President Donald Trump on Thursday said the U.S. will not be pulling its subsidies of Elon Musk’s companies, despite earlier threats to do so and White House press secretary Karoline Leavitt’s Wednesday indication that the U.S. would not pursue contracts with his businesses.
Trump and Musk’s feud exploded last month after simmering criticism escalated into the president threatening to take away Musk’s government contracts, triggering a back-and-forth that effectively ended their relationship. On Thursday, Trump said that he would not take them away.
“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large scale subsidies he receives from the U.S. Government. This is not so! I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before!” Trump said in a post on Truth Social.
He reasoned that success for Musk’s companies would extend into prosperity for the U.S., so he wants to “keep it that way!”
His announcement came just one day after Leavitt indicated that the U.S. would not pursue contracts with Musk’s AI company.
“I don’t think so, no,” Leavitt responded when asked if Trump would support the move.
She was then asked if that meant the U.S. would withdraw its recently negotiated contract with xAI, to which she responded that she’d discuss the matter with the president.
Despite the fallout from their feud, Musk has continued to receive lucrative government contracts. Earlier this month, his xAI was awarded a multimillion-dollar contract with the Pentagon to “leverage the technology and talent of U.S. frontier AI companies to develop agentic AI workflows across a variety of mission areas.”
Musk’s company SpaceX informed investors this week that the billionaire “may in the future serve in similar roles and devote significant time and energy” to efforts similar to his stint as leader of the Department of Government Efficiency.
Though Musk’s businesses haven’t suffered directly for earning the ire of Trump, tensions between the two reached their zenith earlier this month. On July 1, the president threatened to deport Musk and use DOGE on his companies.
“I don’t know. We’ll have to take a look. We might have to put DOGE on Elon,” Trump told reporters. “You know what DOGE is? DOGE is the monster that might have to go back and eat Elon.”
“Wouldn’t that be terrible? He gets a lot of subsidies,” he continued.
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Trump’s retreat in rhetoric could signal a new detente between the two. Musk’s threats to create a new third party have largely evaporated following dismal polling.
Musk has faced criticism for his companies’ use of government contracts while he was a special government employee. One report estimated that Musk made over $100 billion while in his position.
