Author: Bu Shuqing
Source: Wall Street Insights
In the power game of Washington, few ally relationships can collapse so quickly from private disagreement to public declaration of war. Just a week ago, Musk was enjoying a golden key farewell ceremony at the White House, and now he is engaged in a social media "nuclear war" with President Trump - threatening Trump's core legislative agenda while also causing the carefully cultivated alliance between Silicon Valley and MAGA to face complete collapse.
As the world's richest man begins to hint that the president should be impeached and claims to have information about his connection with Epstein, the market has already sensed a dangerous atmosphere.
Trump-Musk Battle Reaches Stalemate, Silicon Valley Goes Crazy
Trump and Musk's allies are trying hard to repair this rift, attempting to minimize the political and commercial losses caused by this week's "confrontation".
On the White House side, according to a previous article by Wall Street Insights, there were reports that Trump's staff arranged a phone call on Friday. Just as onlookers were waiting for reconciliation, the White House quickly denied the report. Trump said in a media interview on Friday that he was not interested in talking to the "crazy" Musk and even suggested considering selling his red Tesla.
Texas Senator Ted Cruz said on Friday: "This is unfortunate... I hope they can get back together. Many conservatives feel this is not good, let's embrace reconciliation." Cruz was present when Trump was angry with Musk in the Oval Office that day.
Musk seems open to easing tensions, responding positively to hedge fund manager Bill Ackman's call for them to reconcile "for the sake of our great country".
The "Trump-Musk" battle reaching a stalemate has quickly spread panic in Silicon Valley. A Silicon Valley financier and Republican major donor told the Financial Times: "Musk is not taking any calls, including from those who have invested billions in his company... Silicon Valley is losing its mind."
From Allies to Enemies in 48 Hours, Full Record of Escalation
Wall Street Insights previously sorted out the timeline from the "brotherly" Trump-Musk combination to "turning against each other", but the escalation trajectory of this conflict is far more dramatic than the outside world imagined.
Wednesday: Musk's Attack at a Critical Moment
According to reports, Musk's first "attack" (mainly focused on deficit predictions related to the "Big Beautiful" bill) became the background for Trump's important meeting with key Republican senators on Wednesday afternoon. This infuriated White House advisors who were trying to balance the bill passed in the House and competing priorities in the Senate.
Trump himself remained restrained, partly to avoid escalation and prevent Musk from launching a full-scale "war" against Republican lawmakers.
Thursday: Oval Office Witnesses Full-Scale "Nuclear War"
On Thursday local time, before Trump's private talks with German Chancellor Merz, Musk commented on the meeting at a press conference, which mainly discussed trade and economic issues. Musk's real-time reaction still brought the matter to the surface.
Musk explicitly criticized Trump's tariff policies, and by the time House Speaker Mike Johnson arrived at the White House for a meeting, a full-scale war had broken out between them.
Johnson and Trump watched in real-time in the Oval Office as Musk announced what amounted to a nuclear war statement. Just 13 minutes into the meeting with German Chancellor Merz, Trump began to vent his dissatisfaction with this billionaire benefactor.
Thursday's "Explosion" Caught White House Senior Assistants Off Guard
According to Trump's advisors, Musk's escalation caught Trump by surprise. Trump told his advisors that he believed his attitude towards Musk in the Oval Office was not harsh, but Musk's aggressive approach surprised him.
Trump's assistants spent Thursday trying to figure out Musk's objectives. According to a White House assistant, the president told his advisors that Musk was just a child.
Musk's Close Friend Removed
The Wall Street Journal revealed more behind-the-scenes details: Last Friday, before Musk's farewell ceremony, Trump's assistant Sergio Gore presented a document about NASA's potential new director Jared Isaacman's donations to the Democratic Party during a meeting in the Oval Office restaurant.
Musk defended Isaacman and tried to downplay the importance of these donations. However, sources revealed that Trump said he wanted to revoke Isaacman's nomination. Later, the White House announced the withdrawal of Isaacman's nomination as the next NASA director.
Five Key Directions
Where will this conflict go? Five things need to be closely watched:
Will Trump turn the page? This dispute will ultimately divert attention from Trump's agenda. Establishment Republicans worry that the legislative opportunity window for a government term is closing rapidly.
Will Musk continue to escalate? As Musk begins to hint at Trump's involvement in the Epstein case, the direction of this conflict becomes unpredictable.
Will the "Big Beautiful" bill be stalled? The bill aimed at preserving and expanding Trump's first-term tax cuts may face greater resistance.
Does the MAGA camp need to choose sides? Republican base voters have begun to argue fiercely in three directions: supporting Trump, supporting Musk, or hoping for reconciliation.
Will the Democratic Party finally get an opportunity? Musk is no longer Trump's loyal ally, which may change the congressional oversight landscape.
This split is not just a personal grudge between two billionaires; it touches the core of American power structure, and its impact will continue to ferment in the coming months or even years. The market has already given an initial response: Tesla's stock price plummeted 14% on Thursday, creating the largest single-day drop since March 10.
