Forget Brad and Angelina, Ben and Jenn, The Beatles, Brexit, or even Henry VIII and his wives. This is the biggest split in recent history. Donald Trump and Elon Musk have officially ended their bromance, and it looks like it will spell trouble for the house of government-subsidized cards that make up Elon’s business empire.
In a post on his Truth Social network Thursday afternoon, Trump said his administration could end the government contracts that are keeping Musk’s SpaceX alive.“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump wrote.
Then he added that Musk “just went CRAZY” when Trump ordered the Feds to end the EV subsidies that were generating much of Tesla’s profits (see below). Musk was quick to fire back, hitting at what could be a major sore spot for the president: “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!”
It all started with Musk’s Tuesday tweet that called Trump’s “One Big Beautiful Bill” a fiscal disaster. “I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk wrote. The next day the nonpartisan Congressional Budget Office said the bill would add at least $2.7 trillion to the existing $36 trillion national debt over the next decade.
In the past 20 years, Musk’s companies have received more than $38 billion from the federal and local governments, the Washington Post reported, two-thirds of that in the past five years. Last year, Musk’s companies got $6.3 billion and they were expecting even more this year.
Besides EV subsidies, the money goes to SpaceX’s rocket programs, which also send and recover astronauts from the International Space Station, and launch Starlink satellites, which are used by the U.S. military, as well as by civilians.Musk has already shown with DOGE what he can do to Trump’s enemies. But what can he do to Trump’s friends? And what about his frenemies? And what about his enemies who once were his friends?
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Palantir: The big brother company surveilling you
Who says the government shouldn’t track your IRS and social security data through a contract with a for-profit company founded by one of Elon Musk’s best buddies?
Oh, that’s right! George Orwell intoned it was probably not ideal in his dystopic anti-Communist novel, “1984.” Since then, of course, Apple used Orwell’s novel title to sell computers in a commercial directed by Ridley Scott, and it turns out the people keenest on tracking every detail of your private life are now on the other end of the political spectrum from Big Brother. That’s right: The right wingers are now the ones making billions of dollars out of doing it.
As The New York Times points out, this story raises the question of whether President Donald Trump “might compile a master list of personal information on Americans that could give him untold surveillance power.” Big Brother would be proud as the company, called Palantir, has been quietly winning business from the Trump Administration to gather and assemble data on nearly every American, with the contracts totaling more than $1.1 billion since Trump took office. That’s what The New York Times found after digging through government contracting data. It includes a $795 million order from the Department of Defense.After a slight blip when its first quarter results failed to meet analysts’ expectations, Palantir stock has been rising fast — up 70% this year.
Powering the sales is a product called Foundry that’s already been adopted by Homeland Security to track immigrants, and by Robert F. Kennedy, Jr.’s Department of Health and Human Services.Foundry is now looking at sucking up data from the IRS and Social Security, leaving even Palantir employees nervous.
Another key element in its success: Co-founder Peter Thiel’s close relationship with Donald Trump, who has donated tens of millions of dollars to Republican candidates. Thiel also bankrolled wrestler Hulk Hogan’s lawsuit against New York gossip website Gawker which ultimately shut the website down forever. Ironically the main issue at hand in that case was whether Gawker had…infringed on Hulk Hogan’s privacy.
“The relationships that Palantir’s founders...have with senior members of the Trump administration are helpful for business,” one analyst told Reuters. Goes to show it’s not what you know, but who you know, as well as what you know about everyone without their consent.
The Palantir involvement also began with Elon Musk’s disgraced DOGE operation putting Palantir forward, before Musk left his government role last week, turning on Trump and calling his budget bill “an abomination.”
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The Usual Suspects
- Apple gets bit by tariffs: Chalk up another one for tariff turmoil. Donald Trump’s effort to get Apple to build its iPhone in America is making progress, of sorts. The tariff uncertainty has pushed research firm Counterpoint Research to revise its 2025 global smartphone shipment growth forecast to 1.9% year-on-year from 4.2%, citing “renewed uncertainties surrounding U.S. tariffs.” Apple shipments are expected to grow 2.5% year-on-year in 2025, down from a previous forecast of 4%. Samsung will also see its growth slowed by tariffs. Who wins? China’s Huawei, with shipments expected to grow at 11% for 2025.
- Google wonders: WWAMD? After arguments on how best to enforce the Federal government’s victory over Google for illegally protecting its near monopoly in online search, Amit Mehta, the federal judge overseeing the case, has a dilemma: Should he force Google to share its search engine results and advertising data with rivals? Google collects nine times as much data as all its rivals combined, which creates a real barrier to competition. But now that AI is taking a chunk out of Google’s search revenue (it hasn’t yet said how big a chunk), that’s also weighing on Mehta. No word yet on when he will issue his order but expect pushback and lengthy appeals from Google.
- Zas enough: Warner Bros Discovery shareholders said “no way” to failing CEO David Zaslav, with 59% of those who voted vetoing a pay package for senior execs that included $51.9 million for the chief (80% of WBD shareholders cast ballots on the pay question). The vote is not legally binding, but it was a severe rebuke to Zaslav and his leadership team. Since Warner Media merged with Zaslav’s Discovery Communications in April 2022, shares are down about 60%, and S&P downgraded WBD’s debt to junk status, citing its money-losing cable-network business.
- Doomed to unionize: Videogame engineers who create the game Doom, for Microsoft-owned ZeniMax, have agreed on their first union contract with the tech giant. They’ll get a 13.5% wage hike and some job security. Game designers and coders have been angling to unionize for years, especially quality-control workers who work long hours testing games for bugs. No word on whether game players will now be able to unionize.
- Car talk: China’s decision in April to halt the export of rare earth metals like dysprosium and terbium has some U.S. car and parts makers thinking of opening factories in China. The Chinese decision, part of the spat over Trump tariffs, means car production could soon screech to a halt, as the rare earths prevent overheating in magnets used in electric motors that power everything from seats to brakes and fuel injectors. The Wall Street Journal reports that several carmakers and parts suppliers are examining moving some parts making to China to avoid factory shutdowns in the U.S. if there’s a motor shortage. China’s restrictions cover only the magnets, not the finished parts, so some ideas being considered include building electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Not exactly a U.S. manufacturing revival. Meanwhile, Tesla sales in Europe are in free fall, nosediving 49% year on year, with only 7,261 cars sold in Europe in April, even as overall battery electric car sales rose 34.1%, said the European Automobile Manufacturers’ Association.
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Elon’s World
- A week after appearing in the Oval Office with a black eye (he claimed his five-year-old son, X, hit him, but Steve Bannon suggested it might have been 63-year-old Treasury Secretary Scott Bessent), and announcing that he was leaving Washington to salvage the remains of Tesla (Up 45% since late Apriil, but still down 20% since Trump took office), Musk savaged the “One Big Beautiful Bill” with a blast on X. “I’m sorry but I just can’t stand it anymore,” Musk tweeted. “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.”
- Is he upset because his DOGE project failed to deliver even 1 percent of his promised trillions of dollars in savings? Is he angry that Trump has effectively called off their bromance? Or is it all about the money? Tesla’s sales are in the dumps, the re-jigged Model Y is not going to pump sales, and the new tax bill takes aim at Tesla’s biggest source of profits: selling clean energy credits to other carmakers. Tesla’s carbon credit revenue for 2024 rose 54% from 2023 to $2.76 billion. Tesla’s net profit dropped 23% from 2023 to $8.4 billion.
- Who Benefits? A report on DOGE from Sen. Elizabeth Warren, the Massachusetts Democrat, noted more than 100 instances of Musk taking advantage of his position wielding the DOGE chainsaw to win government contracts. “Musk and individuals acting on his behalf have been involved in dozens of questionable actions that raise questions about corruption, ethics and conflicts of interest,” says the report, entitled “Special Interests Over the Public Interest.”
Trumplandia
- Jamie Dimon and the debt crisis: That One Big Beautiful Bill Act could be the end of U.S. economic power unless the U.S. takes steps to address its spiraling national debt. “You are going to see a crack in the bond market, OK?” JP Morgan Chase CEO Jamie Dimon said last week. “It is going to happen.” Bond markets have been spooked by the prospect of the bill passing, leading to a selloff in benchmark 10-year Treasuries that sent yields up nearly a 0.25% to 4.418% this month. Moody’s stripped the U.S. of its triple-A credit rating, citing the government’s debt pile. Now the nonpartisan Congressional Budget Office has weighed in, noting the bill would add $2.4 trillion to the national debt and strip health care from 10.9 million more people by 2034. And it gets worse: If interest rates stay at their current rate, the bill would add $5 trillion to the existing $36 trillion debt. One major problem is that the bill cuts taxes ($3.7 trillion) by three times as much as it cuts spending ($1.2 trillion), just as tariffs are pushing up inflation and interest rates, making it more expensive to pay down the debt and leaving bondholders with dollars’ worth less than they had paid for them. On Wednesday, Dimon’s warnings got a boost from GOP Sen. Ron Johnson of Wisconsin, who said he’ll vote against the bill unless it cuts the debt. “This is immoral, what us old farts (are) doing to our young people,” Johnson said on CNBC.
- About those trade deals… The U.S. has still failed to reach a permanent trade deal with China, and Donald Trump thinks he may know why. Chinese president Xi Jun ping is “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!,” Trump wrote on in a 2 a.m. tweet on Truth Social on Wednesday. Key sticking points: U.S. restrictions on advanced technology for China and Trump’s decision to revoke visas for Chinese students. The U.S. is angered by China’s recent restrictions on rare earths, which may prompt U.S. automakers to open operations in China just to get at the desperately needed minerals. Meanwhile, Trump also decided this week to block the export of some U.S. aerospace tech that is helping China build its first modern commercial jetliner, the C919. When planning began in 2008, U.S. firms rushed to sell avionics, engines, and other resources. But now the U.S. sees China as a rival, not a market for its own wares, and China is calling the plane one of the “pillars of a great power.” Some 40% of the plane is made by U.S. and other Western companies.
- Friends in high places: CZ Zhao, the Binance founder who spent four months in a U.S. prison on a federal money-laundering conviction, just got a break from the Securities and Exchange Commission: The enforcers have dropped a lawsuit against Zhao and Binance for allegedly lying to regulators about its operations in the United States and mishandling customer money. Coincidentally in May, Trump’s family business, World Liberty Financial, said it was facilitating a $2 billion deal between Binance and an Abu Dhabi-backed investment fund.
The Short Stack
- The Joke’s on you: Byron Allen, the former comedian turned broadcast mogul and Weather Channel owner, is selling his 28 broadcast TV stations, which run across all four major networks, after failing to meet their debt payments on time. Allen made a $30 billion bid for Paramount $PARA last year and offered Disney $10 billion for ABC and other properties. The sale price has not been disclosed.
- Reddit blasts Anthropic: Endless rabbit hole platform Reddit has sued AI firm Anthropic, saying the bot maker continued to use its data even after the two failed to reach an agreement on data sharing. Reddit licenses your conversations to other AI firms to train bots, but it wants Anthropic, which calls itself the home of ethical AI, to stop. It cited an article that Anthropic engineers wrote on using Reddit to train AI models. Anthropic’s own “Constitution” tells its chatbot to choose the response that most respects property rights.
- Put that back: A nationwide police action targeting organized shoplifting gangs snared hundreds of alleged criminals in raids across 28 states last week. The blitz, led by Illinois’ Cook County regional organized crime task force, involved more than 100 jurisdictions and over 30 retailers including Home Depot, Macy’s, Target, Walgreens, and Kroger. Hard numbers on the scope of shoplifting are hard to come by, but the National Federation of Retailers says its members report shoplifting incidents were up 93% from 2019 to 2023.
- Painful labor: The employment market is weakening, according to payroll data from ADP: Private sector job creation nearly stopped in May, growing just 37,000, well below a Dow Jones forecast of 110,000. Trump found a target to blame for the poor showing: Fed Chair Jerome Powell. “‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Trump wrote on Truth Social.* Buy now, pay…never? In a sign that economic gloom is increasing, defaults on lay-away plans are rising. Klarna , a leading buy-now, pay-later company, reported a 17% jump in defaults, losing $99 million across 99 million customers in the first quarter (that’s a massive jump from its $30 million loss a year earlier).
- Sick of that Peloton? Remember that pandemic-era Peloton ad with the lead actor who thought they’d never be fit enough for their partner? Well, if your Peloton isn’t bringing you the results you want, you can now sell it back to the company! Not for a profit, of course, but they’ll rehab it and resell it. Sellers will get 70% of the resale price, and a discount on the very thing they were trying to get rid of: another Peloton.
Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
