Just months after pouring nearly $300 million into backing Donald Trump’s reelection bid, billionaire Elon Musk now faces the looming risk of losing both his tech empire and his unprecedented influence in Washington.
Following a public war of words on social media with President Trump in recent days, billionaire Elon Musk now faces the risk of losing not only his personal fortune but also his unprecedented influence in Washington.
Billions in Wealth Evaporate
After contributing at least $288 million to help Trump and the Republican Party reclaim the White House, Elon Musk reaped immediate rewards: Tesla’s stock soared, his personal wealth ballooned, and his political clout in Washington reached its zenith.
According to a June 9 analysis by The Washington Post, Musk and his companies have secured at least $38 billion from the government over the years through contracts, loans, grants, and tax incentives—a foundation that propelled him to become the world’s richest individual.
However, within just a few months, the tide turned. Public dissatisfaction with Elon Musk surged as his actions, statements, and policies backfired. Images of Tesla vehicles being vandalized, torched, or ridiculed became increasingly common.
Recently, a heated confrontation with President Trump dramatically shifted the narrative.
According to Bloomberg, a public spat between Musk and Trump last week wiped out $34 billion of the billionaire’s wealth, marking the second-largest single-day loss ever recorded on the Bloomberg Billionaires Index.
Beyond the hit to his personal fortune, Tesla—Musk’s primary source of wealth—is faltering. The company’s most recent quarterly profit plummeted by 71%, electric vehicle sales dropped by double digits, and its stock has slid over 20% since the start of the year.
A key concern for investors is Trump’s proposed spending and tax bill, which could eliminate the $7,500 tax credit for electric vehicle buyers—a critical driver of Tesla’s growth for years.
JPMorgan analysts estimate that, if enacted, this policy could slash Tesla’s annual profits by an additional $1.2 billion.
“The question is how much pain Trump wants to inflict,” said Gene Munster, an analyst at Deepwater Asset Management.
Notably, major shareholders are growing restless. Last week, a group of investors sent a letter demanding that Tesla’s CEO commit to spending at least 40 hours a week on the electric vehicle company, following his prolonged focus on politics and other ventures.
Threatening an Entire Business Empire
The conflict with President Trump not only impacts Tesla but also imperils other technology companies within Elon Musk’s vast business empire.
SpaceX, the company currently providing satellite launch services for the Pentagon and serving as NASA’s sole partner in transporting astronauts to the International Space Station, faces threats from Trump to cancel its contracts, sending shockwaves through federal agencies.
While such an outcome is considered unlikely, federal officials have begun urging SpaceX’s competitors to accelerate investments to reduce reliance on Musk’s company.
For years, SpaceX has leveraged billions in government funding to build a robust commercial business model. However, it remains heavily dependent on budgets from NASA and the Department of Defense.
According to investor Ross Gerber, a former supporter of Musk, a reduction in government support could slash SpaceX’s valuation by half.
Moreover, Musk’s other ventures, such as xAI (a competitor to OpenAI) and Neuralink (focused on brain-chip technology), operate in highly regulated fields and could face challenges if the tech billionaire loses political backing.
Over the past six months, Musk has been a key ally to President Trump, holding a significant role in the Department of Government Efficiency (DOGE) and overseeing major personnel and budget cuts. Now, ironically, he finds himself targeted by the very administration in Washington.
Once an influential insider, Musk now risks being sidelined, potentially inflicting massive damage on the intricate ecosystem of enterprises he has built over the past decade.
