Michael Moritz: Musk vs Trump is a cautionary tale for Silicon Valley

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The writer is a longtime Silicon Valley investor, former board member of PayPal and an investor in SpaceX

One man approaches government like a company. The other considers government his company. Anyone who has worked in Silicon Valley knows which to choose. For results, modern management beats medieval rule.

The eruption between Elon Musk and Donald Trump has reverberated around the world. It must be mortifying for those in Silicon Valley who threw their support behind the president thinking he would shrink the federal government. With Musk’s departure, any hope of a disciplined approach to the US government and budget goes as well. Musk is right; the Trump budget is an abomination.

I feel more than a tinge of sympathy for Musk. Unlike others, I don’t believe he threw himself into this battle for personal gain or to wangle deals for his companies. He, like many, was disenchanted with a Democratic party that had lost its moorings, mismanaged California and whose leader, Joe Biden, let vanity conquer virtue. Sadly, he misjudged the character of the man with whom he threw in his lot.

Musk knows what it takes to manage a sprawling empire with a minimum of waste. Despite his extracurricular activities, procreative fixation and splenetic outbursts, he is the most accomplished business builder of his generation. He single-handedly paved the path for the global electrification of automobiles and with SpaceX (and its offspring, Starlink) has put Nasa in the shade, while also promising to change the way we communicate.

But the government is not a company and Musk — although correct in his assessment of the overweening federal bureaucracy, the stifling regulatory climate and the precarious state of the US balance sheet — failed to understand that Trump was more interested in the daily news cycle than in reform. Musk is the revolutionary, the president the monarch.

Musk also underestimated the way in which Trump’s cabinet and advisers, and all the targets in his crosshairs, were determined to fight him. He was the outsider. They were the occupants of the swamp.

By comparison, Trump has none of Musk’s business acumen or his attention span. Since the inauguration, he has run the government just like he operated his own business, raising mountains of debt and betraying employees, while escaping unscathed himself.

While Musk launched a headlong assault on government, Trump has busied himself with high-minded duties such as the takeover of the Kennedy Center, attempting to fire the head of the National Portrait Gallery, renaming military bases and ships, hollowing out government libraries, planning his birthday parade and, most importantly, securing himself an aeroplane fit for a pasha.

What is the result of this meeting of company builder and medieval monarch? It’s the opposite of what was promised: a US budget that has ballooned, debt levels that will only rise and crushing interest payments that make the country vulnerable to its largest creditors — Japan and China.

Unfortunately, the minimal cuts that Doge did make — such as to foreign aid and Voice of America, have only served to weaken US standing around the world. And at home, thanks to Trump’s infatuation with tariffs, no business in America can plan beyond lunchtime.

Then there is the fusillade of Sharpie decrees that, left unchecked, will strengthen China and weaken Silicon Valley — contempt for scientific rigour, cutbacks in research and development funding, cancellation of university contracts, clampdowns on visas for the brightest overseas students. These were the pillars of Musk’s own monumental successes and amount to the hollowing out of America’s future.

While Musk has left Washington with his reputation tarnished and his businesses impaired, the president’s family has inked deals for new hotels and golf courses around the world. Membership fees at Mar-a-Lago, his Floridian sanctuary, ballooned last year. And he is milking the enthusiasm of his supporters with his own controversial memecoin, launched days before his inauguration.

One word of advice for those in Silicon Valley who followed Musk’s lead and sided with Trump. Leave. Don’t delude yourself that you are working to make crypto a part of global finance, minimising artificial intelligence regulation, helping start-up companies or protecting the interests of Silicon Valley. You have no sway. You are just cannon fodder.