Elon Musk poised for influential role in Trump administration

Donald Trump is returning to the White House. The Republican candidate for U.S. President emerged victorious in the presidential election, CNN reported late in the morning Eastern Time. Official results are not yet available, but estimates suggest that he surpassed the required threshold of 270 electoral votes, clearly defeating Kamala Harris.

Throughout the campaign, Trump received strong support from Elon Musk, the billionaire founder of Tesla and SpaceX and owner of X (formerly Twitter). Trump's victory likely signifies that one of the world's richest people will join the U.S. President's administration. Trump promised twice to offer Musk a government or advisory position if elected. "He's a very smart guy," Trump remarked about Musk.

During the campaign, there was speculation that Musk might seek budget savings for the U.S. At one of the last rallies before the election, the billionaire expressed his "prayer for Trump's victory so he could start working at a high level in his administration and curb federal spending". "We have to reduce spending to live within our means," Musk declared at the end of October. "This involves temporary difficulties, but in the long run, it will ensure prosperity," he argued.

On Wednesday morning, Donald Trump once again praised Musk, saying, "We must protect our super geniuses." Throughout the night, Musk actively commented on the election results. In one of his initial posts, he wrote, "game, set, match," indicating his prediction of Trump's victory. In another post, he shared a photo from a ceremonial dinner with Trump and stated that the future would be phenomenal.

According to Krystian Łukasik, a senior analyst in the digital economy team at the Polish Economic Institute, Musk's possible entry into Trump's administration could lead to a relaxation of regulations covering part of the tech sector. "Benefits may be felt especially by businesses operating in industries similar to Elon Musk's companies. The billionaire's lobbying will likely focus on easing oversight of companies like Tesla and SpaceX, particularly concerning environmental and safety issues. More favorable operational conditions for Musk's projects do not necessarily translate to benefits for the entire big tech sector. Donald Trump has a history of conflicts with tech giants, so companies previously unfavorably disposed toward Trump may face greater tensions," evaluates Krystian Łukasik.

Will Musk's businesses experience better times now? Under Biden's administration, his companies faced numerous investigations by the Department of Justice, the Securities and Exchange Commission (SEC), and the National Highway Traffic Safety Administration (NHTSA).

- This prompted Musk to seek political allies who, in exchange for financial support for the election campaign, would promise a softer approach to tech company regulations. Elon Musk's alliance with Donald Trump will likely bring more lenient regulations regarding the introduction of autonomous vehicles on the streets, greater favorability in labor and environmental protection regulations, lower tax rates, and better chances of obtaining government contracts for SpaceX - predicts the PIE analyst.

Dr. Michał Kuź from the Jagiellonian Club and Łazarski University also believes that Musk will benefit from Trump's victory. "Trump is wealthy, but he is not a genuine member of the super-elite like Elon Musk or Jeff Bezos. Musk has demonstrated cleverness and political savvy; few from the highest echelons of business supported Trump. Remember, Musk is not just X and Tesla; he's a significant federal government contractor. Being around Trump will be associated with benefits, even conflicts of interest," says Dr. Kuź.

The expert also highlights the increasingly significant phenomenon of "tech-right" in American politics, of which Musk is an exemplary figure. "Currently, it's a minority group associated with high technology, but now their numbers will grow. These are individuals who fear that the combination of 'environmentalism' and progressive censorship threatens technological development, viewing it as a barrier to progress," Dr. Michał Kuź explains.

In his opinion, while there may not be a revolution in American big tech, there will certainly be a relaxation of regulatory constraints for companies working on government contracts. As for Musk, it’s possible he won’t remain in the administration for long, as Trump is known for frequently changing his associates, assesses Dr. Kuź.

Dr. Przemysław Kwiecień, an XTB analyst, predicts that Musk will serve in an advisory capacity in the administration, but will not be fully involved as he manages several large businesses.

I assume he will consult with Trump on selected solutions. His role will be very interesting - says the XTB analyst to money.pl.

The election result influenced a notable surge in Tesla's shares on Wednesday.

The expert notes that it’s difficult to predict potential government contracts for Musk's companies. "The administration will aim to create the perception that Musk is on the side. At the very least, that he doesn’t blatantly obtain contracts. However, it is hard to say more at this moment," Dr. Kwiecień comments.

In his view, there will not be a revolution in the authorities' approach to big techs, but some may become wary. "The first focus may be on Google." Trump accused it of discriminating against him in searches. The company might face more pressure, but formally, the change in the White House shouldn't translate into more cases, the XTB analyst evaluates. He believes the situation might vary for other big techs.

He mentions, for example, the recent stance of Jeff Bezos, who also owns "The Washington Post." "He didn't endorse Kamala Harris as the preferred presidential candidate, which was significant," he adds.

In a morning commentary on the XTB Poland channel, the expert emphasized that Musk was at some point the "number one figure, spin doctor of Donald Trump in the campaign". "It is known that he supports cryptocurrencies, and Trump was appealing to young voters. Musk's presence and authenticity in his views are regarded positively," Kwiecień said.

Born in 1971 in Pretoria, Elon Musk had reasons to be euphoric on Wednesday. Trump's victory resulted in Tesla shares jumping 15%. It was estimated that in just one night, Musk's wealth increased by $12 billion. At the end of December 2023, Bloomberg valued his fortune at $232 billion.