Why is Elon Musk becoming Donald Trump’s efficiency tsar?

Billionaire Elon Musk has been tasked with leading incoming President Donald Trump’s new Department of Government Efficiency (Doge).

In a statement on social media, the US president-elect said Musk – along with former Republican presidential candidate Vivek Ramaswamy – would “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies”.

It is a role that the tech entrepreneur has arguably prepared for through his business leadership, and one he has spent months arguing for.

But it is also one that is expected to garner him influence over government policy – and the regulatory environment his enterprises exist in.

Musk told a Trump rally in October that he believed the US government’s budget could be cut by “at least” $2tn from around $6.5tn. He has also frequently suggested the number of government employees could be significantly reduced.

Ramaswamy, meanwhile, has put forward plans to scrap a number of federal departments including the Department of Education, the Nuclear Regulatory Commission, the Internal Revenue Service and the FBI.

The way Musk has run his own firms may hint at what Americans can expect he will do at Doge.

In October 2022, Musk took over social media platform Twitter – which he rebranded as X – in a $44bn (£38.1bn) deal, so he could remove its policies of moderating content and banning users who had deemed to have violated its rules on hate speech and disinformation.

Among the users he reinstated was Trump, who had been banned following the Capitol riot in January 2021 after continuing to claim the 2020 election had been rigged against him.

Musk’s takeover saw radical changes to the company.

He reduced X’s workforce from around 8,000 to 1,500. In April 2023, he told the BBC that his reasoning for doing so was that “if the whole ship sinks, then nobody’s got a job”.

“His idea of efficiency was to let a lot of people go,” says Alex Waddan, a professor of US politics at the University of Leicester.

Facing an exodus of advertisers over his relaxation of the platform’s speech policies, the entrepreneur also monetised elements of the site to raise revenue.

He turned blue ticks – which previously denoted that a high-profile account was bona fide – into a subscription model, and tied advertising payments to “verified” users to the number of interactions they receive.

But these changes had some unintended consequences.

Following outcry, X gave gold or silver ticks to brands and official accounts to avoid them being confused with fakes – effectively meaning blue ticks only signify that an account is paid-for.

Incentivising users with a share of advertising revenues also gave an avenue for so-called bot farms to make money by posting auto-generated content to gain more interactions. Musk has said his team has repeatedly purged bot accounts.

Critics argue his changes have given prominence to hate-speech and misinformation – though he has argued the site is politically neutral.

“As a serial entrepreneur, Musk has been relentless in trying to improve institutional efficiency at his own enterprises,” says Thomas Gift, a political science professor and director of the Centre on US Politics at University College London.

He adds that though Musk’s primary role will be “slashing through the thicket of red tape that is the US federal government”, his position will also give him influence in the new administration.

“While his role in the Department of Government Efficiency will be a more informal one, there’s no doubt that he’s got Trump ear – at least for the moment.”

Musk’s calls for a Doge are themselves a reference to a meme featuring a Shiba Inu dog, which then gave its name to the cryptocurrency Dogecoin. Both have been frequently referred to by him online.

Christopher Phelps, a professor of modern US political history, says the name is “a nod to crypto deregulation being part of what they’ll do”. Crypto prices rose after Trump’s election and signals the incoming president would offer a relaxed regulatory environment.

But Musk’s calls may also come in part from frustrations he has had with his other business ventures: electric vehicle company Tesla and rocket firm SpaceX.

Tesla has repeatedly been accused by the US government of trying to prevent its workers unionising – which in some cases can be against federal law.

Musk – who has an estimated net worth of $290bn (£228bn) – has previously said he is “not against all unions”, but that the auto workers’ union “has a track record of destroying productivity so a company can’t compete”.

In September Musk threatened to sue the Federal Aviation Administration over its plans to fine his SpaceX company $633,000 for alleged license infringements related to some of its rocket launches from Cape Canaveral in Florida. He accused the agency of “regulatory overreach”.

He has also repeatedly said he wants to colonise Mars, and SpaceX’s Starship programme is an attempt to make that possible.

But in September, he wrote that this was only a possibility “so long as it is not smothered by bureaucracy” and claimed Doge was “the only path to extending life beyond Earth”.

So is part of his motivation for taking on the role his various US-based business interests?

Musk “stands to benefit personally from a lot of the deregulation that he touts,” says Prof Phelps, adding: “I think putting someone who is a billionaire and runs major corporations in charge of a federal project of deregulation is innately full of conflicts of interest.”

“There’s no doubt that Musk has significant vested interests in the US regulatory landscape as a result of his many business enterprises,” says Prof Gift.

“At the same time, it’s hard to make the case that this is the only impetus driving him.

“Musk has undertaken huge personal and political risks in coming out for Trump, and many of his activities and rhetoric seem to reflect an individual ideologically committed to causes he believes in.”

Prof Waddan agrees: “Clearly he has got skin in the game and there’s a self-interest, but equally you can have a sincere belief that there is too much government regulation and too much government bureaucracy.”

Musk donated a reported $200m (£157m) to Trump’s 2024 presidential campaign, and appeared to speak at several of his rallies.

Prof Phelps describes his relationship with Trump as “transactional”, adding that the Doge role “gives him a lot of symbolic clout – and possibly the clout to get the things that matter most to him done”.

As the South African-born billionaire is not a US citizen by birth, he cannot become president – something that has frustrated other famous faces who became involved in politics in the past.

But Musk can have an influence on US policy, and Trump will have a sympathetic adviser to call upon.

“Trump is looking to surround himself with loyalists in his new administration, and there’s no one who’s been more loyal than Musk since he announced his endorsement for Trump,” says Prof Gift.

“Not only did Musk go ‘all in’ in supporting Trump personally and financially during the campaign, but he’s also evolved into a trusted adviser on topics as diverse as technology policy to the war in Ukraine.”

In an early sign of the influence the tech entrepreneur may be rewarded with for his loyalty, Musk was party to a call between Trump and Ukrainian President Volodymyr Zelensky following the election. The war in Ukraine will be a major foreign policy concern when Trump takes office.

“That is actually quite extraordinary,” says Prof Waddan. “Normally, even your biggest donors wouldn’t get that kind of access.”