Elon Musk touches everyone’s lives. And increasingly, each of his ventures build on his others, creating a vertically integrated behemoth that is too big to fail. Consider how Musk’s social media site X, formerly Twitter, is automated by Grok, an artificial intelligence assistant created by xAI, which is a subsidiary of Musk’s SpaceX, which just had a spectacular initial public offering and controls Starlink, a satellite internet service used around the world. Together, these companies span not only discourse, big data, and the airwaves, but also the future of truth itself. (Grok is also building Grokipedia, an AI-composed encyclopedia.)

The growing SpaceX empire, with a market value of more than $2 trillion, is no abstract matter for ordinary citizens. Millions of people are now automatically invested in the company through index funds and pension plans following its recent blockbuster listing on Nasdaq. So, what does its immense size and dominance of space mean for geopolitics? If one company—and one man—can determine whether countries or warring parties can have internet access in sensitive areas served only by Starlink, what does that mean for the world?

On the latest episode of FP Live, I spoke with Quinn Slobodian, a historian at Boston University and the author of several books on capitalism and neoliberalism. He is the co-author, most recently, of Muskism: A Guide for the Perplexed. The transcript that follows focuses on our discussion about SpaceX. For the full interview, including an explanation of what Muskism refers to and why it matters, try the video box atop this page—for subscribers only—or the free FP Live podcast, wherever you get your audio.

Ravi Agrawal: Let’s talk about SpaceX. What does it do exactly? Why is it so important?

Quinn Slobodian: The SpaceX IPO prospectus lays it out quite clearly. The way they describe it, it has basically three segments. There is a rocket segment, the Falcon 9 rockets, which have been doing a very good job at running many, many missions, often with the partially reusable rocketry that they pioneered about 10 years ago. Then there is the connectivity segment, which is Starlink. There are now around 10,000 of these low-Earth orbit satellites orbiting the Earth. In [early] 2019, there were zero, so that’s a fairly rapid upgrade. It accounts for about 70 percent of the satellites in orbit. Those provide relatively low latency broadband internet, and they’re moving into direct-to-device mobile, too. (That’s actually the only part of the company that currently makes money. The rockets more or less break even.)

Then there’s the AI segment, xAI, the most recent part of SpaceX. xAI is, at the moment, lagging quite far behind the front-runners Anthropic, OpenAI, and even Google Gemini. But what people are buying, if you look at the prospectus and how Musk describes SpaceX, is the AI segment. Most of the future growth, most of the future profit—85 percent, actually—is supposed to come from AI.

The question arises, then: How do they propose leapfrogging the competitors who are currently far ahead of them? The answer is that they’ll break the energy bottleneck that currently plagues the problem of compute for other AI companies by putting data centers in space.

RA: And part of the reason why SpaceX’s stock is down this week is that there have been worries about whether the AI market is overheated and whether we do, in fact, need that many more data centers.

I want to ask you about how reliant we all are on SpaceX. Obviously, this is now a company many of us are invested in. It’s also a company that has been backed by a lot of U.S. government funding, historically. How American is SpaceX? Does this give the United States a geopolitical advantage over China or India or anyone else?

QS: It’s a very important question because in many ways, one of the successes of Musk in the 2000s and 2010s was to denationalize himself, or to not overly mark himself as, let’s say, synonymous with the U.S. state. What that allowed him to do was to sell his production model of the Tesla Gigafactory to multiple clients throughout the world and convincingly sell them the vision that they were defending their own sovereignty and their own state capacity, even though they were buying his services.

It’s similar to the way Nvidia is now being shopped around the world by Jensen Huang under the language of “sovereign AI,” even though one could say, “How sovereign are you, if you’re buying all of your chips from an American company completely reliant on Taiwanese fabrication?”

You were able to sidestep those questions in the era of globalization because there was still a separation between economics and politics through multilateral trade treaties, a general sense of investor security, and more or less a comity between host and investing nations. Things have changed—no secret to the readers of Foreign Policy. Musk’s decision to become such an avid and vocal supporter of [U.S.] President [Donald] Trump and the MAGA movement has now, I think, bolted his own reputation, and to a lesser extent the reputation of his companies, onto Trump and MAGA in a way that now makes him vulnerable in ways that he wasn’t before.

RA: Vulnerable, yes, but there’s one more element to this. If I can flip my earlier question about how SpaceX does or doesn’t give America an advantage, how reliant are other governments on SpaceX and therefore on Elon Musk? I mean, will they also try to cozy up to him and get favors out of him?

QS: They are very reliant on him. SpaceX is responsible for well over half of global satellite launches, and those are not just American satellites being put into orbit. Those are satellites for countries from all over the world. He has all but cornered the market for orbital launch through a reduction in costs and the vertical integration model of production which has, through trial and error and many explosions, more or less perfected something that was previously very difficult to achieve.

But what has the response been? Does it mean that now people and politicians are obliged to continue cozying up to Musk? Or has it actually accelerated the attempt to displace Musk’s monopoly position in the space of orbital launch?

That’s what’s happening in the EU right now. The Ariane rocket launch service, which has been sputtering along for decades, is now getting a lot more attention. The merger of Leonardo and Airbus to displace SpaceX has been discussed in the last few weeks. Eutelsat, another low-Earth orbit alternative provider, is now getting contracts it hadn’t before. And the European Union is reserving parts of its spectrum for European-produced and owned satellites, thus deliberately pushing Musk out as the only possible contractor.

Right now, it’s difficult, even if they ramp up production. Ariane’s only at 10 percent of what SpaceX does. But his [Musk’s] fusion with Trump, as well as his intervention into sovereign politics of places like the U.K., Germany, and the Netherlands, has actually made people repelled enough to accelerate the push away from him, even as his apparent indispensability increases globally.

RA: What about China? Elon Musk has an interesting relationship with Beijing. He was quite dependent on them for the manufacturing of Teslas, for example. He’s been to China many times and has a relationship with [President] Xi Jinping, but I imagine that Beijing would also not want to cede this much power regarding lower-orbit satellites to one man—and one man who seems to be this connected to the man in the White House.

QS: Absolutely. It’s important to point out that when you say he was dependent on China for construction of Teslas, those were for the Teslas that were being constructed in China for a Chinese company. What’s actually very interesting is that Musk and Tesla were swimming against the tide in the early 2000s when Apple, for example, was designed in California but assembled in China. Musk was building his Teslas in the United States, which is why when COVID hit in 2020, he was able to get production up quicker than his competitors. If you check, 2020 is also when he becomes the wealthiest man in the world and Tesla becomes the most valuable [car] company in the world. So it’s working against the grain of globalization that actually has gotten Musk where he is. But indeed, his express hope was to create a Gigafactory on every continent.

In China, I would say that he’s just been used shrewdly by policymakers there. As you suggest, they are not interested in depending too much for basic state capacity on Musk’s products. They built their own alternative super constellations of low-Earth orbit satellites.

Indeed, the BRICS countries have been the most consequent opponents of Musk’s dependencies. South Africa has not allowed Starlink receivers into its country. India, though a very big user of X, has not either. Now they’re slow-walking it, partially because Musk has been so associated with Trump’s foreign policy, which has had such catastrophic downstream social effects in India with energy costs, that the likelihood of him getting there is pushed even further into the future. Brazil, let’s not forget, seized Starlink assets after Musk refused to do content moderation on incendiary X posts that were pushing for a coup there. So there have been ways to actually slow down and halt the level of dependency. China, as always, has been very good at preserving its own autonomy while selectively making use of investments and technologies that it often bundles into its own products and services.

RA: I want to take us to war. There was this moment in the Russia-Ukraine war where it was said that Musk was able to shut down the internet, which was being used by Ukrainian soldiers to communicate with each other. There was a lot of fear at that moment of how one person can play God in a major international conflict.

QS: There were actually two incidents. There was one in Crimea and one in the Kherson offensive, both of which Musk has denied. But especially the Kherson one has been now confirmed through Reuters’ reporting.

RA: Tell us about the specifics there. What happened?

QS: In both cases, Musk apparently had a concern about the war escalating to the point of nuclear conflict and made an executive decision that Starlink connectivity for Ukrainian troops would be cut and they would go dark in the field, which immediately caused a pullback of the offensive. The interesting moment was an immediate response from the Polish foreign minister, who said that this is a danger and we need to remove our dependency on Starlink in case such incidents happen in the future. And Musk tweeted back at him, “Be quiet, small man.”

In some foreign policy and diplomatic circles, that response as much as the Reuters reporting has made people concerned about the high-handedness of a private service provider who sees themselves as above the diplomatic courtesies of not treating an elected official in such a rude and insolent manner.

RA: And that official, I should point out, was Radek Sikorski, the Polish foreign minister who’s been on this show—anything but a small man.

QS: Right. So, what have people been doing? Well, the only thing they can do, which is to try to build out their alternatives. This has become a main talking point for the Europeans: about why they need their own low-Earth orbit satellites and cannot depend on American service providers in extremis.

Of course, it’s easier said than done. Obviously, there’s a limit to how one can act as a sovereign nation if you find yourself always subordinated to the decisions of an external actor. And the degree of integration of all aspects of everyday life—forget war fighting, just try sending an email or tapping your phone to get on the subway—the most explicit example of the dependency has been shown by judges from the Hague who have been sanctioned by the United States for having supported arrest warrants for [Israeli Prime Minister] Benjamin Netanyahu on the basis of war crimes. They have found themselves cut out from all of Silicon Valley’s tech capacities, and thus not able to conduct any of their daily business. This has been a real wake-up call for politicians and everyday citizens in Europe about the perils run by this kind of dependency on Elon Musk.

RA: This brings me to the question of checks and balances and regulation, and your book shows that regulation is so important because Musk, right at the start—well before he started these companies—saw regulation as sort of an enemy, as something that would stop him from growing the way he needed to grow, and therefore he needed to get ahead of it and in fact partner with the state, as it were, as he did with SpaceX, to find a willing participant in getting rid of some of the checks and balances.

How should countries now think about checks and balances, or any form of regulation, on a company like SpaceX?

QS: This is really the key question. You put your finger on it there, that he’s opposed to regulations, states, and governments, insofar as they are obstructions to his accumulation model and business model. He sees them as things that need to be intervened in and reformatted to better align with his interests. In that sense, he’s not against them in the abstract. He actually realizes that he requires government, public budgets, and the alignment of regulations, but he wants to make sure that they all line up with his interests.

The Department of Government Efficiency (DOGE) itself can be understood in that way: an entry into the government, not to raze it to the ground, but to realign it in ways that better line up with his own future profit accumulation strategies.

With that being said, he’s very far from having aligned the entire regulatory apparatus of the world to his interests, and if you read the SpaceX prospectus, you find the longest list of risk factors is laws, regulations, and adverse legislation. There are many veto points at which his juggernaut-like expansion of SpaceX—upon which the valuation is premised—could run into very serious problems.

One is the launching of—as he has now implicitly and explicitly claimed over and over—up to 1 million new satellites into low-Earth orbit over the next number of years. That has been filed as a petition to the Federal Communications Commission (FCC). It’s mentioned as if it’s already been approved in the SpaceX prospectus. But what actually happens in a regulatory sense? The FCC doesn’t make the decision itself; it acts as the agent for the United States to speak to the International Telecommunications Union, a specialized agency of the U.N., which at that point can easily say no. The prospect of them saying yes to 1 million satellites is zero. They won’t. Astrophysicists have talked about things like the Kessler effect for years—that the collision risk would be far too high.

Outer space is not empty. It’s not just a place to be grabbed. There are treaties that govern it. And if the willingness of state actors aligns to obstruct Musk, then he will very quickly run into walls that he might not be able to smash through. So his sense of inevitability, and the way that he presents these things as faits accomplis—putting AI-generated images of orbital AI data centers into the SpaceX prospectus as if they already exist, even in prototype, which they do not—is all part of the Silicon Valley investment model, which we call “financial fabulism” in the book, and which always relies on acting as if your goals have already been achieved long before they have and wishing away all of the obstacles that still exist.

So, I think that people who are offended by, appalled by, or skeptical about Musk and his increasing structural centrality in the global economy should simply look to their own governments and realize that the number of obstacles that can be thrown in his path are actually numerous.

RA: Given everything you’re saying, just to bring this back to how all of us are, at some level, invested in Elon Musk and his companies, from your description of it, two things seem to be true at once. This is a vertically integrated set of companies that at some level, through the massive valuations around them, are some form of a Ponzi scheme. But simultaneously, they are also too big to fail. And therefore, everyone seems to be jumping on board.

Where do you see that headed? Could this just continue indefinitely, or is there, from everything you’ve been studying on this, some natural point where the bubble has to burst?

QS: It’s important to see that this is not just about Musk, SpaceX, or his ensemble of companies. It is about the kind of extreme dependency that the United States political economy has developed on one sector of the economy, namely digital capitalism and Big Tech. Over half of the U.S. population is either directly or indirectly invested in the stock market. So, this has real-life, downstream effects on people’s lives.

But if the U.S. economy equals Silicon Valley and Big Tech—even if Musk is removed from that—then there is no way for a politician to make a different kind of policy other than that which is most hospitable and accommodating to the Big Tech leaders. Why? Because say you want to go in and target Musk, as a Democratic politician, and bring him in front of Congress, investigate his companies, and see whether or not he was operating legitimately when he was in the government under DOGE. Let’s say that leads to a collapse of the valuation of SpaceX and Tesla in short order. What does that do to investor confidence for the tech sector in general? It gives it a big blow.

So, you then get a cascading effect of falling stock valuations across the sector, and before you know it, people start checking their portfolios and investment accounts and saying, oh my gosh, what’s happening to the economy? Why are these Democratic lawmakers blowing up my retirement account? People like [OpenAI CEO Sam] Altman, [Anthropic CEO Dario] Amodei, and Musk are well aware of this dependency, and they play it to their advantage.

Why did Musk want to go public before the midterm elections? Because he wanted to become a structural pillar of people’s future life choices before any slowing down of the accumulation effect of his business started to kick in.

The midterms are going to be a very interesting test of voter stomach for a political model based on a one-way bet on generative AI that promises obsolescence for people’s future livelihoods, and so far hasn’t delivered material gains for either them or the businesses that apply these AI tools. I think that is going to start chipping away at least at the level of investor interest in this sector.

But as I’ve indicated, things aren’t going to get better until we diversify what the U.S. political economy is about. We need to look at the parts of the U.S. political economy that are also vital and have incredible potential. Biotech. Higher education. The green manufacturing sector that was pushed so hard by [former President Joe] Biden. If we get back to those things, then we also can release the death grip that Silicon Valley has developed.