Until now, tech billionaire Elon Musk’s power to impact international security was striking—and yet limited. Regarding Ukraine, he allowed it to keep using Starlink, his satellite-based internet service, while also imposing restrictions so that it would not be used to wage counter-offensives against Russia. In the US-China relationship, he, like other businesspeople, was a chess piece in the great power struggle. Musk forged deals with Shanghai province authorities to build his largest Tesla factory in the city and met with Chinese President Xi Jinping. At the same time, Musk’s thousands of satellites and in particular the military version of Starlink—Starshield—has given the United States an advantage in space security compared to competing nations.
But Musk also felt the boundaries of his power. Musk’s X (the social media platform that was formerly Twitter) ran counter to the European Union and its regulations, which the company sought to weaken. Within that context, Musk had a spat on X with Thierry Breton, of the European Commission who, until his resignation in September, was responsible for the European single market. Breton took Musk to task over X’s violation of the EU’s Digital Services Act. In this case a European court will be the final arbiter.
A similar thing happened in Brazil. The country’s supreme court reined in Musk’s ambitions, blocking domestic access to the X platform until Musk budged under pressure. He paid a hefty fine and has since complied with Brazilian law.
However, those were the times when Musk only represented his companies. As he looks set to become something of a tech czar in US President Donald Trump’s second administration, his power will increase substantially. Trump might not always follow his advice—Musk was unable to push through his choices for cabinet positions. Nevertheless, even if Musk imposes his will in only a small number of cases, his impact on European security could be profound.
A Realist Who Is also a Salesman
Up until 2025, all of Musk’s companies had a combined revenue that was worth less than 1 percent of America’s GDP. With the start of the Trump II administration, his actions on behalf of the US government will have the combined $27 trillion weight of the US economy behind him. Whenever he speaks with the EU on tech policy or security for Ukraine, the position vis-à-vis China or Starlink satellites, this fact will be on the back of European minds.
In short, Europe will be unable to push back as forcefully as before, even if some leaders, such as Italian Prime Minister Giorgia Meloni have a close relationship with Musk. Even after the 2024 US presidential election, the European Commission was still confident that it would enforce X’s potential violations of the Digital Services Act and implied that even Musk himself could be liable. However, the EU punishing X for spreading Russian propaganda might be off the table in the future, since US retaliation might be looming on the horizon.
Musk takes a “realist” stance on foreign policy. He mostly cares about perceived power. In August 2024, during a long interview on X with Donald Trump, Musk continuously posited his worldview: “I think it’s just worth emphasizing to listeners [the] immense importance of whether the United States president is intimidating or not intimidating and how much that matters to global security.” He continued by saying that “[t]here’s some real tough characters out there. And if they don’t think the American president is tough, they will do what they want to do. And that puts the whole world in danger… [P]eople like, […] Kim Jong-un, they respond to strength, not weakness.”
In Musk’s mind, his businesses go hand in hand with increasing US relative power. The more products he sells, the better the US will be doing. This is because his companies are carriers of the United States’ international prestige. To his mind, the more SpaceX satellites are in the orbit, the more dictatorial leaders around the world will respect the US. Musk implicitly hopes to make this happen via deregulation; it would propel US power, kickstart the development of new technologies in the US, whether by building underground tunnels for freight trains (The Boring Company) or by discovering new drugs with the help of artificial intelligence (xAI). These prestige projects could compete with other nations’ flagship projects, such as high-speed trains in China, which propagate power internationally.
Recommendations for Europe
Europe, meanwhile, is faced with three major challenges, all of which Musk might further deepen or complicate: US retaliation for EU big tech regulation; the risk of a bad Ukraine peace deal; further discrimination against European automakers in China.
Technological power: Previously, Europe could regulate US tech companies without major consequences. However, with Musk close to the levers of power, US retaliation for any such action looms on the horizon.
Therefore, Europe needs to divest resources from regulation to technological innovation and competition. This does not mean deregulation as such, but it should entail thinking twice about the need for additional regulation. The funds freed up by this new focus should be used, with the advice of experienced investors and founders, to identify companies that would legitimately need additional funding to scale further, thus averting the sale of tech startups to either the US or China. With a reinvigorated high tech industrial base, European security challenges could be managed from a position of strength. In this vein, the EU took some important steps in December 2024 with the launch of its IRIS²satellite constellation, that will likely reduce dependence on Musk and allow for the provisions of secure government and commercial services in the EU as of 2030.
Russia: Musk’s greatest (and possibly excessive) fear appears to be nuclear escalation with Moscow. Russia is also a potential market for Musk, but one that has been—since the Kremlin launched its full-scale war against Ukraine—cornered by China. If Musk does have influence on the US stance on Ukraine, he will be yet another person pleading for a peace deal—one that benefits his business interests.
As a result, Europe needs to double down on strengthening Ukraine before a Musk/Trump “deal” with Russia. It needs to do so by supplying additional weapons and easing targeting restrictions for Ukrainian-launched missiles.
China: Musk’s extensive business ties with China will likely be a calming factor in US-China relations. For his business to thrive inside China, he needs to demonstrate to Beijing that he can influence the US away from a China decoupling and containment policy.
For Europe, such a “Musk effect” may mean that it will not be immediately forced to adopt a more adversarial stance vis-à-vis Beijing. However, major European car producers might suffer if Musk’s Tesla receives increasingly preferential treatment, due to his influence on US foreign policy. In such a Chinese market, European automobile companies will be marginalized even more quickly than at present. Hence, European carmakers need to hatch a plan as to how they would compete in a Chinese market, where not only Chinese companies get preferential treatment, but also increasingly Tesla. Europe should make it clear to China that current EV tariffs might go up if the disadvantages European carmakers face in China were to increase.
Europe should use the challenge that Musk will pose as an opportunity to bring about a change in its strategic mindset. Brussels, Berlin, and Paris have been complacent for far too long, content to be No. 3 behind the US and China in economic, military, and technological terms. At least when it comes to emerging technologies, Europe needs to seriously strive to become No. 1 and enhance its regulatory power with raw technological power.
This article is a preview of our IPQ Winter 2025 issue, out in early January.
Valentin Weber is a senior research fellow at the German Council on Foreign Relation’s (DGAP) Center for Geopolitics, Geoeconomic, and Technology.
