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When Trump admitted Musk would be "susceptible" due to his China business ties, it exposed the dangerous gamble of letting a billionaire with $38B in government contracts into Pentagon's inner circle. The untold story of Musk's extraordinary access to defense secrets.
On March 21, 2025, Elon Musk, the world's richest person and head of Donald Trump's government efficiency initiative, visited the Pentagon for a high-level meeting with Defense Secretary Pete Hegseth. What was initially described as a routine discussion about government efficiency quickly erupted into controversy after reports emerged suggesting Musk would receive briefings on potential war plans with China.
The incident has spotlighted the unprecedented access Musk enjoys within the Trump administration and raised serious questions about potential conflicts of interest given his extensive business ties to China and multibillion-dollar contracts with the Department of Defense.
On Friday, March 21, Elon Musk arrived at the Pentagon shortly before 9 a.m. for what became an 80-minute meeting with Defense Secretary Pete Hegseth in the secretary's office. The visit was part of Musk's ongoing work with the United States DOGE Service (USDS), the cost-cutting task force created by President Donald Trump to identify waste and inefficiency across federal agencies.
According to official statements, Musk was at the Pentagon to discuss innovation, efficiencies, and "smarter production" as part of the USDS mandate to scrutinize federal spending. As he departed the building alongside Hegseth, Musk told reporters, "It's always a great meeting" and "I've been here before, you know," referencing a previous 2016 visit when he met with then-Defense Secretary Ash Carter during the Obama administration.
But what was intended to be a relatively standard government efficiency meeting quickly became embroiled in controversy when The New York Times reported that Musk would be briefed on plans for a potential war with China.
The controversy began when The New York Times published a story claiming Musk would be briefed on the U.S. military's plan for any war that might break out with China. According to the report, Musk was initially scheduled to attend a meeting with the Joint Chiefs of Staff in a secure Pentagon conference room known as "The Tank" (a secure meeting room on the Pentagon's high-level E-ring suite of offices), with Adm. Samuel Paparo, head of U.S. Indo-Pacific Command, joining virtually from Sri Lanka.
The reaction was swift and fierce. President Trump immediately took to social media to deny the report, writing: "China will not even be mentioned or discussed. How disgraceful it is that the discredited media can make up such lies."
Defense Secretary Hegseth similarly dismissed the story, stating on social platform X: "This is NOT a meeting about 'top secret China war plans.' It's an informal meeting about innovation, efficiencies & smarter production."
Musk himself called for the prosecution of Pentagon officials who he claimed leaked "maliciously false information" to the Times, saying: "I look forward to the prosecutions of those at the Pentagon who are leaking maliciously false information to NYT."
Following the public backlash, the meeting plans apparently changed. Instead of joining the Joint Chiefs in "The Tank," Musk remained in Hegseth's office for the duration of his visit. According to ABC News, "The meeting of the Joint Chiefs of Staff did take place as scheduled, but Paparo did not join the meeting as previously scheduled."
Later that day, speaking to reporters in the Oval Office, President Trump addressed the controversy directly, stating: "I don't want to show [war plans] to anybody. But certainly, you wouldn't show it to a businessman who is helping us so much... Elon has businesses in China, and he would be susceptible, perhaps, to that."
This presidential acknowledgment of Musk's potential conflict of interest added another layer of complexity to an already controversial visit.
To understand the context of Musk's Pentagon visit, it's essential to grasp the nature and scope of his role within the Trump administration. On his first day back in office, President Trump established what is officially called the "United States DOGE Service" (USDS) via executive order and tasked Musk with leading the initiative alongside former Republican presidential candidate Vivek Ramaswamy.
According to the executive order published on the White House website, USDS was established "to implement the President's DOGE Agenda, by modernizing Federal technology and software to maximize governmental efficiency and productivity." The order moved the entity from the Office of Management and Budget to the Executive Office of the President.
Musk's status within the administration has been somewhat ambiguous. While Trump has repeatedly referred to Musk as being "in charge" of USDS, saying in February that he "signed an order creating the Department of Government Efficiency and put a man named Elon Musk in charge," White House documents have described him as a "special government employee" (SGE) and "senior adviser to the president" who "has no greater authority than other senior White House advisers."
This designation as an SGE is significant because it allows Musk to work for the government for up to 130 days per year while maintaining his positions as CEO of Tesla, SpaceX, and other companies. It also subjects him to less stringent ethics and financial disclosure requirements than regular government employees.
NPR has reported that "several young engineers from Silicon Valley have joined his team" at USDS. Since its inception, the group has moved aggressively across federal agencies, with its representatives gaining access to sensitive systems at the Treasury Department, Office of Personnel Management, and other agencies. According to NPR, USDS has already "effectively dismantled USAID, the main U.S. foreign aid agency," which Musk has called a "criminal organization" that needs to "die."
The Pentagon, with its massive budget approaching $1 trillion per year, has been a primary target for USDS's cost-cutting efforts. President Trump has said he expects Musk to find "hundreds of billions of dollars of fraud and abuse" at the Pentagon.
The controversy surrounding Musk's Pentagon visit has brought renewed attention to the potential conflicts of interest inherent in his dual role as government adviser and business magnate with extensive government contracts and foreign business interests.
When asked about these potential conflicts, White House Press Secretary Karoline Leavitt stated that "if Elon Musk comes across a conflict of interest with the contracts and the funding that DOGE is overseeing, then Elon will excuse himself from those contracts." Leavitt also noted that she "wasn't sure whether the Tesla CEO has gained security clearance," according to CBS News.
This arrangement effectively allows Musk himself to determine when a conflict of interest exists—an approach that has drawn criticism from government ethics experts and Democratic lawmakers.
"Is he going to have an incentive to cut other government spending, but not the spending that benefits him?" questioned Noah Bookbinder, president of the government ethics advocacy group Citizens for Responsibility and Ethics in Washington, in comments to ABC News.
Rep. Gregory W. Meeks (D-NY), the ranking Democrat on the House Foreign Affairs Committee, was more pointed in his criticism, stating on social platform X: "Handing Musk our military plans for China goes far beyond the usual kleptocracy of this admin. Musk has a significant financial stake in China."
Meanwhile, President Trump has attempted to reassure the public about Musk's role, stating: "Elon can't do and won't do anything without our approval," and "Where we think there's a conflict or a problem, we won't let him go near it," according to AP News.
The potential conflicts of interest surrounding Musk's government role are particularly acute given the vast sums his companies receive from the federal government. According to a Washington Post analysis, Musk's businesses have received at least $38 billion in government contracts, loans, subsidies, and tax credits over the years, with $6.3 billion committed in 2024 alone.
SpaceX, Musk's aerospace company, has been the largest beneficiary. SpaceX President Gwynne Shotwell has stated that the company has "about $22 billion in government contracts," with "about $15 billion derived from NASA," according to Reuters and US News. ABC News reports that over the past decade, SpaceX has earned "more than $13 billion in contracts from NASA," making it the agency's second-biggest contractor.
SpaceX has also secured approximately $5 billion in contracts from the Department of Defense, according to ABC News. SpaceX's defense contracts grew significantly under the Biden administration, reportedly doubling from $856 million in 2023 to $1.8 billion in 2024.
In October 2024, the U.S. Space Force awarded $733 million in launch contracts to SpaceX for the National Security Space Launch program to lift satellites into orbit. The company has also been tapped for more Pentagon launch contracts potentially worth hundreds of millions of dollars more.
Beyond traditional launch services, SpaceX's satellite-based internet service, Starlink, "has had contracts with Special Operations Command, the Air Force, Army and other parts of the Pentagon," according to Reuters. In July 2024, Space Force committed $70 million to Musk's Starshield satellites as part of the Proliferated Low-Earth Orbit plan.
Perhaps most significantly, Reuters reported in March 2024 that SpaceX is "building a network of hundreds of spy satellites under a classified contract with a U.S. intelligence agency." This $1.8 billion contract with the National Reconnaissance Office, signed in 2021, demonstrates "deepening ties between billionaire entrepreneur Elon Musk's space company and national security agencies."
These contracts make Musk's government efficiency push potentially problematic. As he works to slash federal spending, his own companies continue to receive billions in taxpayer funding.
Adding another layer of complexity to Musk's Pentagon visit is his significant business presence in China, America's primary strategic competitor.
Tesla, Musk's electric vehicle company, operates two manufacturing facilities in Shanghai. According to a statement from Rep. Rosa DeLauro (D-CT), these facilities produce "about 50 percent of Tesla's global automobile output." China is Tesla's second-largest market, with annual vehicle sales reportedly rising by 8.8% in 2024, according to Newsweek.
Musk has cultivated close relationships with Chinese officials. He has met with high-ranking Chinese leaders, including Premier Li Qiang, Foreign Minister Qin Gang, Industry Minister Jin Zhuanglong, and Commerce Minister Wang Wentao. During these meetings, Musk has reportedly expressed enthusiasm for deepening Tesla's cooperation with China.
Some observers, including former Trump advisor Steve Bannon, have pointed to these ties as a significant conflict of interest. Bannon told Newsweek, "I've always been public about my deep reservations concerning Elon's financial ties to the CCP [Chinese Communist Party]—the Tesla joint venture underpins his entire business empire and they control it."
Musk has also made statements that align with Chinese government positions on certain issues, such as suggesting that Taiwan is "part of China"—a stance that has raised concerns among some U.S. national security experts, with former Naval official Michael Studeman telling Newsweek, "That's a demonstrable piece of evidence in fact that Elon is an extension of the CCP's voice."
Musk's Pentagon visit and his broader role in the Trump administration have significant implications for the defense industry and national security policy.
The defense sector has traditionally been dominated by established contractors like Lockheed Martin, Boeing, and Raytheon. However, SpaceX has successfully disrupted this landscape, offering lower-cost launch services and innovative technologies that have challenged the status quo. In 2016, SpaceX's success in securing federal contracts prompted rival Jeff Bezos, founder of Blue Origin, to reportedly say in a company meeting: "Elon's real superpower is getting government money."
SpaceX's Pentagon contracts now span various domains, including:
Through these various contracts, SpaceX has become deeply embedded in the national security apparatus, raising questions about whether Musk's cost-cutting efforts at the Pentagon could be influenced by his business interests.
Musk's unprecedented role in the Trump administration has faced numerous legal challenges. According to Reuters, "Multiple groups including unions and state attorneys general have sued DOGE and the wider Trump administration over their plans."
One particularly significant legal challenge came in February 2025, when "One of the largest U.S. labor unions asked a federal judge on Wednesday to block Elon Musk's government cost-cutting effort from accessing the Department of Labor's systems, which the union warned could give the billionaire sensitive information about investigations into his companies," according to Reuters.
The lawsuit filed by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) specifically warned that if USDS representatives gained access to the Occupational Safety and Health Administration's (OSHA) databases, "they could potentially give Musk information about people who filed complaints against Tesla and its competitors that would not normally be available to the public."
This lawsuit followed earlier legal action over USDS's access to the Treasury Department's payment systems. In February, two unions and the Alliance for Retired Americans sued over USDS's access to Treasury systems that handle everything from tax refunds to Social Security payments, alleging that the move breaches privacy regulations.
Democrats on the House Oversight Committee attempted to hold Musk accountable for his actions by moving to subpoena him, but the motion failed in a 19-20 vote along party lines.
From a historical perspective, the level of access and influence Musk has within the Trump administration is unprecedented for a private business leader. While business executives have served in government before, few if any have maintained active leadership roles in multiple major corporations while simultaneously wielding significant influence over federal policy and spending.
This influence is even more remarkable considering Musk's financial support for Trump during the 2024 election. According to AP News, Musk "spent roughly $250 million supporting Trump through America PAC, which included door-to-door canvassing and digital advertising."
Senate Minority Leader Chuck Schumer has characterized the situation as a "hostile takeover of the federal government" by "an unelected shadow government." While this characterization is disputed by the administration, it reflects the concerns of many observers about the concentration of power in the hands of an unelected billionaire with vast business interests.
The controversy surrounding Musk's Pentagon visit highlights these tensions. Even if Musk never received any classified briefing on China, the fact that President Trump himself acknowledged that Musk's business ties to China would make him "susceptible" to conflicts of interest underscores the precarious nature of his dual role.
Moreover, Musk's aggressive approach to government efficiency, including his calls to "delete entire agencies" and his characterization of USAID as a "criminal organization" that needs to "die," has alarmed many career civil servants and policy experts who warn that hasty cuts could damage vital government functions and national security.
Despite the controversy, USDS's work at the Pentagon continues. The Defense Department has announced a goal of reducing its civilian workforce by up to 8 percent, which could amount to nearly 60,000 people, according to the Washington Post.
The Pentagon's budget, approaching $1 trillion per year, represents a significant target for cost-cutting efforts. Trump has claimed that Musk will find "hundreds of billions of dollars of fraud and abuse" at the Defense Department.
Whether such massive waste actually exists is debatable. While inefficiencies certainly exist in an organization as large as the Pentagon, many defense experts argue that the majority of the budget goes to necessary personnel, equipment, and operations costs.
As USDS continues its work, several questions remain:
The answers to these questions will shape not only the future of the Pentagon but also the broader relationship between government and business in the United States.
The United States DOGE Service (USDS) is an advisory body created by President Trump via executive order on his first day back in office. While Trump has described Musk as being "in charge" of USDS, saying in February 2025 that he "signed an order creating the Department of Government Efficiency and put a man named Elon Musk in charge," White House documents designate him as a "special government employee" (SGE) and senior adviser to the president. Musk co-leads the initiative with former Republican presidential candidate Vivek Ramaswamy.
According to statements from President Trump, Defense Secretary Hegseth, and Musk himself, no such briefing occurred. The original New York Times report claiming Musk would receive such a briefing was strongly denied by administration officials. Instead of meeting with the Joint Chiefs of Staff in "The Tank" as originally reported, Musk remained in Defense Secretary Hegseth's office for his entire 80-minute visit.
According to a Washington Post analysis, Musk's businesses have received at least $38 billion in government contracts, loans, subsidies, and tax credits over the years, with $6.3 billion committed in 2024 alone. SpaceX President Gwynne Shotwell has stated that the company has "about $22 billion in government contracts," with "about $15 billion derived from NASA." SpaceX has also secured approximately $5 billion in contracts from the Department of Defense.
Tesla operates two manufacturing facilities in Shanghai that, according to Rep. Rosa DeLauro, produce "about 50 percent of Tesla's global automobile output." China is Tesla's second-largest market, with annual vehicle sales reportedly rising by 8.8% in 2024. Musk has met with high-ranking Chinese officials including Premier Li Qiang, Foreign Minister Qin Gang, Industry Minister Jin Zhuanglong, and Commerce Minister Wang Wentao.
As a special government employee (SGE), Musk is subject to less stringent ethics and financial disclosure requirements than regular government employees. SGEs are prohibited from working on issues that impact their financial interests, though they can receive waivers in certain circumstances. According to White House statements, Musk himself will determine when to recuse himself from matters where conflicts exist, with Press Secretary Karoline Leavitt stating that "if Elon Musk comes across a conflict of interest with the contracts and the funding that DOGE is overseeing, then Elon will excuse himself from those contracts."
Responses have largely fallen along partisan lines. Many Republican lawmakers have supported Musk's efficiency efforts, while Democrats have raised concerns about conflicts of interest and overreach. Rep. Gregory W. Meeks (D-NY) called Musk's potential access to China-related defense information "beyond the usual kleptocracy." A motion by Democrats on the House Oversight Committee to subpoena Musk failed in a 19-20 vote.
Multiple lawsuits have been filed against USDS by unions, state attorneys general, and advocacy groups. In February 2025, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) asked a federal judge to block USDS from accessing the Department of Labor's systems. Earlier, two unions and the Alliance for Retired Americans sued over USDS's access to Treasury Department payment systems, alleging privacy violations.
According to White House Press Secretary Karoline Leavitt, she "wasn't sure whether the Tesla CEO has gained security clearance." CNN reported in March 2025 that Musk "has a top-secret security clearance and is serving in the Trump administration as a special government employee."
This article was co-authored by Raj Patel, our Tech Economy Analyst with expertise in decoding complex business models in the technology sector, and Jon Morris, our Economic Policy and Global Affairs Analyst who brings deep institutional knowledge to his analysis of government policy and international relations.
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