Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
America’s largest companies are cutting deals with Elon Musk’s businesses or touting links with the world’s richest man as he solidifies his power within Donald Trump’s administration and begins to radically restructure the US government.
A rush of announcements in recent days included Visa finalising a payments processing deal with Musk’s social media site X and United Airlines accelerating a plan to use Musk’s Starlink satellites for in-flight WiFi.
Amazon has also boosted advertising spending on X, which it had previously shunned due to a proliferation of hate speech on the platform. It was one of the top 10 advertisers on the platform in the US in January after spending more than 10 times as much that month compared with December, according to data from market intelligence group SensorTower.
On Monday, Apple updated its iPhone operating system, allowing T-Mobile users in the US to connect to Musk’s Starlink satellites.
Boeing’s chief executive Kelly Ortberg said he had been working with Musk — a competitor in the space and defence sectors — to accelerate delivery of two Air Force One planes that are over budget and years late.
Oracle, the enterprise software company run by Trump supporter Larry Ellison, also announced a Starlink collaboration, while Intel touted a “growing media partnership” with X before broadcasting a live event together with Microsoft on the platform.
Separately this week, roughly $3bn of debt tied to Musk’s purchase of X, held by banks including Morgan Stanley for more than two years, began to move, with investors including Apollo interested in a tranche.
The debt has become more attractive in part thanks to the $50bn valuation of xAI, in which X owns a 25 per cent stake.
Other businesses have already mended relations with Musk.
Following Trump’s win in November, JPMorgan dropped a three-year lawsuit against Tesla, in which it was seeking $162mn over alleged breaches of a stock warrants contract. The lender denied the timing was anything other than coincidental.
Jamie Dimon, JPMorgan’s chief executive, told CNBC last week that he and Musk had “hugged it out” after a years-long feud. He went on to compare Musk with Albert Einstein and said America’s biggest bank by assets would “like to be helpful to him and his companies as much as we can”.
Such overtures have coincided with Musk demonstrating his influence over Trump, whose campaign he backed with a quarter of a billion dollars.
Since the election, Musk has been a near-constant presence at the president’s side and been involved in everything from cabinet appointments to AI, defence and economic policy discussions.
This week, Musk, who has been tasked by Trump with leading the cost-cutting Department of Government Efficiency, began to exhibit the extent of his power with the new administration, overseeing a drive to dismiss up to 2mn career civil servants and overhaul the administrative state.
Some of the deals between corporations and Musk’s businesses were in train for months. But “there is likely political benefit to a firm accelerating those relationships given Musk’s position in the new administration” said Jonathan Bundy, a management professor at Arizona State University. “Musk has kind of made himself synonymous with his organisations.”
Pulling out of agreements with Musk’s businesses or delaying them could also prompt retribution from the billionaire, a Washington lobbyist who represents several multinationals said, citing Musk’s criticism of OpenAI over what he claimed was a breach of its promise to remain a non-profit.
Apple, Visa and Oracle declined to comment on the timing of their Musk-related announcements. Morgan Stanley declined to comment on the debt sale, while Amazon declined to comment on its ad spending on X.
Intel said its media programmes were “the result of many months of planning and collaboration . . . and this was no different”.
United Airlines and Boeing pointed to recent remarks by their chief executives. United’s Scott Kirby told investors last week that it was installing Starlink ahead of schedule because the airline thought fast WiFi would offer “a material advantage” over competitors.
Boeing’s Ortberg told CNBC on Tuesday that Musk’s team at the advisory department “sincerely are looking at things that are in the contract or in the process that are slowing us down or aren’t providing us value”.
Richard Aboulafia, managing director at AeroDynamic Advisory, said Musk might be able to improve industrial processes at Boeing, but raised questions about his involvement in the Air Force One project.
“Oligarchy is bad enough,” he said. “But oligarchy with a competitor doing the enforcement is double, triple as bad.”
Additional reporting by Stephen Gandel and Eric Platt in New York and Michael Acton in San Francisco
Read the full article here
