By Matt Peterson
A few years ago, I sat down with a top executive from one of the world's biggest tech companies. We met at his firm's well-appointed New York offices, overlooking the United Nations campus. He was just back from China, which was then in the midst of a tariff war with the Trump administration. Russian hackers had recently targeted the company.
And yet, the executive assured me, his company was "not a country," and it was a mistake to think about it in geopolitical terms. Foreign policy was the domain of governments like the U.S. That attitude helped keep regulators off the company's back, and let it do business globally even as geopolitical tensions spiked.
It's also an idea Elon Musk might benefit from pondering, if he can find time between running Tesla and SpaceX and overseeing his ownership of X.
The tech billionaire is at the center of global controversy -- not for the first time -- because of his involvement in Ukraine. Unless Musk puts some separation between his personal politics and his business practices, which a glance at his posts on the platform formerly known as Twitter suggest might be tough for him, then this kind of thing is going to keep happening.
The current dispute involves events that unfolded in September 2022 and are related in Walter Isaacson's new biography of Musk, due to be released on Sept. 12. Early in the war, Musk provided Ukraine with thousands of Starlink satellite-internet terminals, allowing its government, including the military, to continue to communicate despite Russian cyberattacks. Then in September, Musk got wind of a Ukrainian plan to use drone submarines to attack the Russian fleet in Crimea, which President Vladimir Putin's forces have occupied since 2014. Musk believed the attack would escalate the risk of nuclear war and deactivated Starlink access near the Crimean coast. Without access to Starlink, the Ukrainian attack failed.
An excerpt of Isaacson's book was published in the Washington Post Thursday after CNN earlier reported the story. Musk confirmed most of the key details in a post on X, adding that the Starlink satellites in the region weren't activated. Ukrainian authorities had asked him to activate the satellites in the region, Musk said, and he declined to.
Musk didn't respond to a request for comment through SpaceX's media team.
Musk, in Isaacson's telling, was frustrated by the whole affair. "How am I in this war?" Musk asked. The answer should be obvious, even to Musk: He is in the war because he personally inserted the company he controls into the conflict. That's an important difference between Musk and other tech giants. The businesses he runs are all about him, which means what affects one matters for all of them.
That control is a political and financial liability for Musk. Tesla stock has repeatedly fallen when episodes involving Musk's decision-making at X have come to light. Tesla shares were down more than a percentage point today.
The issues go beyond Ukraine. As China analyst Isaac Stone Fish wrote in Barron's , Musk's businesses have a big footprint in China. "Musk has one of the closest relationships with Beijing of any American business leader, and at the same time, provides the Pentagon with technology that could help the U.S. military defend the Taiwan Strait," Fish wrote.
The tense geopolitical climate could make that balancing act untenable. The issue has already come up in the GOP presidential race, where connections to China can be seen as toxic.
Both the U.S. and China have taken steps recently to clamp down on businesses they see as intruding too far into sensitive political territory. Those new restrictions have primarily targeted chip makers, AI companies, and other areas of advanced tech. Musk's businesses are a level removed, but the current fight shows just how quickly a business can switch from being politically inert to becoming radioactive, said Ed Price, geopolitical strategist at the consultancy Ergo.
"America's corporates are hesitating. Is Uncle Sam really going to dismantle the world he built in order to face Russia and China down? Musk personifies this hesitancy," said Price.
The idea that tech companies aren't countries is a way of allowing that hesitation to continue. They don't have political positions that would draw them into global conflicts, at least in principle.
Musk and his businesses are something else entirely. That's not only risky for Musk. It threatens to pull down the whole facade that keeps global business and politics separate.
It can also be lethal.
Write to Matt Peterson at matt.peterson@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
September 08, 2023 18:13 ET (22:13 GMT)
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