Trump enlists Musk: Tech regulations poised for a shake-up

Donald Trump is making a return to the White House. The Republican candidate for President of the USA secured victory in the presidential election, as reported by CNN late in the morning Greenwich Time. Although official results are still pending, estimates suggest that the politician exceeded the necessary threshold of 270 electoral votes, convincingly defeating Kamala Harris.

Throughout the campaign, he received significant backing from billionaire Elon Musk, founder of Tesla and SpaceX and owner of X (formerly Twitter). It is highly likely that one of the world's wealthiest individuals will join the US President's administration. Trump made this promise on two occasions, stating that if elected, he would offer Musk a governmental or advisory role. "He's a very smart guy," Trump remarked.

During the campaign, there were discussions suggesting that Musk might seek to find savings within the American budget. At one of the final rallies before the election, the billionaire informed voters that he "prayed for Trump's victory so he could start working at a high level in his administration and curb federal spending". "We must cut expenditure to live within our means," Musk declared at the end of October. "As you know, this involves temporary difficulties, but in the long run, it will ensure prosperity," he maintained.

On Wednesday morning, Donald Trump once again commended Musk, stating, "we must protect our super geniuses." Overnight, Musk actively commented on the ongoing tally of election results. In one of his initial posts, he penned the emphatic "game, set, match," implying his anticipation of Trump's victory. In another post, he shared a photograph from a ceremonial dinner with Trump and expressed that the future will be phenomenal.

Krystian Łukasik, a senior analyst with the digital economy team at the Polish Economic Institute, suggests that Musk's potential entry into Trump's administration could lead to a relaxation of regulations affecting certain technology sectors. "The benefits may be most apparent to businesses operating in sectors similar to those of Elon Musk's companies. The billionaire's lobbying will likely emphasize easing oversight on companies like Tesla and SpaceX, particularly concerning environmental and safety regulations. However, more favourable conditions for Musk's projects do not necessarily translate into benefits for the entire tech sector. Donald Trump has a history of conflicts with tech giants, and companies previously disinclined towards Trump may face heightened tensions," assesses Krystian Łukasik.

Could Musk's enterprises be heading towards more prosperous times? Under the Biden administration, his companies faced numerous investigations by the Department of Justice, the Securities and Exchange Commission (SEC), and the National Highway Traffic Safety Administration (NHTSA).

- This prompted Musk to seek political allies who, in return for financial support during the election campaign, would pledge a more lenient approach towards tech company regulations. Elon Musk's alliance with Donald Trump is likely to result in more relaxed regulations concerning the introduction of autonomous vehicles, more favourable terms in areas such as labour law and environmental protection regulations, lower tax rates, and enhanced opportunities for securing government contracts for SpaceX - predicts the PIE analyst.

Dr Michał Kuź from the Jagiellonian Club and Łazarski University also believes that Musk will gain from Trump's victory. "Trump is wealthy, but he is not a real member of the super-elite like Elon Musk or Jeff Bezos. Musk has shown ingenuity and political acumen; very few from the top business echelons supported Trump. Remember, Musk is not only associated with X and Tesla; he is a significant federal government contractor. Being close to Trump brings benefits, even in light of potential conflicts of interest," comments Dr Kuź for money.pl.

The expert also highlights the increasingly prominent trend of "tech-right" in American politics, of which Musk is a prime example. "Currently, it's a minority group connected with high technology, but their numbers are set to rise. These individuals see the combination of 'environmentalism' and progressive censorship as threats to technological advancement, viewing them as hindrances," Dr Michał Kuź tells us.

In his view, while there may not be a complete overhaul in American big tech, there will undoubtedly be a relaxation of regulatory constraints for companies engaged in government contracts. As for Musk, he might not remain long within the administration, as Trump is known for frequently changing his associates - assesses Dr Kuź.

Dr Przemysław Kwiecień, an XTB analyst, predicts that Musk will serve in an advisory capacity within the administration, but will not be fully immersed given his management of several substantial businesses.

I anticipate that he will collaborate with Trump on selected solutions. His role will certainly be interesting - says the XTB analyst to money.pl.

In light of the election result, it is not surprising that Tesla's shares surged significantly on Wednesday.

The expert notes that discussing the prospects of government contracts with Musk's companies remains challenging. "The administration will likely seek to project the image that Musk is somewhat distanced, at least not strongly acquiring contracts. However, it is difficult to say more at this moment," Dr Kwiecień explains.

In his opinion, there will not be a major shift in the government's stance towards big tech, although some may have cause for concern. "The first focus will be on Google." Trump accused it of discriminating against him in search results. The company might face increased pressure, but formally, the change in the White House shouldn't result in additional cases - evaluates the XTB analyst. He believes the scenario is less certain for other major tech firms.

For instance, he mentions Jeff Bezos's recent response, who also owns "The Washington Post." "He did not endorse Kamala Harris as the preferred presidential candidate. That carries considerable weight," he adds.

In a morning commentary on the XTB Poland channel, the expert emphasised that Musk was at one point the "number one figure, spin doctor for Donald Trump during the campaign". "It's widely acknowledged that he supports cryptocurrencies, and Trump was attempting to appeal to younger voters. Musk's presence and authenticity in his views are perceived favourably," Kwiecień noted.

Born in 1971 in Pretoria, Elon Musk has ample reason for euphoria on Wednesday. Following Trump's victory, Tesla shares surged by 15%. In just one night, it is estimated that Musk's wealth increased by £9.8 billion. At the end of December 2023, Bloomberg valued his fortune at £189 billion.