last month, the Federal Aviation Administration (FAA) initiated a process to fine SpaceX $633,009 due to the company's violations of permit requirements during two launches in Florida last year, which posed safety risks. Recently, during a test flight of the Starship, the FAA delayed the test flight for several weeks, citing potential harm to wildlife. Not long ago, the U.S. Department of Justice once again sued SpaceX, claiming the company refused to hire refugees and asylum seekers based on their citizenship.
In addition to regulatory scrutiny, subsidies are no longer easy to obtain. The Federal Communications Commission (FCC), which oversees SpaceX's launch of internet satellites, revoked SpaceX's application for $886 million in federal funding to provide internet access to rural areas, citing its provision of services in non-rural areas.
Tesla is no exception; the National Highway Traffic Safety Administration has launched five investigations into Tesla, including complaints about unexpected braking, loss of steering control, and collisions while in "autopilot" mode.
Musk has long harbored grievances, believing he is a victim of political persecution. In 2022, he harshly criticized U.S. regulatory agencies as "jerks." His personal life also played a crucial role; the transition of his son led him to view the Democratic Party's ideology as overly radical, which was the catalyst for Musk's split with California and his subsequent acquisition of Twitter. After various events, Musk gradually embraced the Republican Party, officially supporting Trump on July 13 of this year.
03 Behind the Support, Underlying Currents of Money and Power Transactions
Musk's support for Trump is naturally due to the commitments they reached.
Notably, although Trump's attitude softened after allying with Musk, stating he would support electric vehicles, he was not an electric vehicle enthusiast before this. As a result, environmentally conscious liberals began to boycott Tesla. According to data from the California New Car Dealers Association, Tesla's sales in California, the largest electric vehicle market in the U.S. and a stronghold of the Democratic Party, fell by 17% in the second quarter.
So what exactly did Trump promise that would make Musk take such significant risks?
A government efficiency department has come to light. As early as August 12, during a conversation between Trump and Musk, it was mentioned that if elected president, Musk might receive a position in his administration. A few days later, Musk posted an AI-generated image on X, labeled "Department of Government Efficiency," but at the time, the market largely viewed it as just a meme.
On September 5, Trump again referred to this position, stating he would adopt Musk's suggestion to formally establish a "Government Efficiency Committee" led by Musk. Trump did not provide detailed explanations about how the committee would operate, only stating that once established, it would be responsible for "comprehensive financial and performance audits of the entire federal government" and would propose reforms to reduce government spending. On October 18, Musk also disclosed this plan, stating that the department would operate like a company, improving the efficiency of government use of taxpayer funds while streamlining the departments responsible for expenditures.
It seems that introducing external experts to enhance transparency and improve funding efficiency is appropriate, especially since final expenditures still require congressional approval. However, looking closely at this function, the committee would suggest cuts to federal projects, potentially reducing bureaucratic redundancies, effectively taking on the role of a regulatory body. As a long-time contractor for federal projects receiving substantial subsidies, Musk could easily face conflicts of interest.
For example, SpaceX once stated in a declaration that "the paperwork for obtaining government permits for rocket launches takes longer than designing and building the actual hardware." In this case, does the so-called efficiency department have the authority to "suggest" streamlining these regulatory laws? Furthermore, does Musk have the capability to reduce his competitors' and the government's contract expenditures, thereby allowing his own company to gain more benefits?
Of course, the operational model of the committee has not been disclosed, but it is certain that the underlying conflicts of interest are already brewing. As for why Trump would choose Musk, it is easy to understand. During his previous term, Trump was still a political novice; despite the establishment turning to him due to Hillary's critical misstep, Trump's blunt America First ideology quickly alienated the establishment, which was heavily invested in globalization, significantly affecting his governance efficiency.
This year, Trump learned from his mistakes and began to cultivate a party more suited to himself, choosing a younger and more manageable Pence as his vice-presidential candidate. It is not surprising that he would select Musk, who shares a similar personality, significant influence, and is also a businessman. Musk's opposition to the entrenched Democratic Party, which had previously sidelined him, made it difficult for him to gain a prominent role there. However, on the relatively inexperienced Trump side, the importance placed on him was markedly different, and he was more likely to advance further in his political career. The two hit it off, and to the market, it appeared as a transition from "clashing" to a "honeymoon."
However, their sweet relationship poses a significant threat to the other party. Musk has repeatedly stated in public that he does not wish to be involved in politics, but feels compelled to do so; otherwise, he fears for his personal safety if the Democrats come to power, even mentioning the increased likelihood of assassination attempts. Whether Musk, who has acquired a public opinion platform and openly supports Trump, truly lacks political ambitions is debatable, but the prison time that could result from failure is a very real possibility. If it comes to that, the business platforms Musk takes pride in, such as SpaceX, Tesla, Neuralink, and X, would also be widely affected. In this regard, Musk's frequent emphasis on assassination in public clearly serves to instill caution in the Democrats, perhaps as one of his important means of self-protection.
It is worth mentioning that Musk, with a net worth of $250 billion, does not hold a large cash flow; his stock assets are his core wealth, with Tesla stock accounting for 60% of his net worth. Therefore, the donations for the election and subsequent promotions are not an easy expenditure for Musk.
Ultimately, the significant investment of manpower and resources stems from the fact that this election is a do-or-die situation for Musk.
Fortunately for Trump, he is currently performing well. Although the latest polls show Harris with a slight edge at 46% compared to Trump's 43%, Trump's support in swing states has clearly rebounded. As of October 21, polls indicate that Trump is leading in 8 out of 9 swing states. In the betting market, Trump's winning probability has reached 57.9%, far surpassing Harris's 40.8%, and the crypto prediction market shows Trump leading Harris by about 30 percentage points. If everything follows the data projections, Trump's assumption of office may just be a matter of time. In response, the crypto market has also reacted, with BTC breaking through $66,000 and DOGE riding the wave of excitement.
Of course, it is not over yet, and both fortune and misfortune are unpredictable. However, it is certain that Musk and Trump, this pair of interest-driven allies, are tightly bound together on the same ship.
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