Elon Musk isn’t the one tech billionaire with energy over the federal companies that regulate his companies. Since Donald Trump took workplace, greater than three dozen staff, allies, and traders of Musk, Peter Thiel, Marc Andreessen, and Palmer Luckey have taken roles at federal companies, 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 line with a Wall Avenue Journal evaluation. And so they’re actively pursuing billions extra.
These appointments, that are in departments that oversee, regulate, and award enterprise to the 4 males’s corporations, elevate plenty of crimson flags. They might violate conflict-of-interest legal guidelines or authorities ethics rules, each of which prohibit federal staff 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 fee 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 companies 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 lately to not impose any kind of extra ethics safeguards on high-level appointees,” Daniel Weiner, director of the Brennan Middle’s Elections and Authorities Program, advised TechCrunch. He famous that Trump fired at the least 17 folks on the Workplace of Authorities Ethics, together with the director, instantly after taking workplace.
“It definitely does doubtlessly improve the danger that you’ve folks engaged on issues that do influence, at the least not directly, their backside traces,” Weiner mentioned. “However this can be a long-term difficulty in our authorities that’s not distinctive to this administration.”
Innovation versus accountability
Some could argue that it is smart for workers and associates of Musk, Thiel, Andreessen, and Luckey to hitch authorities companies. Their insiders are proficient people who’re behind the cutting-edge expertise the federal government genuinely wants, and so they perceive easy methods to innovate rapidly and compete globally.
Extra critical questions come up when favoritism threatens to undermine competitors, when coverage is created or destroyed to guard market dominance, or when rules that might serve the general public good are waylaid to advertise enterprise pursuits.
As an example, the Shopper Monetary Safety Bureau just lately retreated from pursuing guidelines that might prohibit knowledge brokers, regardless of rising privateness issues – 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 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 US has proper now’s that we have now a system by which the very wealthiest pursuits have a lot energy to form our elections after which flip round and form authorities coverage,” Weiner mentioned.
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 dangerous rules that “crush our innovators,” notably those that are innovating in AI.
“Many individuals in Silicon Valley are inclined to assume that no matter labored in Silicon Valley can also be going to work for administering the US authorities,” Weiner mentioned. “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 exterior
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 companies. And in lots of circumstances, these companies 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 companies, from the manager workplace of the president and Workplace of Personnel Administration all the way in which all the way down to the Division of Transportation and the Division of Vitality.
SpaceX staff are additionally in companies that might present the corporate new enterprise. For instance, the Journal studies that SpaceX senior engineer Theodore Malaska received an ethics waiver in February that lets him take a brief 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 mentioned on X the company has used Starlink to improve a climate observing system in Alaska.
SpaceX can also be the primary industrial supplier that transports crew and cargo for NASA. Regardless of nationwide safety issues – like the corporate’s secret backdoor for Chinese language funding and Musk’s reported behavior of drug-taking – SpaceX in April gained $5.9 billion of a $13.7 billion multi-year contract from the U.S. Area Drive in April to launch Pentagon missions. The DOD, which is at present 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 almost $376 million since 2020 from Well being and Human Providers. In 2024, the corporate was additionally awarded at the least $1.2 billion in Division of Protection contracts in 2024, and is within the working for one more $100 million deal.
Anduril, Palantir, and SpaceX just lately 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 government, Michael Obadal, has been nominated to a high position on the Division of Protection. In his ethics disclosure, he acknowledged 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 in the end very dangerous for our economic system,” Weiner mentioned. “As a result of as a substitute of the federal government making selections which can be meant to foster competitors, foster financial progress, you run the true threat that authorities selections are going to as a substitute be structured round defending specific corporations and specific industries from full financial competitors.”
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