How can Elon Musk benefit from Trump's presidential victory?!
As Donald Trump celebrated his presidential victory early Wednesday morning, Elon Musk was right there with him. "A star is born. Elon," Trump said on stage at his Mar-a-Lago resort, thanking the world's richest man for spending two weeks campaigning in Pennsylvania.
Musk, who poured at least $130 million into a pro-Trump campaign effort, has turned Trump support into another full-time job in recent months, funding a swing state operation to register voters and using his social media platform X to constantly promote the preferred candidate, often with misinformation.
Musk's investment in Trump is already paying off, even though Trump doesn't take office until January 20. Tesla shares rose 15% on Wednesday, adding about $15 billion in paper value to Musk's net worth. The electric vehicle maker faces headwinds in the global market from China-based competitors, declining European sales and growing consumer distaste for its political views.
But with Musk edging closer to Trump and the president-elect promising to scale back the kinds of regulations Musk hates, Wall Street is betting that Tesla, on balance, will be a beneficiary. For Musk, the potential gains go beyond Tesla.
During his victory speech, Trump also praised Musk's SpaceX and thanked Musk for sending Starlink Wi-Fi terminals to hurricane-hit parts of the US, which leaves Musk with plenty of reason to be optimistic that a second Trump administration will pay healthy dividends for him. and his businesses.
Musk's companies are currently involved in a number of investigations and lawsuits by federal agencies relating to matters including alleged violations of securities law, workplace safety, labor and civil rights violations, federal environmental laws, consumer fraud and vehicle safety defects.
Given the executive branch's extraordinary control over federal regulatory bodies, Musk can look forward to regulators and intelligence agencies closing some or all of the 19 known federal investigations and lawsuits pending against Tesla, SpaceX and X, known as formerly as Twitter.
At New York's Madison Square Garden on Oct. 27, Musk was one of many Trump fans and surrogates to speak at an all-day rally. Much of the coverage of the event focused on comedian Tony Hinchcliffe's bigoted taunts, including his description of Puerto Rico as a "floating island of trash."
Musk was introduced by Cantor Fitzgerald CEO Howard Lutnick, who called the Tesla CEO "the greatest capitalist" in US history. Lutnick said he and Musk were co-founders of the envisioned "Department of Government Efficiency," and he asked Musk how much he thought could be cut from the federal budget.
Musk replied "at least $2 trillion," which is more than the federal government's discretionary budget of $1.7 trillion. The remark drew a shout from Lutnick and applause from the crowd.
Musk did not specify what he sought to cut, but he has previously accused agencies including the SEC, the Environmental Protection Agency and the Federal Aviation Administration of regulatory violations or violating his free speech rights.
He also accused the Biden administration of hiring too many IRS personnel and has vocally opposed a so-called billionaire tax. Having a role on an appointed commission could give Musk power over federal agency budgets, staffing and the ability to push for the elimination of inappropriate regulations.
Musk also said during a Tesla earnings call on Oct. 23 that he intended to use his influence with Trump to create a "federal approval process for autonomous vehicles." Currently, approvals are done at the state level.
Tesla has been working on driverless technology for more than a decade, but has yet to produce a robotaxi or vehicle that is safe to operate without a human ready to steer or brake at all times. Additionally, a Trump administration may agree to increase government work with his companies.
Musk's newest startup, xAI, is developing large language model and generative artificial intelligence software that aims to compete with similar products from Microsoft-backed OpenAI, Meta and others.
Meta recently announced that its open source Llama models were available to US government agencies in the field of national defense and security. And OpenAI is already working with the US military after adding a retired US Army general and former director of the National Security Agency to its board in June.
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