The sudden assassination attempt on Trump in July prompted Musk, who had previously been unwilling to make political statements, to immediately join the Trump camp and gradually become one of Trump's biggest "goldman sachs".

According to documents released by the Federal Election Commission of the United States in mid-October, Musk has donated over $0.118 billion to the political action committee America PAC, cheering for the Republican presidential candidate Trump. In addition to supporting Trump, Musk has also donated over $0.289 million to Republican congressional campaigns, revealing strong expectations for Republican governance.

This is different from the usual Silicon Valley companies. Although many Silicon Valley companies or institutions have rarely donated to Trump this year, the company's leaders may provide political funding to the Democratic Party in their personal capacity, mastering the essence of "hedging". For example, the venture capital firm Andreessen & Horowitz, which once helped Trump raise funds in Silicon Valley, but in October, the two founders changed their minds one after another, expressing support for the Democratic Party candidate Harris.

There may not be a second in Silicon Valley and Wall Street as high-profile and wholeheartedly devoted to Trump as Musk. Although Musk has repeatedly emphasized that supporting Trump is his "conscientious choice" as an American citizen, the alliance between the two big businessmen has never been so simple.

According to industry professionals, Musk's investment of over $0.1 billion in Trump could potentially yield returns of at least several billion dollars.

Income tax

According to tax and ethics experts, if Musk, as previously stated by Trump, takes on a senior advisory position in the new government, Musk may benefit from a hidden clause in U.S. tax law, potentially securing significant tax breaks for himself.

35 years ago, a new provision was added to the US tax law. Originally stipulating that senior federal government officials cannot personally or substantially participate in economic affairs conflicting with their work, the supplemental provision allows government officials to indefinitely defer the payment of capital gains tax resulting from such conflicts withdrawals.

In the case of Musk, if he ends up getting financial advice from Trump or other public positions, then he is likely to need to sell his stake in $Tesla (TSLA.US)$, X, and other companies he may be involved in without having to pay relevant taxes.

Previously, the Secretary of the Treasury under the George W. Bush administration, Henry Paulson, enjoyed this tax benefit. At that time, he withdrew nearly 0.5 billion US dollars from Goldman Sachs without needing to pay capital gains tax. According to experts, Musk could benefit from at least several billion dollars in tax breaks through this provision.

However, Musk himself may not place much value on this part of the tax benefits. In fact, he cannot completely divest his holdings in any of his companies even if he needs money, as he can borrow against the stocks. Additionally, he can offset this tax payment by declaring other investment failures (like acquiring Twitter and sustaining losses).

Yet, Trump's 'sweet deal' is not limited to just this. Trump also has a large-scale tax reduction policy, the benefits of which can significantly increase Musk's personal wealth, as well as provide greater freedom for his companies. This is evidently more appealing to Musk compared to the Democrats' large-scale tax increase policy.

SpaceX

At the beginning of Musk's switch from Trump, the market was perplexed as to why the owner of an electric car company would support a presidential candidate who aimed to revive gasoline vehicles. When pondering this question, one might need to understand that Musk is not just the CEO of Tesla.

Companies currently held or owned by Musk primarily include electric car company Tesla, rocket launch company SpaceX, brain-machine company Neuralink, social platform X, and ai startup company xAI.

According to publicly available market cap rankings, the listed Tesla currently has a market cap of around $807 billion, followed by SpaceX at $210 billion in second place, followed by the popular AI with a latest estimated market cap of around $40 billion. Next are X ($9.4 billion), Neuralink ($6.6 billion), and The Boring Company, the underground tunnel company ($5.6 billion).

Among them, due to its unique industry advantages and the strength of the company itself, SpaceX is regarded as the most promising among American private companies, and is seen as a rising star with the potential to surpass Tesla's future market cap. However, despite being such a star of tomorrow, it has frequently complained of unfair treatment during the Biden administration.

In recent months, the Federal Aviation Administration in the USA has tightened its scrutiny of SpaceX, and in September proposed a civil penalty of 0.633 million dollars against SpaceX. Musk himself vented on Twitter, stating that SpaceX is not only being fined by the government for trivial matters like wiping competitors' backsides.$Boeing (BA.US)$but also for trivial matters by the government, making him unable to swallow this anger.

Interestingly, since Biden took office as President in 2021, SpaceX has been increasing its spending on political lobbying year after year, spending nearly $1.4 million more than during the Trump era. Spending heavily but getting such results obviously deeply annoys Musk towards the Biden administration.

Minefield

Digging deeper, the Biden administration has been dedicated to fighting monopolies, and SpaceX's current position in the industry has already raised concerns among the Democratic Party. If Harris becomes the President of the USA, then the lucrative billions in government contracts for SpaceX could be in danger.

Musk has also spoken about the connection between SpaceX and the elections, stating that voting for Trump is voting for Mars, and that if the excessive government control in the USA is not stopped, the Earth will never evolve into a multi-planetary civilization, with Martian migration always being SpaceX's founding goal.

SpaceX is not the only one facing this issue, Musk's other company X is also coldly treated by Democratic Party politicians. Previously, when Meta launched its Threads competitor, prominent Democratic Party figures like Biden and Harris quickly embraced it, which was an obvious move by the party to weaken X's (formerly Twitter) influence.

At the same time, Musk's recent new investment in xAI is also one of the important reasons for his tilt towards Trump. Under Biden's administration, artificial intelligence in the usa suddenly erupted, influencing the entire American market, but the Democratic government has been hesitant to strictly regulate the industry to avoid disasters. In the eyes of many industry insiders, the Biden administration is somewhat blame-seeking, and the more intervention, the more likely it is to stifle industry vitality.

From these perspectives, the Biden administration almost accurately hit the minefield of many of Musk's companies, but the businessman-turned Trump would not have this problem.

These business considerations destined Musk to surrender to Trump this year, but Musk himself seems to show increasingly fanatical signs from simple donations to later campaigning.

Compared to predicting the ROI of the market if Trump wins, Musk's bet is larger, riskier, and with higher ROI. If Trump wins, the 'gambler' Musk will receive at least tens of times the current donation amount in return, along with countless potential benefits.

Editor/Rocky