Billionaire Elon Musk has been tapped by Donald Trump to lead the new Department of Government Efficiency (Doge).

In an announcement on social media, the US president-elect said that Musk, along with former Republican presidential candidate Vivek Ramaswamy, “will eliminate government red tape, reduce regulations, cut spending and restructure federal services”.

It is a role for which the tech entrepreneur is undoubtedly experienced due to his business activities, while he has repeatedly advocated for specific government initiatives, as reported by the BBC.

However, the role is also expected to increase its influence on government policy and access to the regulatory rules governing its businesses.

Musk told a Trump rally in October that he estimated the U.S. government budget could be cut by “at least” $2 trillion, while repeatedly repeating that the number of government employees would also need to shrink significantly.

On the other hand, Ramaswamy has proposed plans to abolish certain federal agencies, such as the Department of Education, the Nuclear Regulatory Commission, the Internal Revenue Service and the FBI.

From Twitter to the new X

The way Musk runs his own companies can be an example of what Americans can expect him to do.

In October 2022, Musk took over social media platform Twitter — which he renamed X — in a $44 billion deal to “restore its content moderation policies and ban users who had violated its rules through hate speech and of disinformation”.

Among the users it reinstated was Trump, who had been banned following the January 2021 Capitol Hill riot after he continued to allege fraud in the 2020 election.

The acquisition by Musk brought radical changes to the company.

It reduced X’s workforce from about 8,000 to 1,500. In April 2023, he told the BBC that his reasoning was that “if the whole ship goes down, then nobody will have a job”.

After many advertisers dropped out due to the loosening of speech policies, the entrepreneur also used website apps to boost revenue.

X started issuing verification badges only to those who paid the original price of $8 (€7.38) per month, so it removed verification badges from many celebrities and other prominent accounts.

But these changes had some unintended consequences.

After the outcry, X issued gold or silver ticks to branded and official accounts to prevent them from being confused with fakes.

Incentivizing users with a share of advertising revenue also enabled so-called bots to earn money by posting automatically generated content to get more interactions. Musk said his team has repeatedly cleared bot accounts.

Critics argue that his changes have emphasized hate speech and misinformation – although he has maintained that the site is politically neutral.

“As an entrepreneur, Musk has sought to improve efficiency in his own businesses,” says Thomas Gift, professor of political science and director of the Center for US Politics at University College London.

He adds that while Musk’s primary role will be to “reduce bureaucracy in the US federal government,” his position will also give him influence over the new administration.

“While his role at the Department of Government Efficiency will be more informal, there is no doubt that he has Trump’s support — at least for now.”

His business involvement

The Government Efficiency agency’s acronym, Doge, is a reference to a meme coin that gave its name to the Dogecoin cryptocurrency.

Christopher Phelps, a professor of modern US political history, says the name is “a nod to the deregulation of cryptocurrencies which is part of what they’re going to do.” Cryptocurrency prices rose after Trump’s election as the new president is expected to offer a relaxed regulatory environment.

But Musk’s positions may also be due in part to obstacles he’d like to clear in his other business ventures: electric vehicle company Tesla and rocket company SpaceX.

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

Musk, whose fortune is estimated at $290 billion, has said he is “not against all unions” but that the auto workers’ union has “destroyed companies’ productivity and by extension their ability to compete.” .

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

He has also repeatedly said that SpaceX’s Starship program aims to colonize Mars.

However, in September, he wrote that this was only possible “as long as red tape doesn’t get in the way” and claimed that the Efficiency Agency is “the only way to extend life beyond Earth”.

The question is, is his various US-based business interests ultimately his motivation?

Musk “will personally benefit from the deregulation he’s touting,” Professor Phelps says, adding: “I think putting someone who’s a billionaire and runs big companies at the head of a federal deregulation plan is inherently controversial.”

“There is no question that Musk has significant interests in the US regulatory landscape as a result of his many business activities,” says Professor Gift.

“At the same time, it’s hard to argue that this is the only motivation driving him.

“Musk has taken enormous personal and political risks for Trump, and many of his actions and rhetoric seem to reflect a person ideologically committed to the causes he believes in.”

Professor Vandan agrees: “He’s clearly caught up in the game and there’s self-interest, but equally he might think there’s too much government regulation and too much government bureaucracy.”

Loyalty to Trump

Musk donated $200 million to Trump’s 2024 presidential campaign and spoke at many of his rallies.

Professor Phelps describes his relationship with Trump as “transactional”, adding that his role at the Efficiency Agency “gives him a lot of symbolic influence – and probably the power to do the things that matter most to him”.

As the South African-born billionaire is not a natural-born US citizen, he cannot become president.

But Musk may be influential in US politics, and Trump will have a dedicated adviser.

“Trump wants to include dedicated partners in his new administration, and there is no one who has been more loyal than Musk since announcing his support for Trump,” says Professor Gift.

“Not only did Musk support Trump personally and financially during the campaign, but he has also become a trusted adviser on issues as diverse as technology policy to the war in Ukraine.”

In an early sign of payback, Musk sat in on a call between Trump and Ukrainian President Volodymyr Zelensky after the election. The war in Ukraine will be a major foreign policy concern when Trump takes office.

“This is actually very unusual,” says Professor Vandan. “Normally, even your biggest donors wouldn’t have that kind of access.”