Business

Damage Elon Musk faces from his Trump feud is just getting started

Published

5 months ago

July 17, 2025

Some political pundits have portrayed last week’s blowup as merely yet another exit by a disgruntled Trump ally. But the president’s anger toward Musk seems worse than his temper tantrums following the departures of other hand-picked loyalists, such as Vice President Mike Pence, Attorneys General Jeff Sessions and Bill Barr, Secretaries of State Rex Tillerson and Mike Pompeo, or Secretaries of Defense James Mattis and Mark Esper.

And it’s not a faux morality play about business leaders facing punishment for straying outside their lane. Musk, given his stature, is different than other CEOs who have taken pro-Trump or anti-Trump stances, whether from Papa John’s, Goya Foods, MyPillow, Coca-Cola, Delta, or Amazon. And this is not about Musk taking a principled stand on the soaring national debt or any other political issue. Instead, the blowup reflects two unrestrained top-down leaders fighting it out in a struggle for supremacy.

‘First buddy’

Musk’s biggest mistake was about the nature of his role—as an advisor to Trump, not the primary character he believed himself to be. Even now, he continues to overestimate his own importance and indispensability.

Trump, who relies on a hub-and-spokes model of leadership—where all power is centralized in himself while he divides and conquers his warring subordinates—has always been deeply resentful of consiglieres who try to outmaneuver or constrain him. Trump will never tolerate business leaders who believe they are bigger than the big boss.

Musk apparently believed that his money and largesse insulated him and entitled him to a greater role as “first buddy.” But that was misguided if not delusional.

Consider advisors with grandiosity who threatened to undermine sovereign bosses, including the Russian mystic Grigori Rasputin, who engineered creeping control over Czar Nicholas II; Mark Hanna, portrayed in his time as the grand puppeteer controlling President William McKinley; and President Woodrow Wilson’s close advisor Colonel Edward House, who undermined Wilson’s Versailles negotiations after World War I. All these audacious advisors found their presumption punctured by icing out or even execution.

Lessons from Russia

A look at recent Russian history is illustrative here. Consider Yukos boss Mikhail Khodorkovsky and Wagner chief Yevgeny Prigozhin after they dared challenge the power of Vladimir Putin, a strongman Trump has expressed admiration for.

We hosted Mikhail Khodorkovsky at our Yale CEO summits during the height of his power at Yukos in the early 2000s, when he controlled virtually all of Russia’s oil and gas reserves. He didn’t hesitate to criticize Putin at our events, openly presenting a different path for Russia’s future. When he started bringing his show on the road within Russia—thinking that Putin needed his money and support too much to whack him—he learned his money didn’t buy him the protection he thought it did. Putin quickly moved to nationalize Khodorkovsky’s assets, forming an alliance with his business rivals to divvy up his once-great wealth.

More recently, Wagner boss Prigozhin believed his mercenary group had become so indispensable—thanks to its battlefield triumphs, raw military might, and global wealth—that he could challenge the authority of Putin’s top lieutenants, blasting them in videos posted on Telegram for mishandling the Urkaine invasion. When Prigozhin failed to sway them with this bullying, he thought he could get away with marching on Moscow with his forces and starting an insurrection within Russia against Putin’s rule. The full delusion of this folly was revealed when little of the domestic support Prigozhin expected materialized. Not long after he died when his plane plunged out of the skies, the victim of sabotage—one wonders by who.

Prigozhin was among at least 60 prominent Russians who have met suspicious deaths since the start of Putin’s invasion of Ukraine in 2022. USA Today documented around 40 such cases prior to then as well, and the actual number is likely to be even higher.

Musk’s vulnerability

Musk and his defenders, emboldened by his status as the world’s wealthiest person, apparently have either forgotten such lessons or don’t think they apply to Musk. Last week, Musk taunted on X, “Trump has 3.5 years left as president, but I will be around for 40+ years.” He also called for Trump’s impeachment and accused him of being illicitly connected to the late pedophile and accused rapist Jeffrey Epstein.

Musk did all this despite his companies depending on government support in one way or another. That includes Tesla via EV tax credits, SpaceX via contracts, and Neuralink and the Boring Company via regulatory clearances. Given that Trump held up regulatory clearances of the AT&T-TimeWarner deal—which involved less personal animus than his feud with Musk—one wonders how long he could gum up the works for Musk now. Musk might be well served to remember the lessons embodied by Khodorkovsky and Prigozhin, however different the contexts.

Meanwhile, with Trump insinuating Musk’s government interest is motivated by commercial self-gain and Musk accusing Trump of entanglement with Epstein—and having the resources to fund an anti-Trump counterrevolution—the news media might be a better investment than AI or cryptocurrency.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Read more:

Source link

Business

Fed chair race: Warsh overtakes Hassett as favorite to be nominated by Trump

Published

10 minutes ago

December 15, 2025

Jace Porter

Wall Street’s top parlor game took a sudden turn on Monday, when the prediction market Kalshi showed Kevin Warsh is now the frontrunner to be nominated as the next Federal Reserve chairman, overtaking Kevin Hassett.

Warsh, a former Fed governor, now has a 47% probability, up from 39% on Sunday and just 11% on Dec. 3. Hassett, director of the National Economic Council, has fallen to 41%, down from 51% on Sunday and 81% on Dec. 3.

A report from CNBC saying Hassett’s candidacy was running into pushback from people close to President Donald Trump seemed to put Warsh on top. The resistance stems from concerns Hassett is too close to Trump.

That followed Trump’s comment late Friday, when he told The Wall Street Journal Warsh was at the top of his list, though he added “the two Kevins are great.”

According to the Journal, Trump met Warsh on Wednesday at the White House and pressed him on whether he could be trusted to back rate cuts.

The report surprised Wall Street, which had overwhelming odds on Hassett as the favorite, lifting Warsh’s odds from the cellar.

But even prior to the Journal story, there have been rumblings in the finance world Hassett wasn’t their preferred choice to be Fed chair.

At a private conference for asset managers on Thursday, JPMorgan Chase CEO Jamie Dimon signaled support for Warsh and predicted Hassett was likelier to support Trump on more rate cuts, sources told the Financial Times.

And in a separate report earlier this month, the FT said bond investors shared their concerns about Hassett with the Treasury Department in November, saying they’re worried he would cut rates aggressively in order to please Trump.

Trump has said he will nominate a Fed chair in early 2026, with Jerome Powell’s term due to expire in May.

For his part, Hassett appeared to put some distance between himself and Trump during an appearance on CBS’ Face the Nation on Sunday.

When asked if Trump’s voice would have equal weighting to the voting members on the rate-setting Federal Open Market Committee, Hassett replied, “no, he would have no weight.”

“His opinion matters if it’s good, if it’s based on data,” he explained. “And then if you go to the committee and you say, ‘well the president made this argument, and that’s a really sound argument, I think. What do you think?’ If they reject it, then they’ll vote in a different way.”

Source link

Business

What happens to old AI chips? They’re still put to good use and don’t depreciate that fast

Published

41 minutes ago

December 15, 2025

Jace Porter

New AI chips seem to hit the market at a quicker pace as tech companies scramble to gain supremacy in the global arms race for computational power.

But that begs the question: What happens to all those older-generation chips?

The AI stock boom has lost a lot of momentum in recent weeks due, in part, to worries that so-called hyperscalers aren’t correctly accounting for the depreciation in the hoard of chips they’ve purchased to power chatbots.

Michael Burry—the investor of Big Short fame who famously predicted the 2008 housing collapse—sounded the alarm last month when he warned AI-era profits are built on “one of the most common frauds in the modern era,” namely stretching the depreciation schedule. He estimated Big Tech will understate depreciation by $176 billion between 2026 and 2028.

But according to a note last week from Alpine Macro, chip depreciation fears are overstated for three reasons.

First, analysts pointed out software advances that accompany next-generation chips can also level up older-generation processors. For example, software can improve the performance of Nvidia’s five-year-old A100 chip by two to three times compared to its initial version.

Second, Alpine said the need for older chips remains strong amid rising demand for inference, meaning when a chatbot responds to queries. In fact, inference demand will significantly outpace demand for AI training in the coming years.

“For inference, the latest hardware helps but is often not essential, so chip quantity can substitute for cutting-edge quality,” analysts wrote, adding Google is still running seven- to eight-year-old TPUs at full utilization.

Third, China continues to demonstrate “insatiable” demand for AI chips as its supply “lags the U.S. by several generations in quality and severalfold in quantity.” And even though Beijing has banned some U.S. chips, the black market will continue to serve China’s shortfalls.

Meanwhile, not all chips used in AI belong to hyperscalers. Even graphics processors contained in everyday gaming consoles could work.

A note last week from Yardeni Research pointed to “distributed AI,” which draws on unused chips in homes, crypto-mining servers, offices, universities, and data centers to act as global virtual networks.

While distributed AI can be slower than a cluster of chips housed in the same data center, its network architecture can be more resilient if a computer or a group of them fails, Yardeni added.

“Though we are unable to ascertain how many GPUs were being linked in this manner, Distributed AI is certainly an interesting area worth watching, particularly given that billions are being spent to build new, large data centers,” the note said.

Source link

Business

‘I had to take 60 meetings’: Jeff Bezos says ‘the hardest thing I’ve ever done’ was raising the first million dollars of seed capital for Amazon

Published

1 hour ago

December 15, 2025

Jace Porter

Today, Amazon’s market cap is hovering around $2.38 trillion, and founder Jeff Bezos is one of the world’s richest men, worth $236.1 billion. But three decades ago, in 1995, getting the first million dollars in seed capital for Amazon was more grueling than any challenge that would follow. One year ago, at New York’s Dealbook Summit, Bezos told Andrew Ross Sorkin those early fundraising efforts were an absolute slog, with dozens of meetings with angel investors—the vast majority of which were “hard-earned no’s.”

“I had to take 60 meetings,” Bezos said, in reference to the effort required to convince angel investors to sink tens of thousands of dollars into his company. “It was the hardest thing I’ve ever done, basically.”

The structure was straightforward: Bezos said he offered 20% of Amazon for a $5 million valuation. He eventually got around 20 investors to each invest around $50,000. But out of those 60 meetings he took around that time, 40 investors said no—and those 40 “no’s” were particularly soul-crushing because before getting an answer, each back-and-forth required “multiple meetings” and substantial effort.

Bezos said he had a hard time convincing investors selling books over the internet was a good idea. “The first question was what’s the internet? Everybody wanted to know what the internet was,” Bezos recalled. Few investors had heard of the World Wide Web, let alone grasped its commercial potential.

That said, Bezos admitted brutal honesty with his potential investors may have played a role in getting so many rejections.

“I would always tell people I thought there was a 70% chance they would lose their investment,” he said. “In retrospect, I think that might have been a little naive. But I think it was true. In fact, if anything, I think I was giving myself better odds than the real odds.”

Bezos said getting those investors on board in the mid-90s was absolutely critical. “The whole enterprise could have been extinguished then,” he said.

You can watch Bezos’ full interview with Andrew Ross Sorkin below. He starts talking about this interview gauntlet for seed capital around the 33-minute mark.

This story was originally featured on Fortune.com

Source link