LinkedIn co-founder Reid Hoffman has publicly accused Elon Musk of harboring a “serious conflict of interest” in his advisory role to President-elect Donald Trump, particularly concerning artificial intelligence policies. In a Friday op-ed published in The Financial Times, Hoffman raised concerns that Musk’s ownership of xAI, his fledgling AI startup, creates problematic dynamics as he guides the incoming administration on AI regulations and federal policies.
Hoffman, who also co-founded Inflection AI, warned that Musk could potentially leverage his position to benefit xAI unfairly through government contracts, encouraging federal agencies to target competing AI companies, or imposing export restrictions that would harm US technological competitiveness. “Using his position to favor xAI in any way… will come at the expense of US technological, economic and cultural security and competitiveness,” Hoffman wrote in his op-ed.
The criticism comes as Musk has become deeply embedded in Trump’s orbit following the November 5 election victory. Musk has been tasked with leading a new Department of Government Efficiency focused on reducing federal government size, spending considerable time with the president-elect and his transition team.
In his op-ed, Hoffman expressed mixed sentiments about Trump’s second term. While crediting the Biden Administration for leaving behind a “strong Democrat-engineered economy” and expressing hope that Trump could foster more business investments and AI innovation, he also voiced concerns about potential isolationist policies. Hoffman warned that a “mercantilist AI policy” could bar long-standing global allies from accessing US AI models, infrastructure, and technology, potentially stifling innovation in an increasingly networked world.
The public dispute highlights the bitter rivalry between Hoffman and Musk dating back to 2000 during the PayPal days, when Musk’s X.com merged with Confinity. Their feud has intensified recently over political differences, with Musk shifting toward the Republican Party and vocally supporting Trump, while Hoffman backed Vice President Kamala Harris’ campaign. Musk responded to the criticism indirectly, posting on X that he “instantly loses respect for anyone who posts on LinkedIn,” calling it “unbearably cringe,” though he didn’t directly address Hoffman’s conflict of interest allegations. Neither Musk nor Trump’s transition team responded to requests for comment on Hoffman’s specific concerns.
Key Quotes
With direct ownership in the fledgling AI start-up xAI, Elon Musk, who is advising Trump in many domains, has a serious conflict of interest in terms of setting federal AI policies for all US companies.
Reid Hoffman wrote this in his Financial Times op-ed, directly challenging Musk’s advisory role to Trump. This statement frames the core ethical concern about a private AI company owner influencing government policy that could benefit his own business interests.
Using his position to favor xAI in any way, such as awarding it government contracts, encouraging federal agencies to unfairly target AI companies, or imposing new regulations that limit exports will come at the expense of US technological, economic and cultural security and competitiveness.
Hoffman outlined specific scenarios where Musk’s influence could harm the broader AI ecosystem and US competitiveness. This quote illustrates the tangible ways conflicts of interest could manifest in policy decisions affecting the entire industry.
While Trump campaigned on the promise of making America more unilateral and insular, I continue to believe a pluralistic, multilateral approach is what creates innovation and prosperity in an increasingly networked world.
Hoffman expressed his broader concerns about Trump’s approach to international cooperation on AI development. This reflects industry debates about whether AI advancement requires global collaboration or protectionist policies to maintain US dominance.
I instantly lose respect for anyone who posts on LinkedIn. Unbearably cringe.
Musk posted this on X hours after Hoffman’s op-ed was published, appearing to mock the LinkedIn co-founder rather than addressing the substantive conflict of interest allegations. The response highlights the personal animosity between the two tech leaders.
Our Take
This public clash between two influential AI entrepreneurs reveals deeper fault lines in how America will approach AI governance and industrial policy. Hoffman’s concerns are legitimate—having a direct competitor shape the regulatory landscape creates obvious conflicts that could undermine fair competition and innovation. However, the personal history between these figures also complicates the narrative, making it difficult to separate genuine policy concerns from rivalry.
The real issue extends beyond Musk’s role: it’s about establishing transparent, conflict-free processes for AI policymaking at a crucial juncture. As AI becomes increasingly central to economic and national security, the Trump administration must balance industry expertise with ethical governance. The tension between protectionist and collaborative approaches to AI development will define America’s technological trajectory for decades. Whether Trump’s team can navigate these conflicts while maintaining US AI leadership remains the critical question that will impact not just tech companies, but the entire economy and society.
Why This Matters
This controversy represents a critical moment for AI policy formation in the United States as the incoming Trump administration shapes regulations that will govern the rapidly evolving artificial intelligence industry. The conflict of interest allegations raise fundamental questions about how AI policy should be developed and who should have influence over these decisions that will impact billions of dollars in investments and America’s technological competitiveness globally.
The stakes extend beyond personal rivalries between tech billionaires. With AI emerging as a strategic priority for national security, economic growth, and technological leadership, the potential for policy decisions to favor specific companies could distort market competition and innovation. Hoffman’s warnings about isolationist AI policies also highlight tensions between open collaboration with allies versus protectionist approaches that could fragment the global AI ecosystem.
For the broader AI industry, this signals uncertainty about the regulatory environment under Trump’s second term. Companies developing AI technologies need clarity on export controls, government contracts, and international partnerships. The outcome of these policy debates will shape whether the US maintains its AI leadership or faces challenges from competitors like China and the EU, making this a pivotal issue for the entire technology sector.
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