Elon Musk Vs Donald Trump: Can Tesla, Spacex And Xai Survive The Bitter Feud?

The once-strategic rapport between Elon Musk and Donald Trump has unraveled into a bitter political feud, sending shockwaves across Musk's business empire and putting billions in government contracts and market value on the line.

Tesla's Political Tailspin 

Tesla, the electric vehicle giant and pillar of Elon Musk's commercial success, has been particularly hard hit by the fallout. Investor confidence has been shaken, with Tesla's stock falling more than 20% since January. The latest blow came after Musk's clash with Trump went public, erasing over $150 billion from Tesla's market value in mere hours and knocking $34 billion off Musk's net worth.

Once viewed as the darling of eco-conscious liberals, Tesla is now struggling with image damage due to Musk's right-wing political alignment. Disenchanted customers have begun signaling their discomfort - some even placing bumper stickers on their EVs that read, "Bought before Elon went crazy."

Tesla's ambitions to lead the autonomous vehicle revolution are also in jeopardy. Regulatory support from a Trump administration had once been key to Musk's plan to deploy robotaxis, beginning with a pilot program in Austin. But with Trump now turning adversarial, analysts say those regulatory pathways could be blocked.

Dan Ives of Wedbush Securities summed it up:“Musk needs Trump because of the regulatory environment, and you can't have Trump go from friend to foe.”

Meanwhile, the company's sales are beginning to reflect the crisis. In Europe, Tesla's market share plummeted by 50% in April, despite the overall growth in EV sales.

A Morgan Stanley survey found that 85% of investors now believe Musk's political activities are actively damaging Tesla's prospects.

SpaceX at the Crosshairs of Washington Turmoil 

The implications of this political feud extend far beyond cars - and into outer space.

SpaceX, Musk's rocket and satellite venture, is deeply entwined with US federal agencies, most notably NASA and the Pentagon. It handles missions ranging from ferrying astronauts to the International Space Station to launching sensitive spy satellites and running the Starlink network.

Trump's threat to cancel all government contracts with Musk on Thursday sent shockwaves through the industry. In response, Musk briefly threatened to halt operations of the Dragon spacecraft, which NASA relies on to transport astronauts - though he later walked back the remark.

With SpaceX's December valuation topping $350 billion, bolstered by expectations of continued government support, the political rupture could have massive repercussions for the company's future - and for America's space ambitions.

xAI vs OpenAI: The White House Power Play 

Musk's battle with Trump also casts a shadow over his artificial intelligence company, xAI, which he envisions as a direct competitor to OpenAI - the very firm he co-founded a decade ago.

While OpenAI CEO Sam Altman has secured major deals with the U.S. government, including the high-profile Stargate AI infrastructure project, Musk has been scrambling to catch up. Initially dismissive of Stargate, Musk later sought to undermine it, reportedly telling investors that Trump would block any expansion that didn't include xAI.

This maneuvering has become more complex following Musk's decision to fold social media platform X (formerly Twitter) into xAI. While X has become a hub for right-leaning users, Trump himself remains aloof, sticking primarily to his own platform, Truth Social.

From Allies to Adversaries: What's at Stake for Musk 

What began as a seemingly beneficial alignment between a tech billionaire and a political heavyweight has now devolved into a high-stakes clash with implications spanning industries and national interests.

Whether in the boardroom, the launch pad, or the policy corridors of Washington, Musk's ventures are now navigating uncharted territory - with a former ally turned adversary, and with the future of Tesla, SpaceX, and xAI hanging in the balance.

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