The public quarrel between Elon Musk and President Donald Trump exposed how deeply Musk’s companies are dependent on the US government – a CEO of reality Ark Invest Cathie Wood says that investors can no longer ignore.
In a video published on Friday on the Ark Invest YouTube channel, Wood said that growing tensions quickly showing the market to what extent Washington is the influence of the Musk Empire, from aerospace to electric vehicles and medical technology.
“Elon, Tesla and investors are starting to understand more and more how the government controls here,” she said.
Register For TEKEDIA Mini-MBA Edition 17 (June 9 – September 6, 2025)) Today for early reductions. An annual for access to Blurara.com.
Tekedia Ai in Masterclass Business open registration.
Join Tekedia Capital Syndicate and co-INivest in large world startups.
Register become a better CEO or director with CEO program and director of Tekedia.
The quarrel: from political criticism to personal fallout
The spit, now outdoors, started earlier last week after Musk criticized Trump’s last legislative proposal – nicknamed “One Big Beautiful Bill” – as a “disgusting abomination” on his platform, X (formerly Twitter). Musk accused the package of being fiscally irresponsible, warning that it would extend the national deficit at a time of assembly of the American debt.
The comment struck a nerve. The bill, which brings together tax cuts and infrastructure provisions as well as incentives for the development of oil and gas, had become a major political board for the economic plan of Trump.
Thursday, the benefits had become personal. Trump responded by publicly threatening to cut Musk’s federal contracts, telling the advisers he had “finished with Elon” and alluding to Tesla’s tax benefits and federal spacex contracts.
Musk retaliated a few hours later. In an article that amazed Washington’s investors and initiates, he announced that SpaceX would begin the “immediate downgrading” of his dragon spaceship – the same capsule that had just returned NASA Suni Williams and Butch Wilmore astronauts from the international space station. The threat alarmed defense officials and leaders of the space industry, because Dragon plays an essential role in the logistics of civil and defense space. Musk then retracted the declaration, signaling what Ark Invest wood called an attempt to “bring it back”.
Billions in play
The quarrel has important financial implications. SpaceX has at least $ 22 billion in federal contracts, according to COO Gwynne Shotwell, ranging from NASA missions to satellite work for the US Department of Defense. Tesla has also prospered in part thanks to the support of the government, benefiting from electric vehicle tax credits, battery grants and other green energy programs.
Even Neuralink, the controversial controversial company of the brain interface, must operate under the regulatory authority of the Food and Drug Administration. Tesla’s Robotaxi project also depends on the approval of Washington regulators, a fact that could delay or derail the deployment if relations continue to derive.
Wood said market reaction – with Tesla actions more than 14% on Thursday – was not a question of volatility.
“It’s a time of calculation for investors,” she said. “When you build companies that change in the world, you also find yourself under the most powerful government microscope in the world.”
Musk and Trump: allies to adversaries
Musk and Trump were formerly close, Musk serving for advisory advice from the White House during Trump’s first term. They shared common ground on issues such as deregulation, spatial exploration and skepticism towards the inherited media.
But relations were cooled after Musk criticized Trump’s decision to withdraw the United States from the Paris climate agreement in 2017. The final break came in 2022, when Trump made fun of Musk during a rally, calling him “another bull artist” and urging Tesla CEO to “stay out of politics”. Since then, their relationship has passed between a difficult alliance and outright hostility.
This week’s events seem to have pushed it to the complete collapse.
“I have no intention of talking to him,” Trump told NBC News on Saturday. “It was very disrespectful. You cannot disrespect the president’s office.”
However, some members of the Trump circle hold hope for reconciliation. Vice-president JD Vance, speaking Thursday during an appearance on the Podcast Theo von, said that he thought that Musk’s public critic was “a huge error”, but added: “I hope he understands it and returns to the fold.”
Try to rename – or disengage?
Cathie Wood has hypothesized that Musk could try to distance himself from partisan policy and the perception that his companies are aligned too closely with a single administration.
“One of the hypotheses is that what happened was partly – not entirely – orchestrated,” she said. “There have been damage to the brand in Tesla, which it admits easily. I think he is trying to disengage from the government and to be associated with one party or the other. ”
Musk himself referred to a change of management in April, announcing that he would withdraw from the government-related partnerships to focus more on commercial companies and the development of AI.
But as Wood pointed out, it can be too late for a clean break. “When you build a business model that evolves with public money and public infrastructure, you cannot choose your regulators,” she said.
Despite the troubles, Wood thinks Musk will adapt. “It works very well under pressure,” she said. “He creates a lot of this chaos and pressed himself.”
However, the wider message to Silicon Valley is that, although innovation can question governments, it is often based on them – and crossing an in -office president can obtain high costs.
