Contact with pro-Putin broadcaster, expansion of business in China
US government 'fear' of Musk's political influence
As the U.S. government announced a tough policy to block contacts with concern countries such as China through the Semiconductor Support Act, criticism is emerging that it is unable to take action against Tesla CEO Elon Musk's pro-China and pro-Russia moves. As the influence of the five major companies he leads expands and his economic and political standing grows, there are concerns within the Biden administration about the potential unexpected situations that his eccentric behavior could trigger.
Elon Musk (fourth from the left) watching the Qatar World Cup final match on December 18 last year [Image source=Reuters Yonhap News]
On December 18 last year (local time), during the Argentina vs. France World Cup final held in Qatar, cameras caught Elon Musk taking a 'selfie' with Nayilya Aske Zade, a broadcaster who mainly appears on Russian state television. There were people who felt uneasy seeing Musk chatting with a bright smile with the 30-something female broadcaster who has defended Russian President Vladimir Putin. Those were officials from the Joe Biden U.S. administration.
Bloomberg recently reported an article titled "Elon Musk's global empire is making U.S. politics treat him as an urgent issue." While the companies led by Musk have achieved great success and he wields tremendous influence worldwide, Bloomberg assessed that his 'eccentric' behavior and unilateral decision-making have become a headache for the Biden administration.
Musk is the CEO of Tesla, the world's number one electric vehicle company; SpaceX, a space exploration company; Starlink, a low-earth orbit satellite communication service; Twitter, a social networking service (SNS); and The Boring Company, a tunnel excavation company. All these companies are thriving in their respective industries. Starlink and SpaceX are also engaged in government projects directly related to U.S. national security.
Bloomberg explained, "There is no evidence that the meeting between Musk and Aske Zade was inappropriate," but added, "From the perspective of U.S. officials, considering Musk's immense influence and the importance of his responsibilities, it clearly shows that there is a problem with Musk."
◆ Musk and Biden: 'Frenemies' after years of tension
Musk and the Biden administration have maintained a peculiar relationship for years. First, Musk and President Biden have engaged in public spats to the extent that they could be called 'frenemies.'
In March last year, when President Biden emphasized the electric vehicle production efforts of domestic automakers Ford and General Motors (GM) in his State of the Union address but did not mention market leader Tesla, Musk pushed back. Then in June of the same year, when Musk told Tesla executives that he had "a very bad feeling" about the economic outlook, President Biden responded by saying, "The U.S. labor market is the strongest since World War II," and sarcastically wished Musk "good luck on his trip to the moon."
In November last year, ahead of the U.S. midterm elections, Musk posted on his Twitter, "Vote Republican." In the same month, shortly after Musk acquired Twitter, President Biden sharply criticized him, saying, "What are we all worried about? Musk bought a platform to spread lies worldwide," and added, "There are no editors in America anymore."
Additionally, Biden's core policy stance of being 'pro-union' has clashed significantly with Musk, who opposes unions.
◆ Smiles exchanged over opening EV charging stations, but...
In fact, considering Musk's influence and the nature of his businesses, there seems to be room to build a constructive relationship aligned with the Biden administration's broader agenda.
For example, Tesla, Musk's flagship company, is the leading electric vehicle manufacturer central to the Biden administration's climate change policies. In January, White House officials met with Musk and Tesla executives at Tesla's Washington, D.C. office to discuss ways to help the administration achieve its climate goals. Later last month, when Musk announced that Tesla's exclusive charging stations would be opened to other electric vehicles, President Biden tweeted, "That's great," to which Musk replied, "Thank you."
Starlink becoming a key communication tool for Ukraine after Russia's invasion was initially viewed positively by the Biden administration. When Ukraine's internet infrastructure was disrupted following the Russian invasion, Musk provided Starlink services free of charge, greatly aiding Ukraine's military efforts. Although in October last year, Musk suddenly raised prices two months later after stating he could no longer provide free support, which surprised both the U.S. and Ukrainian governments.
Also, SpaceX conducted $3 billion worth of federal government projects last year alone, maintaining a close relationship with the Biden administration. Bloomberg reported that Musk and SpaceX have supported members of Congress for years, fostering close ties with U.S. politics.
◆ Why Biden finds it hard to fully embrace Musk
However, Musk's unilateral decision-making style and his way of resolving conflicts with the government after causing incidents have led to clashes with the Biden administration.
In October last year, Musk faced backlash after posting a Russia-biased mediation proposal on Twitter suggesting Ukraine should give up Crimea. Given that he was effectively supporting Ukraine through Starlink services, this statement surprised both Ukraine and the U.S. government. In the same month, Musk also sent an invoice to the U.S. Department of Defense requesting payment for Starlink service provision.
Moreover, the companies led by Musk have repeatedly clashed with regulatory bodies such as the U.S. Securities and Exchange Commission (SEC), the Department of Justice, and the National Highway Traffic Safety Administration (NHTSA). Bloomberg described the relationship as a kind of "whack-a-mole," where regulators respond whenever something goes wrong at Musk's companies.
Particularly, Musk's acquisition of Twitter, a leading SNS platform that champions 'freedom of expression,' has been the most frustrating issue for the Biden administration, Bloomberg reported. Since Musk's takeover, many Twitter employees have been laid off, fake news has spread, and Republican supporters have rallied, causing continuous discomfort for the Biden administration.
Within the current U.S. administration, some senior officials reportedly feel fear over Musk's vast wealth, business, and political influence, Bloomberg said. There are also concerns about Musk's moves such as Tesla's growing presence in China and his heavy reliance on Middle Eastern funds related to the Twitter acquisition.
One U.S. government official described Tesla to Bloomberg as "a Chinese company with an American subsidiary," referring to the fact that more than half of Tesla's global production last year came from its Shanghai factory. Bloomberg also reported, citing anonymous sources, that the Biden administration considered conducting a security investigation related to Musk's Twitter acquisition.
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