The president previously suggested cutting Elon’s subsidies to save “billions,” then reversed course.
Donald Trump made it clear on Thursday that he won’t be pulling the plug on federal subsidies going to Elon Musk, even as tensions between the two remain high.
Writing on Truth Social, Trump denied rumors that he plans to take action against the tech billionaire, despite their fallout.
“I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before,” he wrote. “The better they do, the better the USA does, and that’s good for all of us.”
This statement followed weeks of speculation over whether POTUS would shut down Elon’s government cash flow, a question that had been swirling since earlier posts hinted otherwise.
Just last month, his newest venture xAI was awarded a $200 million contract with the Department of Defense, pushing the company deeper into federal dealings at a time when the political climate couldn’t be more unstable.
The deal aims to expand the Pentagon’s artificial intelligence systems. This came right in the middle of a messy back-and-forth between Elon and Trump, which escalated after Elon publicly trashed one of the president’s cornerstone legislative pushes, the One Big Beautiful Bill, calling it a “disgusting abomination.”
Trump hinted at pulling funding, then changed direction
Despite Thursday’s denial, Trump had previously floated the idea of cutting Elon’s funding entirely. In a Truth Social post from June, he wrote, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.”
He went further, saying Elon may be receiving more subsidy money than anyone else “in history” and claimed that without the government’s support, “Elon would probably have to close up shop and head back home to South Africa.”
Trump added, “No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE,” before suggesting, “Perhaps we should have DOGE take a good, hard, look at this?”
That post came after Elon attempted to apologize for slamming Trump’s bill, admitting he “went too far.” Trump responded by saying he had “no hard feelings,” but that didn’t stop him from continuing to go after Elon in the following days.
The two, once close during the early days of Trump’s administration, are now stuck in a messy power game with billions in federal funding caught in the middle.
White House says Trump isn’t fully backing Elon’s AI projects
On Wednesday, White House press secretary Karoline Leavitt added more fuel to the fire when she was asked whether Trump supports federal agencies working with Elon’s artificial intelligence company.
“I don’t think so, no,” Leavitt replied. She then added, “I’ll talk to him about it, yes,” when a reporter asked if Trump would want the Department of Justice to cancel any deal involving Grok, xAI’s AI chatbot.
That response raised eyebrows, especially as Grok’s role inside the DOJ remains unclear. There’s been no confirmation of an active DOJ contract with the chatbot, but the idea of canceling a deal suggests Elon’s standing in the White House is still shaky.
In addition to Tesla and SpaceX, Elon’s Starlink has deals across defense and civilian infrastructure, and now xAI is positioning itself alongside other major AI firms including Google, OpenAI, and Anthropic, all of which also signed $200 million contracts with the Pentagon. But so far, none of them have been publicly targeted by Trump.
Elon’s decision to attack Trump’s legislative agenda might be coming back to haunt him. While the apology may have bought him some time, it’s clear that the White House isn’t on solid ground about Elon’s future in federal tech partnerships.
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