Out of DOGE, Elon Musk Returns to His Bruised Business Empire

Hindustan Times

5 days ago

Elon MuskElon Musk is ready to get obsessed with his companies again. He has a lot to contend with.
Tesla is about to launch its first robotaxis, SpaceX is trying to launch a spacecraft to Mars, and xAI is racing to develop human-level artificial intelligence before the competition does it first.
'Back to spending 24/7 at work and sleeping in conference/server/factory rooms,' he posted on X Saturday. 'I must be super focused on X/xAI and Tesla (plus Starship launch next week).'
Musk is known for maniacal focus on whatever is in front of him, and for years has carved up his time to try to advance difficult technologies across his business empire. The companies he is returning to are still wrestling with those kinds of heady challenges, but now must do so with Musk transformed into a deeply polarizing figure.
At SpaceX's Starship launch earlier this week, he appeared locked into mission details, wearing his trusty 'Occupy Mars' shirt during interviews and when he was in a company flight-control facility near Brownsville, Texas. There was no 'Make America Great Again' hat in sight.
On Wednesday evening, Musk said he was stepping down from his work with DOGE (the Department of Government Efficiency), a four-month project to slash government spending that promised as much as $2 trillion in cuts and, in reality, has accomplished a tiny fraction of that. Still, many allies of President Trump have called Musk's work a valiant effort to eliminate waste from federal spending, and other budget hawks are carrying the torch forward.
Combined with the $300 million he spent on Republican races in the latest election cycle, Musk has become one of the most powerful political donors in the U.S. while also introducing new uncertainty into his business empire of five companies, including three where he holds the role of CEO.
At Tesla, damage to the electric vehicle maker is clear, evidenced by a steep downturn in sales in the U.S. and Europe, which analysts say reflects car buyers' distaste for Musk's controversial role in the Trump administration.
In Musk's absence this spring, members of Tesla's board reached out to executive search firms to work on a formal process for CEO succession planning, The Wall Street Journal reported. The current status of the succession planning couldn't be determined. It was also unclear if Musk, who is also a Tesla board member, was aware of the effort or if his pledge to spend more time at Tesla affected succession planning, the Journal reported. After publication, Tesla's chair denied that the board contacted firms to initiate a CEO search and said the board was confident in Musk's ability to execute on an exciting growth plan.
Around the same time, the board put pressure on Musk to spend more time on Tesla and incentivized him with the promise of a new compensation package. Tesla's market capitalization hit $1.5 trillion in the aftermath of Trump's election, before losing more than half its value as Musk got more involved with the government. It has soared back above $1 trillion on news of Musk's return, with investors hopeful that he will make good on his long-promised vision of a robotic future.
Next month, Tesla plans to roll out a new autonomous vehicle ride-hailing service in Austin, Texas. On Thursday, Musk trumpeted road tests of self-driving Model Y cars with nobody in the driver's seat, saying there had been 'no incidents.'
Tesla is counting on autonomy to bring a new wave of growth at the company. While Tesla remains the bestselling electric vehicle maker in the U.S., sales are falling and its market share is shrinking. In April, European sales declined for the fourth month in a row, putting it behind Chinese rival BYD for the first time.
Musk's challenges extend beyond Tesla. SpaceX is racing to develop Starship, a rocket that Musk wants to use to send people to Mars—some day—and that NASA is counting on for missions coming soon. Musk hasn't been shy about how tough meeting his goals will be.
'Starship is a hard, hard, hard, hard project,' he told The Wall Street Journal in a 2021 interview.
The company is trying to prepare Starship for an uncrewed test mission to Mars in 2026, when Earth and the red planet will be closer to each other. It is far from clear if the vehicle will be ready, given the inherent challenges of blasting a spacecraft tens of millions of miles from Earth and following recent setbacks, including back-to-back explosions earlier this year.
The latest Starship launch failed to meet a key objective Musk laid out for it: testing tiles designed to protect the vehicle's spacecraft from intense heat and forces as it returns to Earth. Before the flight, Musk told Tim Dodd of the Everyday Astronaut site that conducting those tests was the most important part of the mission.
The spacecraft made it to space, but SpaceX lost control of it and wasn't able to see how the tiles performed.
The Texas-based company, valued last year at $350 billion, has powerful positions with other business lines, including its fleet of partially reusable Falcon rockets and Starlink, a network of more than 7,500 internet satellites. It has used those technologies to forge close relationships with NASA, the Pentagon and U.S. intelligence agencies. On Friday, the company is scheduled to launch a GPS satellite for the military.
Musk recently merged X, his social-media platform, with his xAI business, as he tries to beat rivals like OpenAI in the race to build what he calls 'digital superintelligence,' or artificial general intelligence. He recently worked behind the scenes—unsuccessfully—to ensure his AI company was included in a major Middle East deal, the Journal reported. Meanwhile, the combined company is trying to extend the reach of its chatbot Grok by forging high-profile partnerships, including one with Microsoft.
Other Musk companies have full slates, though Musk is less involved.
Neuralink, which is run by Shivon Zilis, his friend and co-parent to their four young children, said earlier this month that it would begin a new clinical trial in the Middle East focused on motor and speech impairment.
Competition is heating up in the brain-implant space, where Neuralink is among a small cohort of startups implanting their devices in human patients. As of February, three paralyzed patients have received Neuralink's brain implants, enabling them to interface with computers using only their thoughts.
Musk's tunneling startup, The Boring Company, is run by Steve Davis, a longtime deputy who made his own mark on the federal government by joining the cost cutting at DOGE. The company has been developing a 68-mile tunnel loop in Las Vegas, setting plans one day to move tens of thousands of people around the city every hour. Projects in other cities have yet to come to fruition.
The White House confirmed that Davis also left DOGE this week.
Write to Becky Peterson at [e-mail] and Micah Maidenberg at [e-mail]
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