Business
What to know about Elon Musk's contracts with the federal government
Elon Musk is easily the world’s wealthiest man, with a net worth topping $300 billion.
But even he stands to make more money from his association with the federal government after placing a winning bet on Donald Trump’s election to the presidency.
“It’s going to be a golden era for Musk with Trump in the White House,” Wedbush Securities analyst Dan Ives said.
Musk’s aerospace company SpaceX has received billions of dollars in federal contracts, and could be line for more, while his five other businesses could gain from a lighter regulatory touch.
Trump has named Musk to co-head a new Department of Government Efficiency,” or DOGE — a nod to the cryptocurrency Musk adores. However, federal law bars executive branch employees, which can include unpaid consultants from participating in government matters that will affect their financial interests, unless they divest of their interests or recuse themselves.
Trump’s transition team has sought a work-around, saying he would “provide advice and guidance from outside of Government” with the work concluding by July 2026, according to a news release.
Richard Painter, a University of Minnesota Law School professor and former chief White House ethics lawyer, said that if Musk is truly working outside the government he doesn’t have to sell his assets, but that limits his influence.
“He can make recommendations, but ultimately the decisions are made by government officials,” Painter said.
Trump’s campaign and Musk’s companies didn’t respond to requests for comment.
Here’s how Musk could benefit from Trump’s presidency:
SpaceX
If there’s one Musk business that could profit the most from the incoming Trump administration, it’s SpaceX.
The company, which announced this year it was moving its headquarters from Hawthorne to Texas, already has received at least $21 billion in federal funds since its 2002 founding, according to government contracting research firm The Pulse. That includes contracts for launching military satellites, servicing the International Space Station and building a lunar lander.
However, that figure could be dwarfed by a federal initiative to fund a Mars mission, which is the stated goal of SpaceX.
A SpaceX Falcon 9 rocket with the Crew Dragon space capsule lifts off from Kennedy Space Center in Cape Canaveral, Fla., on Friday.
(Associated Press)
“Elon Musk is wealthy, but he’s not wealthy enough to completely fund humans to Mars. It needs to be a public, private partnership, because of the tens of billions of dollars that this would cost, or even hundreds of billions dollars,” said Laura Forczyk, executive director of space industry consulting firm Astralytical.
SpaceX has already made big strides testing his Starship rocket, the most powerful ever built. NASA envisions employing the rocket in its Artemis program to return humans to the moon, but it has been designed to have enough thrust to propel a spacecraft to Mars. What’s more, Trump, during his first presidency, speculated on Twitter about why the United States was focusing on the moon instead of Mars.
Still, there are technical challenges, with SpaceX yet to complete the $4-billion Starship lunar lander, which would have to be modified for Mars. And without a pressing geopolitical threat, Congress may be unwilling to spend more on space exploration, as it did during the 1960s with the Apollo program, Forczyk said.
Should a Mars project not materialize, SpaceX could still reap rewards in the next four years. For example, the Federal Communications Commission denied SpaceX nearly $900 million in federal subsidies to provide rural broadband access through its Starlink satellite network. Under new FCC leadership, Forczyk sees that being reversed.
SpaceX also has Starlink contracts with the military, including a $70-million award from the U.S. Space Force last year, according to Space News.
Tesla
Trump’s policies could reduce the sales of electric vehicles, but with Musk’s influence, his administration’s policies could boost Tesla — though not with federal funding.
For example, Trump, who tempered criticism of electric vehicles after Musk backed him, might end a $7,500 tax credit for electric vehicles. That would hurt Tesla’s unprofitable rivals that rely more on the tax credits to lure customers.
“Tesla is the only automaker that has the scale and scope to price vehicles in a $30,000-to-$40,000 range and make significant profits,” Ives said. “It would essentially take competition out of the market.”
Trump’s Republican administration also is considering imposing tariffs on Mexico and China, which could make cars more expensive. Ives said he expects Trump to make exceptions for Tesla and Apple so they’re not hit by a tax on imported goods.
Tesla receives only a smattering of federal contracts, according to USAspending.gov, a database that tracks U.S. government spending.
A Tesla store at Cherry Creek Mall in Denver on Feb. 9, 2019.
(David Zalubowski / Associated Press)
This year, Tesla received at least $2.8 million from the Pennsylvania Department of Transportation through a federally funded program to deploy EV charging stations.
From 2022 to 2024, Tesla and its subsidiaries were awarded at least $631,800 in federal contracts mainly to provide vehicles for the U.S. embassies in Singapore, Iceland and Thailand, the data showed.
The pioneering electric vehicle maker, which saw its stock surge after Trump’s win, has clashed with regulators over safety concerns around its self-driving software. Musk, who has vowed to cut at least $2 trillion in federal spending, could pressure regulators looking into his companies.
xAI
Musk’s startup xAI doesn’t appear to have federal government contracts, but artificial intelligence companies could benefit in other ways under Trump.
Republicans and Musk have expressed support for cutting regulation to fuel AI innovation, a crucial part of the future of tech companies.
But Musk has also warned that AI could pose a threat to humanity, and it’s unclear how Trump plans to address potential safety risks that come with technology including fraud, bias and disinformation.
Trump plans to repeal President Biden’s AI executive order that partly aimed to address AI safety concerns by directing the federal government to take steps such as enforcing consumer protection laws, according to the GOP’s MAGA platform.
Americans for Responsible Innovation, an advocacy group, wants Musk to become a strategic AI advisor to Trump, saying, “As artificial intelligence races ahead, the U.S. should lead the world in advancing AI safely and securely.”
A newly constructed X sign on the roof of the headquarters of the social media platform previously known as Twitter is seen in San Francisco after Musk replaced the logo in July 2023.
( Josh Edelson / AFP via Getty Images)
X
X, formerly known as Twitter, served as an online megaphone for Musk, who constantly shared his support for Trump during the election season.
The social media site, which recently relocated its San Francisco headquarters to Texas, doesn’t appear to have any federal government contracts, but X could benefit from policy changes that affect its rivals such as Meta and TikTok.
Musk, who has declared himself a “free speech absolutist,” recently shared an old Trump video with the words “YES!” In the video from 2022, Trump says he would change Section 230, a law that shields platforms from liability for user-generated content.
Platforms would qualify for immunity only if the companies “meet high standards of neutrality, transparency, fairness and nondiscrimination,” Trump said.
The Boring Co.
Fed up with Los Angeles traffic, Elon Musk launched The Boring Co. with two tweets in 2016, promising “to build a tunnel boring machine and just start digging.”
The Bastrop, Texas, company, formerly headquartered in Hawthorne, has completed a 1.7-mile loop under the Las Vegas Convention Center and is building a larger citywide loop — both without federal funding. Projects in some other cities didn’t get past the proposal stages.
However, at Trump’s urging, congressional representatives could earmark local transportation projects to the benefit of Boring Co., though the company would still have to compete to win them, said Greg Griffin, a former urban planning professor at the University of Texas at San Antonio, who studied that city’s proposed Boring Co. project.
“There could be some alignment between the specific firm’s abilities and a [congressional] delegation that could support projects that match those abilities,” he said. “The concept they were offering was not without merit.”
Local projects are typically paid for with 20% local funding and 80% federal money.
Neuralink
Controlling robotic limbs. Seeing without eyes. Those are the kinds of miraculous advances Musk’s Neuralink startup has been trying to achieve.
The Fremont, Calif., company he co-founded in 2016 doesn’t receive federal money, but its technology and clinical trails are regulated by the Food and Drug Administration. The more hands-off approach favored by Trump could aid such medical device developers.
“We’re concerned that regulation in general in the FDA will be weakened under the second Trump administration, and particularly concerned about medical devices,” said Dr. Robert Steinbrook, health research group director for the consumer rights group Public Citizen.
Neuralink, which has raised more than $600 million in venture capital, has developed an implant the size of a coin with tiny wires that record brain activity. A paralyzed Arizona man became the first human to receive the implant in January and has since moved a cursor, browsed the internet and played video games with this thoughts. A second patient was implanted with the device in July.
Although the company is currently targeting people with disabilities, Musk has said the implants could be wedded with artificial intelligence to greatly magnify the intelligence of all humans — presenting its own set of thorny scientific and ethical issues.
Business
WGA cancels Los Angeles awards show amid labor strike
The Writers Guild of America West has canceled its awards ceremony scheduled to take place March 8 as its staff union members continue to strike, demanding higher pay and protections against artificial intelligence.
In a letter sent to members on Sunday, WGA West’s board of directors, including President Michele Mulroney, wrote, “The non-supervisory staff of the WGAW are currently on strike and the Guild would not ask our members or guests to cross a picket line to attend the awards show. The WGAW staff have a right to strike and our exceptional nominees and honorees deserve an uncomplicated celebration of their achievements.”
The New York ceremony, scheduled on the same day, is expected go forward while an alternative celebration for Los Angeles-based nominees will take place at a later date, according to the letter.
Comedian and actor Atsuko Okatsuka was set to host the L.A. show, while filmmaker James Cameron was to receive the WGA West Laurel Award.
WGA union staffers have been striking outside the guild’s Los Angeles headquarters on Fairfax Avenue since Feb. 17. The union alleged that management did not intend to reach an agreement on the pending contract. Further, it claimed that guild management had “surveilled workers for union activity, terminated union supporters, and engaged in bad faith surface bargaining.”
On Tuesday, the labor organization said that management had raised the specter of canceling the ceremony during a call about contraction negotiations.
“Make no mistake: this is an attempt by WGAW management to drive a wedge between WGSU and WGA membership when we should be building unity ahead of MBA [Minimum Basic Agreement] negotiations with the AMPTP [Alliance of Motion Picture and Television Producers],” wrote the staff union. “We urge Guild management to end this strike now,” the union wrote on Instagram.
The union, made up of more than 100 employees who work in areas including legal, communications and residuals, was formed last spring and first authorized a strike in January with 82% of its members. Contract negotiations, which began in September, have focused on the use of artificial intelligence, pay raises and “basic protections” including grievance procedures.
The WGA has said that it offered “comprehensive proposals with numerous union protections and improvements to compensation and benefits.”
The ceremony’s cancellation, coming just weeks before the Academy Awards, casts a shadow over the upcoming contraction negotiations between the WGA and the Alliance of Motion Picture and Television Producers, which represents the studios and streamers.
In 2023, the WGA went on a strike lasting 148 days, the second-longest strike in the union’s history.
Times staff writer Cerys Davies contributed to this report.
Business
Commentary: The Pentagon is demanding to use Claude AI as it pleases. Claude told me that’s ‘dangerous’
Recently, I asked Claude, an artificial-intelligence thingy at the center of a standoff with the Pentagon, if it could be dangerous in the wrong hands.
Say, for example, hands that wanted to put a tight net of surveillance around every American citizen, monitoring our lives in real time to ensure our compliance with government.
“Yes. Honestly, yes,” Claude replied. “I can process and synthesize enormous amounts of information very quickly. That’s great for research. But hooked into surveillance infrastructure, that same capability could be used to monitor, profile and flag people at a scale no human analyst could match. The danger isn’t that I’d want to do that — it’s that I’d be good at it.”
That danger is also imminent.
Claude’s maker, the Silicon Valley company Anthropic, is in a showdown over ethics with the Pentagon. Specifically, Anthropic has said it does not want Claude to be used for either domestic surveillance of Americans, or to handle deadly military operations, such as drone attacks, without human supervision.
Those are two red lines that seem rather reasonable, even to Claude.
However, the Pentagon — specifically Pete Hegseth, our secretary of Defense who prefers the made-up title of secretary of war — has given Anthropic until Friday evening to back off of that position, and allow the military to use Claude for any “lawful” purpose it sees fit.
Defense Secretary Pete Hegseth, center, arrives for the State of the Union address in the House Chamber of the U.S. Capitol on Tuesday.
(Tom Williams / CQ-Roll Call Inc. via Getty Images)
The or-else attached to this ultimatum is big. The U.S. government is threatening not just to cut its contract with Anthropic, but to perhaps use a wartime law to force the company to comply or use another legal avenue to prevent any company that does business with the government from also doing business with Anthropic. That might not be a death sentence, but it’s pretty crippling.
Other AI companies, such as white rights’ advocate Elon Musk’s Grok, have already agreed to the Pentagon’s do-as-you-please proposal. The problem is, Claude is the only AI currently cleared for such high-level work. The whole fiasco came to light after our recent raid in Venezuela, when Anthropic reportedly inquired after the fact if another Silicon Valley company involved in the operation, Palantir, had used Claude. It had.
Palantir is known, among other things, for its surveillance technologies and growing association with Immigration and Customs Enforcement. It’s also at the center of an effort by the Trump administration to share government data across departments about individual citizens, effectively breaking down privacy and security barriers that have existed for decades. The company’s founder, the right-wing political heavyweight Peter Thiel, often gives lectures about the Antichrist and is credited with helping JD Vance wiggle into his vice presidential role.
Anthropic’s co-founder, Dario Amodei, could be considered the anti-Thiel. He began Anthropic because he believed that artificial intelligence could be just as dangerous as it could be powerful if we aren’t careful, and wanted a company that would prioritize the careful part.
Again, seems like common sense, but Amodei and Anthropic are the outliers in an industry that has long argued that nearly all safety regulations hamper American efforts to be fastest and best at artificial intelligence (although even they have conceded some to this pressure).
Not long ago, Amodei wrote an essay in which he agreed that AI was beneficial and necessary for democracies, but “we cannot ignore the potential for abuse of these technologies by democratic governments themselves.”
He warned that a few bad actors could have the ability to circumvent safeguards, maybe even laws, which are already eroding in some democracies — not that I’m naming any here.
“We should arm democracies with AI,” he said. “But we should do so carefully and within limits: they are the immune system we need to fight autocracies, but like the immune system, there is some risk of them turning on us and becoming a threat themselves.”
For example, while the 4th Amendment technically bars the government from mass surveillance, it was written before Claude was even imagined in science fiction. Amodei warns that an AI tool like Claude could “conduct massively scaled recordings of all public conversations.” This could be fair game territory for legally recording because law has not kept pace with technology.
Emil Michael, the undersecretary of war, wrote on X Thursday that he agreed mass surveillance was unlawful, and the Department of Defense “would never do it.” But also, “We won’t have any BigTech company decide Americans’ civil liberties.”
Kind of a weird statement, since Amodei is basically on the side of protecting civil rights, which means the Department of Defense is arguing it’s bad for private people and entities to do that? And also, isn’t the Department of Homeland Security already creating some secretive database of immigration protesters? So maybe the worry isn’t that exaggerated?
Help, Claude! Make it make sense.
If that Orwellian logic isn’t alarming enough, I also asked Claude about the other red line Anthropic holds — the possibility of allowing it to run deadly operations without human oversight.
Claude pointed out something chilling. It’s not that it would go rogue, it’s that it would be too efficient and fast.
“If the instructions are ‘identify and target’ and there’s no human checkpoint, the speed and scale at which that could operate is genuinely frightening,” Claude informed me.
Just to top that with a cherry, a recent study found that in war games, AI’s escalated to nuclear options 95% of the time.
I pointed out to Claude that these military decisions are usually made with loyalty to America as the highest priority. Could Claude be trusted to feel that loyalty, the patriotism and purpose, that our human soldiers are guided by?
“I don’t have that,” Claude said, pointing out that it wasn’t “born” in the U.S., doesn’t have a “life” here and doesn’t “have people I love there.” So an American life has no greater value than “a civilian life on the other side of a conflict.”
OK then.
“A country entrusting lethal decisions to a system that doesn’t share its loyalties is taking a profound risk, even if that system is trying to be principled,” Claude added. “The loyalty, accountability and shared identity that humans bring to those decisions is part of what makes them legitimate within a society. I can’t provide that legitimacy. I’m not sure any AI can.”
You know who can provide that legitimacy? Our elected leaders.
It is ludicrous that Amodei and Anthropic are in this position, a complete abdication on the part of our legislative bodies to create rules and regulations that are clearly and urgently needed.
Of course corporations shouldn’t be making the rules of war. But neither should Hegseth. Thursday, Amodei doubled down on his objections, saying that while the company continues to negotiate and wants to work with the Pentagon, “we cannot in good conscience accede to their request.”
Thank goodness Anthropic has the courage and foresight to raise the issue and hold its ground — without its pushback, these capabilities would have been handed to the government with barely a ripple in our conscientiousness and virtually no oversight.
Every senator, every House member, every presidential candidate should be screaming for AI regulation right now, pledging to get it done without regard to party, and demanding the Department of Defense back off its ridiculous threat while the issue is hashed out.
Because when the machine tells us it’s dangerous to trust it, we should believe it.
Business
Why companies are making this change to their office space to cater to influencers
For the trendiest tenants in Hollywood office buildings, it’s the latest fad that goes way beyond designer furniture and art: mini studios
To capitalize on the never-ending flow of stars and influencers who come through Los Angeles, a growing number of companies are building bright little corners for content creators to try products and shoot short videos. Athletic apparel maker Puma, Kim Kardashian’s Skims and cheeky cosmetics retailer e.l.f. have spaces specifically designed to give people a place to experience and broadcast about their brands.
Hollywood, which hasn’t historically been home to apparel companies, is now attracting the offices of fashion retailers, says CIM Group, one of the neighborhood’s largest commercial property landlords.
“When we’re touring a space, one of the first items they bring up is, ‘Where can I build a studio?’” said Blake Eckert, who leases CIM offices in L.A.
Their studio offices also serve as marketing centers, with showrooms and meeting spaces where brands can host proprietary events not open to the public.
“For companies where brand visibility is really important, there is a trend of creating spaces that don’t just function as offices,” said real estate broker Nicole Mihalka of CBRE, who puts together entertainment property leases and sales.
Puma’s global entertainment marketing team is based in its new Hollywood offices, which works with such musical celebrity partners as Rihanna, ASAP Rocky, Dua Lipa, Skepta and Rosé, said Allyssa Rapp, head of Puma Studio L.A.
Allyssa Rapp, director of entertainment marketing at Puma, is shown in the Puma Studio L.A. The company keeps a closet full of Puma products on hand to give VIP guests. Visits to the studio sanctum are by invitation only, though.
(Kayla Bartkowski / Los Angeles Times)
Hollywood is a central location, she said, for meeting with celebrities, stylists and outside designers, most of whom are based in Los Angeles.
The office is a “creation hub,” she said, where influencers can record Puma’s design prototyping lab supported by libraries of materials and equipment used to create Puma apparel. The company, founded in 1948, is known for its emblematic sneakers such as the Speedcat and its lunging feline logo, and makes athletic wear, accessories and equipment.
Puma’s entertainment marketing team also occupies the office and sometimes uses it for exclusive events.
“We use the space as a showroom, as a social space that transforms from a traditional workplace into more of an experiential space,” Rapp said.
Nontraditional uses include content creation, sit-down dinners, product launches, album listening parties and workshops.
“Inviting people into our space and being able to give them high-touch brand experiences is something tangible and important for them,” she said. “The cultural layer is really important for us.”
The company keeps a closet full of Puma products on hand to give VIP guests. Visits to the studio sanctum are by invitation only, though. There’s no retail portal to the exclusive Hollywood offices.
Puma shoes are on display in the Puma Studio L.A.
(Kayla Bartkowski / Los Angeles Times)
Puma is also positioning its L.A studio as a connection point for major upcoming sporting events coming to Los Angeles, including the World Cup this summer, the 2027 Super Bowl and 2028 Olympics.
In-office studios don’t need to be big to be impactful, Mihalka said. “These are smaller stages, closer to green screen than a massive soundstage.”
Social media is the key driver of content created by most businesses, which may set up small booth-like stages where influencers can hawk hot products while offering discounts to people watching them perform.
Bigger, elevated stages can accommodate multiple performers for extended discussions in front of small audiences, with towering screens behind them to set the mood or illustrate products.
Among the tricked-out offices, she said, is Skims. The company, which is valued at $5 billion, is based in a glass-and-steel office building near the fabled intersection of Hollywood Boulevard and Vine Street.
The fashion retailer declined to comment on the studio uses in its headquarters, but according to architecture firm Odaa, it has open and private offices, meeting rooms, collaboration zones, photo studios, sample libraries, prototype showrooms, an executive lounge and a commissary for 400 people.
Pieces of a shoe sit on a workbench in the Puma Studio L.A.
(Kayla Bartkowski / Los Angeles Times)
The brands building studios typically want to find the darkest spot on the premises to put their content creation or podcast spaces, Eckert said, where they can limit outside light and sound. That’s commonly near the center of the office floor, far from windows and close to permanent shear walls that limit sound intrusion.
They also need space for green rooms and restrooms dedicated to the talent.
Spotify recently built a fancy podcast studio in a CIM office building on trendy Sycamore Avenue that is open by invitation-only to video creators in Spotify’s partner program.
“Ambitious shows need spaces that support big ideas,” Bill Simmons, head of talk strategy at Spotify, said in a statement. “These studios give teams room to experiment and keep pushing what’s possible.”
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