Elon Musk is the world’s richest person partly due to his companies’ impressive innovations. But his wealth is also due to government contracts and programs that affected his two main businesses – electric vehicles and space travel.
Now President-elect Donald Trump has tasked the Tesla and SpaceX CEO with eliminating waste from the federal government. In the new role, Musk will help direct policies on a wide range of issues and government bodies, including those that regulate his many business interests.
For example, Musk and Trump watched SpaceX’s launch Tuesday night of the rocket that could someday take people back to the moon and even to Mars. The amount the US commits to those efforts will greatly affect SpaceX’s financial success.
Government crucial to Musk’s net worth
It’s worthwhile to ask just how much of his world-leading net worth comes from government help over the last 10 to 15 years. The answer is not simple.
By some measures, little of his wealth is thanks to taxpayers. Musk is worth an estimated $326 billion, according to Bloomberg’s real-time billionaire tracker. His companies have received “only” tens of billions from government contracts and programs.
But in other ways, virtually all of his net worth can be pinned to government help. Tesla and SpaceX got started – and survived their early days – with assistance from state and federal policies, government contracts and loans.
“The foundation for Musk’s financial success has been the US government,” said Daniel Ives, tech analyst for Wedbush Securities.
And the value of Tesla and SpaceX doesn’t come from their profits so far.
Instead, their value comes from investments in their future worth, such as Tesla’s publicly traded stock and private funding rounds for SpaceX.
Since Trump’s election, Musk’s net worth has increased $64 billion, or nearly 25%, according to Bloomberg’s estimate. This is partly based on the assumption that future growth will be easier with Musk offering advice on topics including artificial intelligence, self-driving vehicles and funding for agencies that have given his companies regulatory trouble.
