If Elon Musk and President Donald Trump divorce, who gets Silicon Valley?
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Last year, Elon Musk was the Pied Piper of support for Donald Trump among Silicon Valley power brokers.One by one, tech billionaires close to 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 Trump and Musk on Thursday has thrown that cosiness into question. In the coming days, the billionaires who followed 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. 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 venture capitalist David Sacks , a close friend of Musk who has become the Trump administration's artificial intelligence and crypto czar, to maintain those ties."This is a tale as old as time," said Venky Ganesan, a partner at 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 Musk announced 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? Trump seems more determined than ever to see them through."Much better to be aligned with principles than personalities," Ganesan added. "A lesson tech titans might want to learn."Representatives for the White House and Sacks did not immediately respond to requests for comment. 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 Trump, mainly because he promised to back away from regulating the cryptocurrency industry and keep the federal government's hands off artificial intelligence.Venture capitalist partners Marc Andreessen and Ben Horowitz surprised many when they announced they were supporting Trump, though Horowitz changed his mind when former Vice President Kamala Harris, a personal friend, entered the race. (He said, however, that their venture firm still endorsed Trump.) Many of their colleagues, such as the tech mogul hosts of the popular All-In Podcast, which includes Sacks, also endorsed Trump.For them, Trump has kept up his end of the bargain. He has not only pushed for the deregulation of crypto markets, his family's company has jumped headfirst into them. And Trump's domestic policy bill that angered Musk even contains a provision that would block states from regulating AI.Other tech industry leaders have not had as much luck. At Trump's inauguration, Apple's Tim Cook, Meta's Mark Zuckerberg, Amazon's Jeff Bezos, Google's Sundar Pichai and 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 Trump's first administration, was also there. So was OpenAI's Sam Altman, a fellow travel restriction protester. Jensen Huang, CEO Nvidia and relative newcomer to presidential circles, did not attend the inauguration but traveled to Trump's Mar-a-Lago resort in Florida to talk AI chips.Their results have been mixed. For a while, Cook appeared to have talked Trump out of the tariffs on Chinese imports that would have badly hurt Apple. But Trump changed his mind and created a different set of tariffs that directly targeted Apple. 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 centre deals that also brought Altman's company to the table.Commerce Secretary Howard Lutnick told a room of AI leaders, lobbyists and lawmakers this week that the administration would invite foreign investment into AI data centres, 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 announced the administration would rename the U.S. Safety Institute to the centre for AI Standards and Innovation to emphasize growth of the industry over regulation."America must lead in AI, and that means embracing innovation while securing our infrastructure," Lutnick said. "The new centre for AI Standards and Innovation will help ensure developers have clear, trusted guidelines -- without unnecessary regulation -- so we can stay ahead in the global AI race."But if Musk's all-out hostility toward Trump continues, it is difficult to say how Trump will treat Musk's companies and Silicon Valley. Until this past year, 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.Musk's rift with 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. FCC Chair Brendan Carr has been a vocal supporter of Musk's satellite strategy and his business. At a SpaceX launch in November, Carr posted a photo of the launch with the words, "It's time to unleash America's space economy."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 Trump has threatened to target the many government contracts held by 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 FCC. Musk's satellite ambitions are tied up in policy debates in federal agencies, Levin said, and "politically it is very easy to tweak things in ways that are very unhelpful to Musk."In an update on the social platform X on Thursday afternoon, Musk posted a video of Trump standing next to a bright red Tesla, parked in front of the White House."Remember this? @realDonaldTrump" Musk wrote.
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