Elon Musk’s gamble, worth hundreds of millions of dollars, pays off spectacularly

Elon Musk put it all on red.

Well, not all of it. When you’re worth hundreds of billions of dollars, I’m not sure it’s even possible to go all in. But he did gamble a good $US277 million ($435 million) on Republican Donald Trump winning the American presidency.

It paid off. Hooooo boy, did it pay off. But we’ll get to that in a bit.

So, $435 million. That’s the total amount Mr Musk reportedly spent on his efforts to get Mr Trump elected, by donating money to various political action committees, buying ads and so forth. Not necessarily a decisive number, given American presidential elections these days involve billions of dollars in spending, but far more than any other person put forward.

It’s also an unfathomably large amount of money for anyone who isn’t a multi-billionaire.

That figure does not, of course, count the influence he exerted through the social media site he owns, Twitter. Mr Musk spent much of 2024 bombarding his 200 million or so followers with pro-Trump, anti-Democrat messaging. And data indicates the platform’s algorithm was quietly tweaked in the middle of July (on the exact date its owner endorsed Mr Trump) to amplify pro-Republican posts.

One might detect some irony there, given part of Mr Musk’s rationale for buying Twitter in the first place was its alleged political bias in the other direction. Bias for me but not for thee is the moral here, it appears.

Mr Musk also lent his cultural influence to Mr Trump’s campaign, appearing repeatedly on stage during the now-President-elect’s rallies and helping to integrate him, even more than before, with a network of podcasters and influencers who have huge followings, particularly among young men.

It was during an interview with Mr Musk, shortly before the election, that king of the brosphere Joe Rogan announced his endorsement of Mr Trump.

So, there we have an abbreviated version of what Mr Musk gave, or what he invested, if you prefer the vernacular of a McKinsey consultant, as most Musk stans do. What did he gain? Or what was his return on the investment?

Two things. First, money. Soooo much money. Today The Washington Post reported that Mr Musk’s overall wealth had grown by $US200 billion ($314 billion) this year, $US170 billion ($267 billion) of which he’s accumulated since the election.

This wealth increase comes despite the monumental cratering of Twitter’s value since Mr Musk purchased it. Backing the winning candidate in America’s election has been very, very lucrative for his businesses.

In a purely mathematical sense, then, the gamble has delivered. He threw a bunch of money, equivalent to the total GDP of a small country, on Republican red, and it delivered him a truly stupendous profit. The image above is appropriate.

If Kamala Harris had won the election, one suspects Mr Musk would be in a rather different financial situation. Luckily for him, Mr Trump’s extra 1.5 per cent of the vote was distributed quite efficiently throughout the key swing states.

The second thing he gained matters more: influence. Something that could obviously be used, over the next few years, to maximise the aforementioned money, particularly as Mr Trump has expressed no qualms about giving his pet tech boss regulatory power over his own companies.

But Mr Musk appears to be at a level of wealth where raw riches interest him less than adulation and cultural capital. He’s first and foremost a culture warrior now.

The dividend here, too, has been immense. Mr Musk has not just been named to co-lead a new government department, whose goal is ostensibly to cut down on waste, but has spent the weeks since Mr Trump’s election victory trotting around the country with him, hanging out at the UFC, or at the football, or in family photos (Melania Trump being absent), or with a haul of McDonald’s on his private plane, always lurking over his shoulder.

He’s the Wormtongue to Mr Trump’s Theoden. He’s become a sort of mega-enthusiastic, stage five clinger MAGA groupie.

You do wonder when, and where, and how, Mr Musk actually works. The guy is CEO of multiple high-powered companies, all of which presumably require some attention from their chief executive. Mr Musk, meanwhile, is loitering around Mar-a-Lago, or wherever else Mr Trump happens to be at any given time. And tweeting every ten minutes. And streaming various gaming exploits.

He’s essentially been a full-time political operative since the middle of the year, when he moved his home base to the swing state Pennsylvania and made Mr Trump’s campaign his primary focus.

I do not, and very, very likely never will, sit on any corporate boards. Yet common sense indicates to me that a company’s chief executive should probably be focused on, ya know, the company. And were I on the board of such a company, I would be distinctly unimpressed by an executive who spent his days playing at politics instead of doing his job.

Not to mention Mr Musk’s vehement opposition to regular workers – you know, the low-paid, minimum wage kind – doing their jobs from home. One simply must be in the office, says Mr Musk. While never going to the office himself, because he’s working remotely from his political benefactor’s Florida resort.

It’s a two-tiered system, isn’t it? One rule for the all-knowing, all-powerful billionaire boss, and another for the underlings.

Our beloved CEO tech bro can join his Zoom meetings remotely while downloading the latest Diablo patch and sitting in on the President-elect’s phone call with the Ukrainian President.

Meanwhile some poor Twitter coder has to commute three hours a day, or risk being sacked.

I’m harping on about this because it feels like a metaphor, of sorts, for the government Mr Trump is building. On the most important level it’s an administration of loyalists who will do whatever he wants without question, and pursue his enemies with vigour. In that category we have people like Kash Patel and Tulsi Gabbard.

On another level, though, it’s an administration of the ultra-wealthy, specifically those who sought to buy influence with Mr Trump during his candidacy.

Eight billionaires – eight – who donated tens of millions of dollars to him have been selected to serve in his cabinet.

I honestly do not know how the same people who look at George Soros’s role in Democratic Party politics, and concoct endless conspiracy theories about his malicious influence, react to Mr Trump transparently rewarding multiple billionaires, with vested interests, for supporting him by shrugging their shoulders. But here we are.

Plenty of rich people spent millions trying to help Kamala Harris win. Money undoubtedly plays a toxic role in Democratic politics as well. The difference here is that, if Ms Harris had won, and filled half her cabinet with high-powered donors, conservative media would have quite rightly screamed bloody murder. When Mr Trump does it? Nothing. Not a peep.

So there’s that. But there are also the policy consequences. Surround yourself with business moguls and you are going to end up with policies that favour the mogul, trying to stamp out competition, over the struggling start-up owner trying to break through.

Being pro-business, or pro-economic growth, isn’t as simple as giving the richest people in society a carte blanche to do whatever the hell they want.

I can understand why someone who was born wealthy, inherited a real estate empire and has spent his life hobnobbing with the rich and famous would think Elon Musk and his ilk are the key to economic prosperity. What else would Mr Trump think? He doesn’t know what it’s like to start a cafe in suburban Indianopolis, or a family-run restaurant in San Francisco. He’s spent his life putting his name on multimillion-dollar buildings. He’s a big business guy.

But small business is the engine of any modern economy. According to our latest data, of all the businesses in the US, more than 99 per cent are small businesses.

There is a monumental difference between a government that tries to supercharge the growth of those businesses, and one whose chief mission is to minimise the tax paid by self-interested oligarchs.

Mr Trump promised the former, insofar as his economic promises were even coherent. He is constructing a government staffed by people with every incentive to do the latter.

Twitter: @SamClench