President Trump and Elon Musk
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The relationship between Mr. Trump and tech industry power brokers was built on money and the promise of deregulation, with Mr. Musk in the middle of it all.
By Mike Isaac and Cecilia Kang
Mike Isaac covers Silicon Valley from the Bay Area. Cecilia Kang covers the tech industry from Washington.
Last year, Elon Musk was the Pied Piper of support for Donald J. Trump among Silicon Valley power brokers.
One by one, tech billionaires close to Mr. Musk who had either backed Democrats or avoided the political scrum put their money and their time behind the former president’s bid to reclaim the White House.
But the meltdown of the relationship between President Trump and Mr. Musk on Thursday has thrown that coziness into question. In the coming days, the billionaires who followed Mr. Musk to Washington may be forced to decide whose side they are on in this suddenly personal fight.
For Silicon Valley, what appeared to be a once-in-a-lifetime opportunity to team up with decision makers in Washington is looking precarious. Mr. Musk was the keystone of the tech industry’s relationship with the Trump administration. Without him, it could be up to lesser-known figures, such as the venture capitalist David Sacks, a close friend of Mr. Musk’s who has become the Trump administration’s A.I. and crypto czar, to maintain those ties.
“This is a tale as old as time,” said Venky Ganesan, a partner at the venture capital firm Menlo Ventures. “Like Icarus, Elon is finding out that if you fly too close to the sun, your wax melts and you crash.”
Even before Mr. Musk revealed that he was leaving Washington, there were growing questions about what exactly the tech industry’s embrace of the Trump White House was accomplishing.
The yearslong attempt by the Justice Department to break up Google? Still on track. The Federal Trade Commission’s pursuit of Meta, Facebook’s parent company? That just wrapped up in a Washington courtroom and is now in the hands of a federal judge. Tariffs on imported goods that could hurt device makers like Apple? Mr. Trump seems more determined than ever to see them through.
“Much better to be aligned with principles than personalities,” Mr. Ganesan added. “A lesson tech titans might want to learn.”
Representatives for the White House and Mr. Sacks did not immediately respond to requests for comment. Mr. Musk did not return an email request seeking comment.
Throughout 2024, many of the tech industry’s boldface names threw their support and hundreds of millions of dollars behind Mr. Trump, mainly because he promised to back away from regulating the cryptocurrency industry and keep the federal government’s hands off artificial intelligence.
The venture capitalist partners Marc Andreessen and Ben Horowitz surprised many when they revealed they were supporting Mr. Trump, though Mr. Horowitz changed his mind when Vice President Kamala Harris, a personal friend, entered the race. (He said, however, that their venture firm still endorsed Mr. Trump.) Many of their colleagues, such as the tech mogul hosts of the popular “All-In Podcast,” which includes Mr. Sacks, also endorsed Mr. Trump.
For them, Mr. Trump has kept up his end of the bargain. Not only has he pushed for the deregulation of crypto markets, his family’s company has jumped headfirst into them. And Mr. Trump’s domestic policy bill that angered Mr. Musk even contains a provision that would block states from regulating A.I.
Other tech industry leaders have not had as much luck. At Mr. Trump’s inauguration, Apple’s Tim Cook, Meta’s Mark Zuckerberg, Amazon’s Jeff Bezos, Google’s Sundar Pichai and Mr. Musk formed a Mount Rushmore of tech bosses in the crowd behind the new president. Sergey Brin, a Google co-founder who once raced to the airport in San Francisco to protest the travel restrictions of Mr. Trump's first administration, was also there. So was OpenAI’s Sam Altman, a fellow travel restriction protester. Jensen Huang, the chief executive of Nvidia and a relative newcomer to presidential circles, did not attend the inauguration but traveled to Mr. Trump’s Mar-a-Lago to talk A.I. chips.
Their results have been mixed. For a while, Mr. Cook appeared to have talked Mr. Trump out of the tariffs on Chinese imports that would have badly hurt Apple. But Mr. Trump changed his mind and created a different set of tariffs that directly targeted Apple. Mr. Huang has been blocked from selling chips to China over national security concerns but was awarded a license to sell hundreds of thousands of chips in the Middle East in data center deals that also brought Mr. Altman’s company to the table.
Commerce Secretary Howard Lutnick told a room of A.I. leaders, lobbyists and lawmakers this week that the administration would invite foreign investment into A.I. data centers, reversing Biden administration restrictions.
He was speaking at an event hosted by Washington AI Network and sponsored by Meta, Amazon, OpenAI, Microsoft and TikTok, where he revealed the administration would rename the U.S. Safety Institute to the Center for AI Standards and Innovation to emphasize growth of the industry over regulation.
“America must lead in A.I., and that means embracing innovation while securing our infrastructure,” Mr. Lutnick said. “The new Center for AI Standards and Innovation will help ensure developers have clear, trusted guidelines — without unnecessary regulation — so we can stay ahead in the global A.I. race.”
But if Mr. Musk’s all-out hostility toward Mr. Trump continues, it is difficult to say how Mr. Trump will treat Mr. Musk’s companies and Silicon Valley. Until this past year, Mr. Trump showed more interest in old industries like steel and cars and was critical of the tech industry’s biggest companies — as well as a few of the smaller ones. Many Trump supporters are still suspicious that Silicon Valley’s peacemaking is just opportunism, and would be happy to see him become more hostile.
Mr. Musk’s rift with Mr. Trump could directly affect efforts in Washington to benefit his companies. At the Federal Communications Commission, SpaceX has intensely lobbied for more access to spectrum for its Starlink satellite wireless service. The F.C.C. chairman, Brendan Carr, has been a vocal supporter of Mr. Musk’s satellite strategy and his business. At a SpaceX release in November, Mr. Carr posted a photo of the release with the words “It’s time to unleash America’s space economy.”
Mr. Musk saw an opportunity after his Starlink satellite service was shut out of the $42.5 billion Broadband Equity Access and Deployment Program created during the Biden administration, which favored fiber internet service over satellite in hard-to-reach rural areas.
Now much of that is up in the air, and Mr. Trump has already threatened to target the many government contracts held by Mr. Musk’s companies.
“This has escalated very quickly, so this rupture absolutely could matter,” said Blair Levin, of New Street Research and a former chief of staff to the F.C.C. Mr. Musk’s satellite ambitions are tied up in policy debates in federal agencies, Mr. Levin said, and “politically it is very easy to tweak things in ways that are very unhelpful to Musk.”
In an upgrade to X on Thursday afternoon, Mr. Musk posted a video of Mr. Trump standing next to a bright red Tesla, parked in front of the White House.
“Remember this? @realDonaldTrump” Mr. Musk wrote.
Mike Isaac is a Tech correspondent for The Times based in San Francisco. He regularly covers Facebook and Silicon Valley.
Cecilia Kang reports on Tech and regulatory policy for The Times from Washington. She has written about Tech for over two decades.
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