Elon Musk's newly acquired influence could potentially be utilized to outmaneuver his competitors.
Elon Musk's newly acquired influence could potentially be utilized to outmaneuver his competitors.
Musk had tested the waters against Meta's Zuckerberg in a cage fight challenge, dubbed Bezos a "copycat" in his fights with Amazon, and recently initiated a lawsuit against OpenAI's Sam Altman. Previously, these were merely business and personal disputes between influential and affluent individuals. However, with Musk's newfound influence in the incoming Trump administration and his title as "first buddy," concerns have risen about the potential misuse of government power for his own companies' advantage and harm against his competitors. Possible avenues for abuse could include initiating or terminating government investigations, amending or debilitating regulations, and awarding government contracts favoring Musk's enterprises.
An unnamed expert in law and technology expressed concern, stating, "The federal government has a range of tools at its disposal, and the question lies in whether these tools will be employed under objective criteria, via regulation, laws, and the regular course of government interventions in the economy, or if they will be determined by Musk's personal preferences or impulses, either from Trump or Musk himself." Addressing the possibility that all it takes for the Department of Justice to investigate a rival is a simple request from Musk, the expert highlighted how such an event would bring about a significant amount of hardships.
But Musk's team remained silent in response to CNN's inquiries for comment.
In the realm of business, Bezos and Musk are perpetual rivals in their vying for the title of "richest person in the world." Their competition extends to the space industry, with Musk's SpaceX and Bezos' Blue Origin both participating in the race for federal government contracts. Some contemplate if Musk's alliance with Trump's administration may further emphasize SpaceX's leading status as a federal contractor.
Furthermore, Amazon's Project Kuiper and SpaceX's Starlink infringe on the low-orbit satellite system industry, sharing a similar reliance on regulatory approvals and launch permissions. Amazon plans to launch approximately 3,200 satellites into low Earth orbit, necessitating significant regulatory compliance and launch authorization.
Early SpaceX executive Jim Cantrell, now running Phantom Space Corporation, expressed his belief that Musk and Bezos' rivalry is purely personal. Cantrell suggested that Musk's lobbying efforts for the space industry and his disapproval of regulations deemed to impede progress will positively impact both Musk's businesses and his competitors.
Cantrell explained that while Musk may advocate for measures that could benefit his own firms, the same benefits will also extend to his competitors. He reasoned that a rising tide lifts all boats, with Musk's advocacy for the commercialization of the space industry and the removal of regulations hindering industry growth serving to elevate all competitors, including himself and Musk's companies.
Consequently, Cantrell opined that Blue Origin should be anxious not about Musk's political power being abused against them but rather their own performance, which might not be satisfactory in the competitive field. Blue Origin, which declined to comment, might have an additional reason for worry as Trump appointed Jared Isaacman, an individual with close ties to Musk, as NASA administrator.
On the other hand, Bezos expressed little concern about Musk in Washington, stating, "I consider what has been said, which implies that he won't employ his political power to support his own firms or disadvantage his competitors. However, I might be mistaken in this assumption."
Musk's quarrel with Altman's OpenAI has spanned several years. Musk, a co-founder of OpenAI in 2015, initiated a lawsuit against the company in February, accusing OpenAI of deviating from its original, non-profit mission by reserving its advanced AI technology for exclusive clients. Musk, who advocates for the public dissemination of artificial intelligence systems, had made the chatbot Grok's code available through his xAI company.
Musk's lawsuit sought a jury trial and a demand for OpenAI, Altman, and co-founder and President Greg Brockman to return any income derived from this venture. OpenAI rejected Musk's allegations as "incoherent" and "frivolous" and dropped the suit after OpenAI published Musk's emails from the company's inception.
Musk resurrected the legal struggle in August, filing a new lawsuit against OpenAI and Altman, with the same contention that OpenAI undermined its mission by partnering with Microsoft and commercializing products.
OpenAI, despite being conceived as a non-profit research lab with a for-profit arm, has contemplated transforming into a traditional, profit-making entity that might generate greater returns for investors. This potential transformation, which Musk has also targeted, led him to request a temporary block on OpenAI's ability to transition towards such a restructuring.
Regardless of the lawsuit's ultimate resolution, Musk could potentially misuse his relationship with Trump and cavorting with David Sacks, who has been appointed as White House "czar" responsible for overseeing artificial intelligence and cryptocurrency policies, to disadvantage OpenAI and Microsoft. Musk and Sacks had collaborated in starting PayPal.
For instance, Musk might endeavor to persuade the government to work with and extend lucrative contracts to "open source" AI companies, such as his own, at the expense of OpenAI and Microsoft. Gil Luria, the head of technology research at investment group D.A. Davidson, underscored this possibility.
Such an action could potentially benefit Meta as well, seeing that they've freely shared their Llama model, and their CEO, Zuckerberg, has been attempting to mend his relationship with Trump, expressing his intent to partake in discussions regarding tech policy with the incoming president-elect.
As Luria stated, the government has the power to favor certain businesses and technologies, although he believes it's highly unlikely that Musk would use his political influence to harm his competitors.
Musk might try to persuade Congress or the Internal Revenue Service to obstruct OpenAI's transformation from a non-profit organization into a for-profit entity.
However, Altman expressed confidence on Wednesday that Musk's political endeavors won't impact his company negatively. He remarked, "I believe firmly ... that Elon will act honorably, and it would be deeply un-American to employ political power, to the extent that Elon possesses, to harm competitors and benefit his own ventures. Such actions would not be tolerated, and I don't believe Elon could engage in such tactics. They would starkly contradict the values that I believe he cherishes."
In response to an X post discussing Altman's comment, as well as a corresponding remark by Bezos, Musk stated, "They are correct."
Mark Zuckerberg
A botched SpaceX launch unfortunately resulted in the destruction of a Facebook AMOS-6 Satellite, which aimed to broadcast the internet to millions living in remote areas worldwide.
The cause of the long-standing feud between Musk and Zuckerberg remains unclear, but at one point, they were seriously considering engaging in physical combat.
The rumors of a confrontation eventually subsided around August. Although Zuckerberg has been making strides in his relationship with Trump—meeting with him at Mar-a-Lago and openly expressing his intention to contribute to the Trump administration's technology policies—one of his close associates displayed some reservations towards Musk.
On a BBC podcast, Meta's global affairs head, Nick Clegg, expressed skepticism about Musk, stating that he has grown to exert an outsized influence in both the election process and the formation of the new US administration.
"He has the choice—he can become an avid and powerful supporter," Clegg said. "Or, he can attempt to wield political power, surpassing Trump, to select future Republican candidates, and so on."
Meta is currently grappling with an antitrust trial, and the company may also face increased scrutiny from the Federal Communications Commission.
Donald Trump's pick for FCC chairman, Brendan Carr, has expressed warm sentiments towards Musk and often engages with him on X, and has spoken out against social media companies, accusing them of engaging in "improper conduct."
"We can impose transparency requirements on social media companies through existing FCC laws," Carr said last week. "If social media firms are colluding to not compete on speech regulations, that is basically no different than an agreement not to compete on pricing or any other competitive metric. That should be addressed."
Tesla competitors
Tesla stocks soared following Trump's election and continue to gain traction. Despite Tesla's dominance in the electric vehicle market, they could potentially benefit even further with Musk's direct connection to the government.
Government investigations into Tesla's autonomous driving technology could potentially cease, as suggested by Missy Cummings, a former senior safety advisor at the National Highway Traffic Safety Administration.
Furthermore, Musk could lobby for the disadvantage of Tesla's competitors.
Last week, Vivek Ramaswamy, Musk's co-chair of the Department of Government Efficiency advisory group, sharply criticized a $6.6 billion Department of Energy conditional loan commitment to Rivian, the electric vehicle start-up. The loan would help fund a new manufacturing plant in Georgia. In 2010, Tesla received a similar $465 million loan from the Energy Department, which played a significant role in its survival and success.
Ramaswamy said that such loans, among others like it, are "high on the list of items" that DOGE will consider reversing.
Musk and Ramaswamy's DOGE initiative is set to expire in 2026, but some question whether Musk's relationship with Trump will sour sooner than that.
But for now, Musk suggested that he can be most effectively lobbied on X, his social media platform.
"I will do my best to respond to thoughtful arguments here on X in the best interests of the American people," Musk wrote on X last week. "However, any real or implied offers of money, power, or threats will obviously be illogical and ineffective."
In the business realm, Musk's alliance with the Trump administration and his title as "first buddy" have raised concerns about potential misuse of government power for his own companies' advantage and harm against competitors. Such misuse could include initiating or terminating government investigations, amending or debilitating regulations, and awarding government contracts favoring Musk's enterprises.
Musk's quarrel with Altman's OpenAI has spanned several years, with Musk accusing OpenAI of deviating from its original, non-profit mission by reserving its advanced AI technology for exclusive clients. Musk, who advocates for the public dissemination of artificial intelligence systems, has initiated a lawsuit against OpenAI, seeking a jury trial and a demand for returned income derived from this venture.