Tensions escalated on Saturday between Republican President Donald Trump and his chief campaign donor, Elon Musk, as the tech mogul unveiled plans to launch a new political party.
Musk, the billionaire behind Tesla and SpaceX, made the surprise announcement after Trump signed into law his controversial “big, beautiful” tax-cut and spending bill, legislation Musk openly condemned, warning it could drive the nation into bankruptcy.
Just a day after polling users on his X platform about forming a new political movement, Musk took to the site again to reveal his decision, “Today, the America Party is formed to give you back your freedom.” He added, “By a factor of 2 to 1, you want a new political party and you shall have it!”
The rift between the two powerful figures, often described as the richest and the most powerful men in the world, appears to be widening.
Musk, who helped finance Trump’s re-election campaign and had been leading the Department of Government Efficiency since the president’s second term began, has now taken a stand against the administration’s latest fiscal policy.
Reactions to Musk’s announcement were swift. James Fishback, CEO of investment firm Azoria Partners, announced that a planned Tesla exchange-traded fund would be postponed.
In a post on X, Fishback urged Tesla’s board to address concerns about Musk’s political involvement, noting that the launch of the America Party “undermines the confidence shareholders had that he would be focusing more on the company after leaving government service in May.”
Musk had previously threatened to use his wealth to challenge lawmakers who backed the spending bill.
Trump, meanwhile, recently warned he could cut off federal subsidies to Musk’s companies, further deepening the discord.
Some within the Republican Party are uneasy about the fallout. With midterm congressional elections looming in 2026, party insiders worry the Trump-Musk clash could fracture the base and hurt their efforts to maintain control of Congress.
When asked on X what caused his sudden shift from staunch supporter to outspoken critic of Trump, Musk was blunt: “Increasing the deficit from an already insane $2T under Biden to $2.5T. This will bankrupt the country.”
The White House and Trump have yet to comment on Musk’s bold move.
The high-profile dispute has already impacted Tesla’s stock. Following Trump’s re-election in November, Tesla shares surged to a peak of over $488 in December. But after a steep drop in April, the price had settled at $315.35 by the end of last week.
Despite Musk’s immense financial resources, the path ahead for his America Party is daunting.
The U.S. political landscape has long been dominated by two major parties, a dynamic that has proven resilient for over 160 years.
Meanwhile, Trump’s approval ratings have remained consistently above 40% in his second term, suggesting that Musk’s challenge may face significant headwinds.