Elon Musk isn’t the one tech billionaire with energy over the federal businesses that regulate his companies. Since Donald Trump took workplace, greater than three dozen workers, allies, and traders of Musk, Peter Thiel, Marc Andreessen, and Palmer Luckey have taken roles at federal businesses, serving to direct billions in contracts to their corporations.
Corporations owned, based, or invested in by Musk, Thiel, Andreessen, and Luckey have collected greater than a dozen federal contracts totaling about $6 billion since Trump’s inauguration in January, in keeping with a Wall Avenue Journal evaluation. They usually’re actively pursuing billions extra.
These appointments, that are in departments that oversee, regulate, and award enterprise to the 4 males’s corporations, increase numerous pink flags. They may violate conflict-of-interest legal guidelines or authorities ethics laws, each of which prohibit federal workers from utilizing public workplace for personal achieve.
And whereas it’s commonplace to put in trusted allies in authorities roles, Musk’s community has moved in at an unprecedented charge and scale. TechCrunch has beforehand reported on the entire folks in Musk’s universe who’ve joined him at DOGE, the place he has shuttered federal businesses and slashed workforces in departments that regulate his companies. At the least 19 others with Silicon Valley connections, be they founders or traders, have additionally joined DOGE.
“The second Trump administration is definitely the primary in recent times to not impose any kind of further ethics safeguards on high-level appointees,” Daniel Weiner, director of the Brennan Middle’s Elections and Authorities Program, informed TechCrunch. He famous that Trump fired the director of the Workplace of Authorities Ethics and 17 inspectors normal who served as watchdogs for fraud and abuse, instantly after taking workplace.
“It definitely does doubtlessly enhance the danger that you’ve got folks engaged on issues that do affect, a minimum of not directly, their backside traces,” Weiner stated. “However it is a long-term challenge in our authorities that’s not distinctive to this administration.”
Innovation versus accountability
Some might argue that it is sensible for workers and associates of Musk, Thiel, Andreessen, and Luckey to affix authorities businesses. Their insiders are proficient people who’re behind the cutting-edge expertise the federal government genuinely wants, they usually perceive how one can innovate shortly and compete globally.
Extra severe questions come up when favoritism threatens to undermine competitors, when coverage is created or destroyed to guard market dominance, or when laws that may serve the general public good are waylaid to advertise enterprise pursuits.
As an illustration, the Shopper Monetary Safety Bureau not too long ago retreated from pursuing guidelines that may limit knowledge brokers, regardless of rising privateness considerations — a shift that stands to learn corporations concerned in AI, surveillance, and knowledge analytics. One other instance is DOGE’s firing of staffers on the Nationwide Freeway Site visitors Security Administration who examine autonomous automobile security, together with a number of probes into Tesla.
“One of many defining structural challenges the federal government of the USA has proper now’s that we have now a system through which the very wealthiest pursuits have a lot energy to form our elections after which flip round and form authorities coverage,” Weiner stated.
One other Silicon Valley appointee, Mike Kratsios — a former Thiel worker — is now main expertise coverage for the U.S. authorities. In an April speech, he spoke about throwing away unhealthy laws that “overwhelm our innovators,” significantly those that are innovating in AI.
“Many individuals in Silicon Valley are inclined to suppose that no matter labored in Silicon Valley can be going to work for administering the USA authorities,” Weiner stated. “And as we’re seeing now, the hazard is lots of people are going to get harm due to the assumptions they make.”
“The truth that you had a profitable startup after 5 others failed doesn’t essentially imply you know the way to run the Social Safety Administration,” he continued.
A community inside and a payoff outdoors
All the companies between Musk, Thiel, Andreessen, and Luckey are associated. Musk’s SpaceX was backed by Thiel’s Founders Fund and Andreessen’s a16z (which additionally invested in X and xAI). Each of these VCs additionally backed Anduril, Luckey’s protection startup.
The overlapping community of founders, funders, and insiders extends into a number of federal businesses. And in lots of circumstances, these businesses are steering billions in federal contracts again to these corporations.
The Journal discovered that throughout Washington, folks from Musk’s community, together with Tesla, X, and SpaceX, are in additional than a dozen businesses, from the manager workplace of the president and Workplace of Personnel Administration all the way in which right down to the Division of Transportation and the Division of Vitality.
SpaceX workers are additionally in businesses that would present the corporate new enterprise. For instance, the Journal stories that SpaceX senior engineer Theodore Malaska bought an ethics waiver in February that lets him take a short lived job on the Federal Aviation Administration whereas nonetheless working on the rocket firm. The FAA hasn’t given any contracts to SpaceX but, however Malaska stated on X the company has used Starlink to improve a weather-observing system in Alaska.
SpaceX can be the primary industrial supplier that transports crew and cargo for NASA. Regardless of nationwide safety considerations — like the corporate’s secret backdoor for Chinese language funding and Musk’s reported drug use — SpaceX in April gained $5.9 billion of a $13.7 billion multi-year contract from the U.S. House Drive to launch Pentagon missions. The DOD, which is presently a Starlink buyer, additionally plans to purchase SpaceX’s Starshield satellites, a militarized model of the web satellites.
Staff at Thiel-backed corporations have discovered themselves in roles within the State Division, the Workplace of Administration and Price range, Well being and Human Providers, and Social Safety, per The Wall Avenue Journal. Thiel’s Palantir has already been awarded practically $376 million since 2020 from the Division of Well being and Human Providers. In 2024, the corporate was additionally awarded a minimum of $1.2 billion in Division of Protection contracts in 2024 and is within the working for one other $100 million deal.
Anduril, Palantir, and SpaceX not too long ago submitted a multibillion-dollar proposal for Trump’s “Golden Dome” missile-defense program, which might additionally add to Anduril’s present contracts with the U.S. Military. Just lately, Anduril and Microsoft took over a 2021 contract value as much as $22 billion to develop AR headsets, per the Journal.
An Anduril govt, Michael Obadal, has been nominated to a high position on the Division of Protection. In his ethics disclosure, he said that he would retain his Anduril inventory if appointed.
TechCrunch has reached out to Anduril, Andreessen Horowitz (a16z), Palantir, and SpaceX for remark.
“This kind of focus of personal wealth and political energy is finally very dangerous for our economic system,” Weiner stated. “As a result of as an alternative of the federal government making choices which are supposed to foster competitors, foster financial development, you run the true danger that authorities choices are going to as an alternative be structured round defending explicit corporations and explicit industries from full financial competitors.”
