How Elon Musk could use his new influence to nail his rivals

CNN

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Elon Musk has long been known for his competitive spirit, and for his list of rivals.

He challenged Meta's Mark Zuckerberg to a cage fight. He called Amazon and Blue Origin boss Jeff Bezos a "copycat." And just recently, he sued OpenAI's Sam Altman.

Until now, these were business and personal rivalries between some of the richest and most successful people in the world. But with Musk's new influence in the incoming Trump administration and position as "first buddy," some fear he could use the power of the government to benefit his own companies and harm his rivals. That could come in the form of starting or dropping government investigations, creating or weakening regulations, and awarding government contracts to the benefit of Musk's companies.

"The federal government has a set of tools in its toolbox, and the question is, will the use of those tools be governed by objective standards, through regulation and laws and the normal process of government intervention in the economy, or will it be subject to the material impulses of either the president or Elon Musk?" said one expert in law and technology who asked to speak anonymously to avoid Musk's ire. "If all it takes is for (Musk) to say, ‘Hey, DOJ should investigate them,' that will cause a lot of headaches."

Representatives for Musk did not respond to CNN's requests for comment.

Jeff Bezos

Bezos and Musk often compete against each other in the "richest person in the world" rankings, but they have also been rivals when it comes to the space industry.

Both Musk's SpaceX and Bezos' Blue Origins compete for federal government contracts, and now with Musk firmly tied to Donald Trump's administration, some wonder whether he will use his influence to further entrench SpaceX's already dominant position as a government contractor.

And it's not just government contracts with NASA for splashy rockets and trips to the International Space Station. Amazon's Project Kuiper also competes with SpaceX's Starlink in the low-orbit satellite system industry.

These systems require a fair amount of regulatory and launch approvals, and Amazon is working toward launching some 3,200 satellites into low Earth orbit.

Jim Cantrell, an early SpaceX executive who now runs Phantom Space Corporation, said he believes the rivalry between Musk and Bezos is "much more personal than anything anybody ought to be worried about."

Instead, Cantrell said he thinks that while Musk will advocate for changes that could benefit his own companies, it will also benefit his competitors.

"A rising tide lifts all boats," Cantrell said, adding that Musk's advocacy for commercialization of the space industry and fighting regulations that he believes slow down the industry are "going to raise the tide for all his competitors, including himself."

Cantrell said that some of these actions would end up helping the best competitor in the field, which just happens to be Musk's companies.

"I think Blue Origin should be terrified about their own performance," Cantrell said, not terrified of Musk's power in the Trump administration being used against them.

Blue Origin's New Shepard crew (L-R) Jeff Bezos, Wally Funk, Oliver Daemen, and Mark Bezos walk near the booster to pose for a picture after flying into space in the Blue Origin New Shepard rocket on July 20, 2021 in Van Horn, Texas.

Joe Raedle/Getty Images

Blue Origin, which did not respond to a request for comment, may have another reason to be worried. Trump just named Jared Isaacman, who has close ties with Musk, as his pick for NASA administrator.

For his part, Bezos said Wednesday at a New York Times DealBook event that he is not worried about Musk in Washington.

"I take it at face value, what has been said, which is that he's not going to use his political power to advantage his own companies or to disadvantage his competitors," Bezos said. Though, he added, "I could be wrong about that, but I think it could be true."

Sam Altman

Musk's feud with Altman's OpenAI has been long-running.

Musk, who helped to co-found OpenAI in 2015, first sued the company in February, accusing the ChatGPT maker of abandoning its original, non-profit mission by reserving some of its most advanced AI technology for private customers. Musk has advocated for "open source" artificial intelligence systems and has publicly released the code behind the chatbot Grok made by his own company, xAI.

Musk's original lawsuit sought a jury trial and for OpenAI, Altman and co-founder and President Greg Brockman to pay back any profit they received from the business.

OpenAI called Musk's claims "incoherent" and "frivolous." And Musk dropped the suit after OpenAI published several of Musk's emails from OpenAI's early days. The emails appeared to show Musk acknowledging the need for the company to make large sums of money to fund the computing resources needed to power its AI ambitions, which stood in contrast to the claims in his lawsuit that OpenAI was wrongly pursuing profit.

However, Musk reopened the legal battle in August, filing a new lawsuit against OpenAI and Altman with, essentially, the same claim that the start-up is undermining its non-profit mission by partnering with Microsoft and commercializing some products.

OpenAI was created as a non-profit research lab with a for-profit arm, but has mulled restructuring into a more traditional, for-profit company that could lead to more returns for investors, a plan at which Musk has also taken aim. A recent filing in his lawsuit asked a court to temporarily block OpenAI's ability to make such a transition.

Regardless of how that case ultimately plays out, Musk could potentially use his connection to Trump, as well as his friendship with David Sacks, whom Trump has tapped as White House "czar" overseeing artificial intelligence and cryptocurrency policy, to disadvantage OpenAI. Sacks and Musk were both involved in starting PayPal.

Musk could, for example, push for the government to work with and grant lucrative contracts to "open source" AI companies like his own over rivals such as OpenAI and Microsoft, said Gil Luria, head of technology research at investment group D.A. Davidson.

Such a move could also benefit Meta, which has open-sourced its Llama model and whose CEO, Zuckerberg, has been seeking to improve his relationship with Trump and said he wants an "active role" in tech policy discussions with the president-elect.

"The government can decide to advantage certain companies, certain technologies and that would be within the realm of possibility," Luria said, although he added that he ultimately believes it's unlikely Musk will use his political influence to harm rivals.

Musk could also push Congress or the Internal Revenue Service to interfere with OpenAI's ability to transition from a non-profit to a for-profit corporation.

However, Altman said Wednesday that he's not worried about Musk's political activities harming his company.

"I believe pretty strongly … that Elon will do the right thing and it would be profoundly unamerican to use political power, to the degree that Elon has it, to hurt your competitors and advantage your own businesses," Altman said. "I don't think people would tolerate that, I don't think he could do that. It would go so deeply against the values that I believe he holds."

In response to an X post about Altman's comment, as well as a similar comment by Bezos, Musk said: "They are right."

Mark Zuckerberg

Mark Zuckerberg, chief executive officer of Meta, makes a point during an appearance at SIGGRAPH 2024, the premier conference on computer graphics and interactive techniques, Monday, July 29, 2024, in the Colorado Convention Center in downtown Denver.

David Zalubowski/AP

A failed SpaceX launch once destroyed a Facebook AMOS-6 Satellite, which the company was hoping to use to beam the internet to millions of people in remote parts of the world.

It's not clear whether that's what helped spark the long-running feud between Musk and Zuckerberg, which devolved at one point into regular insults and digs lobbed over social media. But at one point Musk and Zuckerberg were seriously discussing an actual fight.

Talk of a fight died down around August. And while Zuckerberg has been making inroads with Trump, meeting him at Mar-a-Lago recently and speaking openly about wanting to play an "active role" in helping the Trump administration shape tech policy, one of his top lieutenants expressed a bit more skepticism about Musk.

Speaking on a BBC podcast, Meta's head of global affairs, Nick Clegg, said Musk is "now playing an outsized role in both the election and now the formation of the new US administration."

"He has a choice, he can be either an avid and well-heeled supporter," Clegg said. "Or he can try and become a sort of political puppet master, going well beyond Trump, deciding who the next Republican candidate should be and the one after that, and so on, so forth."

Meta is already facing an antitrust trial, and the company could also face increased pressure from the Federal Communications Commission.

Brendan Carr, Trump's pick for FCC chair, has exchanged warm words with Musk and often engages with him on X, has been open about his desire of "smashing the censorship cartel" of social media, and has directly told Zuckerberg, as well as other big tech CEOs, that they've been engaging in "improper conduct."

"We can impose transparency obligations through existing FCC laws," Carr told Fox Business last week. "If social media companies are colluding to not compete on speech regulations, that's really no different than an agreement not to compete on pricing or another competition metric and that should be looked at."

Tesla competitors

Tesla stock surged after Trump's win and is still riding high. While Tesla is already dominant in the electric vehicle market, it could see even greater benefits with Musk's direct line into the government.

For one, government investigations into the safety of Tesla's autonomous driving technology could just disappear, said Missy Cummings, a former senior safety adviser at the National Highway Traffic Safety Administration.

Then there's support for Tesla 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 startup. The loan would help finance a new manufacturing plant in Georgia. Back in 2010, Tesla received a similar $465 million loan from the Energy Department that proved pivotal to its survival and success.

But Ramaswamy said that loan and others like it are "high on the list of items" that DOGE will look to reverse.

Musk and Ramaswamy's DOGE effort has an expiration date in 2026, but some who know Musk wonder if his relationship with Trump will sour sooner than that.

But until then, Musk said the best way for him to be lobbied is on X, his social media platform.

"I will do my best to respond to well-reasoned arguments here on X for serving the best interests of the American people," Musk wrote on X last week. "However, any real or de facto offers of money, power or threats will obviously be silly and ineffective."