- DOGE is a way for Elon Musk “to sort of carve out a rent-seeking opportunity extraordinaire,” USC professor Jeb Barnes said, pointing to an already successful tactic for him: accumulating subsidies. Musk has reportedly collected $38 billion in government funding over the years through contracts, loans, subsidies, and tax credits, according to a recent Washington Post analysis.
Elon Musk runs a number of multibillion-dollar companies that have made him the world’s richest man. Part of that comes from his skill in collecting money from the government, according to Jeb Barnes, a professor of political science for the University of Southern California.
“He’s done it with all of his businesses,” Barnes told Fortune.
Musk has reportedly collected at least $38 billion in funding through government contracts, loans, subsidies, and tax credits that go as far back as 20 years, according to a recent Washington Postanalysis. His electric-car maker Tesla has collected $11.4 billion in regulatory credits, per the Washington Post, but most of the funds (via government contracts from NASA and the Department of Defense) are to his rocket maker, SpaceX. A separate ABC Newsanalysis found SpaceX and Tesla were granted at least $18 billion in federal contracts in the past decade.
Some of that government money came at crucial times for his companies. In one instance, it was a $465 million loan from the Energy Department to Tesla that Musk was reportedly personally involved in securing. He held daily meetings with Tesla executives and spent hours with the loan officer. But when the loan went through, Tesla was missing a certification it needed to qualify—so Musk reportedly went directly to the administrator around Christmas time to get it done. “Tesla would not have survived without the loan,” a former Tesla employee told the Washington Post. “It was a critical loan at a critical time.” (Tesla benefited from a federal tax credit of up to $7,500 for those who buy its electric cars, too—and if it’s killed, it could hurt Tesla, but it would devastate almost every other EV maker). The outlet also reported that government contracts helped build SpaceX’s infrastructure so that it could actually build and launch rockets.
Barnes said Musk has put himself in a position to reinforce that “subsidy harvesting strategy” by working so closely with Trump in his new administration. He can target different parts of the government that make sense for him and he can attack agencies that investigate his companies, Barnes said. At least 11 federal agencies that have been affected by cuts, layoffs, or firings have over 32 investigations, pending complaints, or enforcement actions into Musk’s six companies, according to a New York Timesanalysis. A fact sheet put together by the House Committee on the Judiciary identified a number of agencies that it claims are early targets of DOGE and the Trump administration—and that includes USAID, which initiated a probe into satellite terminals Musk’s Starlink (part of SpaceX) provided to Ukraine. USAID has since been dismantled.
Musk is entrusted with cutting costs for the federal government. The Musk-led Department of Government Efficiency (DOGE) claims to have saved the government an estimated $115 billion from a combination of asset sales, cancellations of contracts and grants, programmatic changes, and workforce reductions. However, some argue there are inaccuracies in DOGE’s “wall of receipts,” which the department makes publicly available. A partner at a private-equity firm previously toldFortune the total savings could be overstated by up to 80%. Items DOGE claims saved billions of dollars, could actually only be millions, or even hundreds of thousands of dollars, the private-equity professional said.
Musk might even be making a play to fold in artificial intelligence by creating a market for chatbots and other applications in the government, Barnes said, calling it the ultimate contract. There are some signs that this could already be happening, such as one of his staffers reportedly creating an AI chatbot to streamline processes at DOGE. Musk is founder and CEO of xAI, which makes the Grok chatbot that’s available to use on his X social network. xAI is rumored to be raising a $10 billion funding round at a $75 billion valuation, Bloomberg reported last month. But xAI, despite only being two years old, has also benefited from tax breaks: As Fortunereported in January, xAI signed a 10-year data center deal in Atlanta, finalized the day after Christmas, which shows that xAI and Musk’s X will together receive a property tax discount worth an estimated $10.1 million. The companies had spent a reported $700 million for equipment to fill the center.
“This is a way for him to sort of carve out a rent-seeking opportunity extraordinaire,” Barnes said.
SpaceX, Tesla, and DOGE did not immediately respond to Fortune’s request for comment.
The question of Musk’s potential conflicts of interest has been raised since President Donald Trump tapped him to run the cost-cutting body. But it is up to Musk to decide when there is a conflict of interest and when to remove himself.
In a statement to Fortune, Principal Deputy Press Secretary Harrison Fields previously said in an email: “Any contracts connected to Elon Musk’s very successful companies will comply with every government ethics rule as it pertains to potential conflicts of interests. The Trump administration will not play favorites in its mission to cut waste, fraud, and abuse.”
