Of the deluge of more than 200 tweets sent by Elon Musk in the last 12 days fulminating against the British Government, among the most worrisome for Number 10 had nothing to do with grooming gangs, the nature of free speech or the incarceration of Tommy Robinson.
Shortly after 5pm on 29 December, the world’s wealthiest man settled his crosshairs on the UK economy and let it be known that, as far as he was concerned, it is unlikely that much or any more of his estimated £356bn fortune will be vested in GB Plc any time soon.
“Very few companies will be willing to invest in the UK with the current administration,” he said, responding to requests from Scottish government figures for his Tesla electric vehicle company to invest north of the border in a new battery “gigafactory”.
Downing Street, which had in previous months tended to adopt a more muted response to Musk’s transatlantic jibes, decided it was not in the mood to take this accusation lying down.
Prime Minister Keir Starmer’s official spokesperson pointed to an influx of £63bn in inward investment since Labour took power and a 4.5 per cent increase in business investment in the third quarter of 2024 compared to the previous year. The spokesperson added that ministers were taking an “unashamedly pro-business and pro-growth approach”.
The chest-beating nature of the barney between Musk and Starmer has since dramatically intensified, with the billionaire launching daily salvoes of tweets – seizing the news agenda despite complaints of dubious accuracy – from his X social media platform. For his part, the PM this week sent a broadside back across the Atlantic, accusing those responsible for “spreading lies and disinformation” of not being interested in the victims of grooming gangs. “They are in it for themselves,” Starmer said.
But while the row thunders on, the tricky question remains for the Government and British business of how to deal with the digital scorn of a man who – in the words of one senior executive with a City firm this week – “has a knack for making the investment weather wherever his gaze lands”.
And crucially, Musk at the same time unquestionably has the ear of tariff-loving Donald Trump after spending large amounts of time in the president-elect’s Mar-a-Lago luxury resort in Florida in recent weeks.
A leading expert told The i Paper that it is Musk’s influence with the man to be sworn in as the 47th US president on 20 January and the billionaire’s potential to sway Washington’s trade and foreign policy, rather than his direct economic input into the UK, that is likely to prove the UK government’s biggest headache when it comes to Trump’s self-declared “First Buddy”.
When Trump was this week invited to criticise Musk’s new-found penchant for bearding European leaders, the president-elect pointedly declined to do so, saying: “I can say Elon’s doing a good job. Very smart guy.”
As the executive, who asked not to be named, put it to The i Paper: “No-one in business has the power to single-handedly shape a major economy like Britain or even the US, but Elon is probably as close as we have ever come to it. On that basis alone we should think carefully before making an enemy of him.”
To what extent, therefore, can Britain afford to lose or alienate Musk as an economic player?
The South African-born super-magnate is without doubt a man of rare, if mercurial, business acumen – and diverse interests.
It emerged recently that he is currently ranked as one of the world’s best players of a popular online “dungeon” game, Diablo IV, which involves using an adopted persona to fight their way through an array of diabolical monsters to gain points and prestige.
Of late, Musk has appeared on Diablo IV as a character known as a “Spiritborn” – described by the games maker, Blizzard, as a new type of “apex predator”. Describing the attributes of a Spiritborn, Blizzard said: “They are masters of hand-to-hand combat, doling out lethality at close range… Their physical prowess allows them to block or dodge incoming strikes, absorbing this power for themselves or redirecting it back at their aggressors.”
Whether Musk sees any of himself in Spiritborn is unknown. But his success in improving his Diablo IV rankings has been mirrored in real life by the dividends he has reaped from his backing of Trump.
Since Trump’s victorious re-election campaign, to which Musk made a judicious £223m contribution, a spike in the share price of Tesla has seen the value of the car firm reach $1.4trn (£1.1trn) – almost triple the combined worth of its next four largest competitors. According to an estimate by the Washington Post, Musk’s personal wealth has grown by $170bn (£138bn) since election day in November last year.
The billionaire’s fortunes are most closely identified with Tesla, X (formerly Twitter), for which he paid $44bn in 2022 and promptly laid off 80 per cent of its staff, and SpaceX, the $350bn reusable rocket company which he founded in 2002. SpaceX also owns Starlink, the satellite-based internet network which has played a key role in bolstering Ukraine in its war against Vladimir Putin.
His other companies include Neuralink, which is focused on developing interfaces between computers and the human brain, and the Boring Company – a company which aims to solve snarled urban traffic through tunnelling and also serves as an example of Musk’s fondness for a pun. His appointment by Trump to slash US government spending by heading up a new Department of Government Efficiency (DOGE) has also been highlighted as a riff on the “dogecoin” cryptocurrency promoted by Musk.
But if proof were needed of Musk’s ability to conjure a multi-billion dollar venture seemingly out of nowhere then look no further than xAI, the artificial intelligence start-up he founded barely 18 months ago. In that time, the company has accumulated a valuation of $50bn and is looking to take on OpenAI, co-founded by Musk and the inventor of ChatGPT, as a leader in the white-hot sphere of applying artificial intelligence to daily life.
A founder of a UK-based AI company said: “You only have to look at his record to see he is a titan in this area – xAI is already worth a multiple of any UK AI start-up founded in the last decade. We’re simply not in the same league when it comes to attracting big money.”
Given such heft, Musk, whose fortune is now almost twice that of his nearest competitor in the form of Amazon’s Jeff Bezos, unsurprisingly has a significant commercial presence in the UK.
Tesla’s Model Y SUV was the UK’s best-selling car last month and the company last year passed the milestone of having sold 200,000 EVs in Britain. It also operates one of the UK’s largest charging networks with some 1,400 “superchargers” capable of replenishing a battery to 80 per cent in 25 minutes.
It emerged this week that Tesla, along with other EV manufacturers, had benefited significantly from tax payer-funded subsidies to encourage motorists to switch from diesel and petrol vehicles. According to figures produced by data analysis company Tussell, Tesla has received £188m in government grants since 2016 – peaking at £62m in 2020, and falling to just £50,000 in the first six months of last year.
Starlink last month revealed it had more than doubled its number of UK subscribers to 87,000 in the last 12 months by targeting broadband customers in rural areas. According to one internet monitoring service, demand for the satellite broadband provider is so buoyant that would-be customers in south east England were last month having to go on a waiting list because the network had reached capacity.
There is no suggestion that Musk or any of his companies are considering translating his umbrage with the Labour government into a trimming of their existing activities in Britain. Indeed, while further large-scale commercial investments may seem unlikely in the current climate, Musk’s father, Errol, this week suggested that his son would be interested in buying Liverpool FC due to the family’s historic connection with Merseyside – the billionaire’s grandmother was born in Liverpool.
But experts also argue that, in terms of direct investment or influence over the UK economy, Musk’s muscle is limited.
In 2019 he chose Berlin over Britain to site his first £4bn European gigafactory for Tesla, citing Brexit as one of his reasons for preferring Germany. And although he had been courted by the Conservative government to build a second European battery plant in the UK, his latest views on the viability of investment in Britain seem to render such a prospect distant at best.
Pepper Culpepper, professor of government and public policy at Oxford University’s Blavatnik School of Government, said the scale of any investment by Musk in Britain will always be markedly different from his interest in a huge market such as China and his online invective against the UK will be seen by no-one as the businessman putting forward a “reasoned economic case”.
Professor Culpepper said: “From the perspective of the UK Government, Musk is basically a very rich critic who opines to big audiences about issues, including UK politics, about which he does not seem that well informed.
“Instead of worrying about any effect on business, they should tell him to mind his own business. I suspect that would actually be politically popular and economically costless.”
There is nonetheless a second calculus for Britain as it seeks to deal with Musk, who has previously declared himself X’s “Chief Troll Officer” – a reference to the practice of posting provocative material or criticisms online with purpose of annoying the target.
The man who has declared an aspiration to colonising Mars has for now at least settled for setting up camp within the inner sanctum of Donald Trump’s preparations for office, which include the president-elect’s proposals to place tariffs of up to 20 per cent on all imports into the US from major economies including the UK.
According to an estimate by forecasting think-tank the Centre for Economics and Business Research, the imposition of such a toll could reduce UK GDP by 0.9 per cent over the course of a Trump administration – equivalent to a £20bn hit to the British economy. Elsewhere, it is being suggested that a long-mooted bilateral trade deal between Washington and London would be the best way for Britain to soften such a blow.
But with Musk, who has been likened by some of his online critics to a “pub bore”, seemingly determined to make life uncomfortable for the Labour government, there is concern at what might happen when conversations in Mar-a-Lago or the White House turn to the “special relationship” for as long the bromance between billionaire and Trump continues.
The City executive said: “There is an obvious scenario where Musk is critical of the UK Government to Trump and the president takes that on board.”
Despite an expectation that the meeting of minds between the two will eventually prove incompatible with their dislike for sharing the limelight, there is little sign of the relationship cooling. In a social media message sent before the new year that appeared to be intended as a private communication from Trump to Musk, the president-elect wrote: “Where are you? When are you coming to the ‘Centre of the Universe’ Mar-a-Lago?… We miss you.”
Professor Culpepper suggested it was “far-fetched” to think that Musk’s animus for Starmer could affect the UK’s ability to secure a deal over trade or tariffs but that it was “not impossible” Trump could turn against Britain, which in turn has its own tools for finding favour with the 47th president.
He said: “If the Musk/Trump relationship doesn’t sour, it’s not absolutely impossible to imagine Trump deciding he doesn’t like Britain. Tariffs will in part be a product of Trump’s whims. Of course, a Trump state banquet with King Charles could be a positive that outweighs anything bad Musk says on X.”
The duration and impact of the SpaceX owner’s high-octane critique of the Labour Party’s upper echelons remains to be seen as issues closer to home loom for Musk and Trump sets his own foreign policy sights on unforeseen locations such as Greenland and Panama.
What seems beyond doubt, however, is that the ability of the world’s richest man to amplify his thoughts and agenda around the globe is not going to diminish any time soon. As the City executive put it: “It’s all very well dismissing Musk as a pub bore. The problem is that when he’s also the one buying the drinks, people tend to listen.”
The i Paper has contacted Musk via X for comment.
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