June 9, 2025
A fierce public clash between former President Donald Trump and tech mogul Elon Musk is stirring concern among investors and raising questions about the stability of government-backed innovation initiatives.
Musk’s open criticism of Trump’s “One Big Beautiful Bill”—a sweeping tax-and-spending package—prompted Trump to retaliate, threatening to cancel billions of dollars-worth of federal contracts held by Musk’s companies, including SpaceX, Starlink, Tesla, and Neuralink. Trump warned that supporting Democratic candidates in the upcoming midterms could carry “serious consequences,” signaling a willingness to weaponize government ties for political retribution.
The feud triggered immediate financial fallout: Tesla shares plunged 14%, wiping out over $150 billion in market value, and briefly regained some ground afterward. While analysts argue the decline is temporary, they warned that prolonged subsidy or contract threats could hamper Tesla’s ambitious projects—especially its robotaxi rollout—and undermine investor sentiment.
The stakes go well beyond consumer vehicles. SpaceX, the only domestic provider for ISS crew transport, stands to lose an estimated $34 billion in federal contracts, with Starlink and Tesla also tied to NASA and defense projects totaling as much as $48 billion. Cancellation of these contracts could disrupt space missions, national security communications, and advanced AI initiatives.
Industry leaders such as Cathie Wood of Ark Invest argue the clash epitomizes the precarious reliance of private tech firms on federal support. Musk’s attempt to distance his companies from politics backfired, exposing their vulnerability—and he briefly threatened to decommission SpaceX’s Dragon capsule in response.
Yet, some analysts believe the long-term disruption will be limited, pointing out that autonomous systems, renewable tech, and other Musk-led divisions enjoy broad market backing, separate from government dynamics.
Beyond Musk’s businesses, the spat injects fresh uncertainty into markets already rattled by trade policies and fiscal volatility. Musk cautioned that Trump’s tariff proposals could trigger a recession by late 2025. Meanwhile, the escalating political fight may erode trust in the predictability of U.S. innovation strategies.
As Musk teases a potential “America Party” and Trump vows no reconciliation, the outcome remains unclear. What is certain: the clash between the world’s richest man and a former U.S. president is now shaping investor confidence, shaping technological momentum, and influencing the broader economic trajectory of the United States.
Business Insider. (2025, June 8). Elon Musk’s fight with Trump likely won’t blow up Tesla’s robotaxi push, analysts say. Business Insider. Retrieved from https://www.businessinsider.com/elon-musk-donald-trump-feud-impact-tesla-robotaxi-launch-2025-6
Business Insider. (2025, June 7). Cathie Wood says the Musk‑Trump feud reveals how much Musk’s companies rely on the government. Business Insider. Retrieved from https://www.businessinsider.com/cathie-wood-musk-trump-ark-invest-2025-6
The Guardian. (2025, June 6). Elon Musk’s feud with Trump likely won’t blow up Tesla’s robotaxi push… (translation). El País. Retrieved from https://www.guardian.com/technology/2025/jun/06/elon-musk-donald-trump-fight-geopolitical-repercussions
Eurasia Review. (2025, June 9). Trump and Musk brawl: geopolitical repercussions. Eurasia Review. Retrieved from https://www.eurasiareview.com/09062025-trump-and-musk-brawl-geopolitical-repercussions-oped/
Al Jazeera. (2025, June 7). Trump warns Musk of ‘serious consequences’ if he funds Democrats. Al Jazeera. Retrieved from https://www.aljazeera.com/news/2025/6/trump-warns-musk-serious-consequences
New York Post. (2025, June 6). Tesla shares jump 5% after all-out Trump‑Musk feud wipes out $150B market value. New York Post. Retrieved from https://nypost.com/2025/06/06/business/tesla-shares-jump-5-after-trump-musk-feud/
Wired. (2025, June 7). Elon Musk’s fight with Trump threatens $48 billion in government contracts. Wired. Retrieved from https://www.wired.com/story/elon-musk-federal-contracts-government
AP News. (2025, June 7). Musk could lose billions of dollars depending on how spat with Trump unfolds. AP News. Retrieved from https://apnews.com/article/63bb732f2ce6ad3744f24762526286c3
