Elon Musk and The Rise of Cult Capitalism

Every billionaire is a policy failure. The first trillionaire is also a market failure.

If every billionaire is a policy failure, what then is a trillionaire? The world’s first is more than an unprecedented policy failure. It is also an unprecedented market failure.

At $1.32 trillion, Elon Musk’s net worth is no longer a measure of corporate earnings; it is an exercise in cult capitalism. His wealth is underwritten entirely by collective faith in his power to deliver a future that has not yet arrived. The market is not tracking traditional value—it is pricing belief. Musk’s fortune is the world's first trillion-dollar pitch deck.

Musk owns large stakes in Tesla and SpaceX, the market prices them, the total is his fortune. But look at what the market is appraising. SpaceX went public this month at a valuation near $1.77 trillion, the largest IPO in history. In 2025 it lost $4.9 billion, and the losses are accelerating: $4.28 billion in the first quarter of 2026 alone, against an accumulated deficit of $41.3 billion. Tesla, for its part, earned $3.8 billion last year, a profit but an ordinary one. Put the two together and the foundation of the largest personal fortune in human history ran a combined net loss in 2025.

To be up front, these are not worthless companies. But whether they’re worth something is the wrong question. In this respect they are no different from the carmakers, tech firms, and defense contractors they compete with. The real question is the gap: the trillions of dollars of value sitting above anything earnings or market conditions can explain, and what fills it. Are Musk’s companies truly special?

I built a chart to put this in perspective. It plots fortunes at one pixel per thousand dollars, and Musk’s bar runs on for an incomprehensibly long time. It is an absurd spectacle and a tragic one: a Mississippi-sized river of pixels and forgone futures, its banks strewn with everything our society could have built instead. The schools, the cures, the fed children, the economic security of millions. All of it routed into the net worth of one man.

Watch it play out below, or open the interactive version and scroll through it yourself.

What fills the gap is belief of a specific kind: faith in one man to deliver the future. Mars. Artificial general intelligence. A humanoid robot in every garage. The market is pricing a prophecy. And the prophet is also the asset. This is not people losing their minds. It is people behaving rationally, each in their own interest, who arrive together at something that looks like collective madness.

The cult of personality is an old feature of politics. What is new is watching one get priced into stocks. We have a rich vocabulary for economic bubbles: tulips, dot-coms, meme stocks, ponzi schemes, the recurring manias Keynes likened to a beauty contest in which everyone votes for the face they think everyone else will pick. But a classic bubble is diffuse. The mania attaches to a sector, an asset class, a vague conviction that things go up. No single person is the object of faith. That is precisely why classic bubbles correct: the fundamentals reassert themselves because nothing was holding them off but crowd psychology, and crowds, eventually, disperse.

What Musk has built is different. The belief is personalized. It attaches not to a sector but to him, and he is, at once, the operator of the companies, the prophet of their future, and the asset being valued. That collapses the mechanism that normally corrects market bubbles.

If you are wondering why Tesla’s board gives Musk whatever he asks for, this is why. From the outside, their capitulation looks like a catastrophic failure of corporate governance. From the inside, it is entirely rational. The board knows that Tesla’s valuation rests almost entirely on the man and his cult. Without Musk, Tesla is just a car company, worth a small fraction of its current market cap. The board is not failing to protect shareholder value. They have correctly understood what underpins the valuation.

The defining feature of cult capitalism is that it operates outside of conventional accountability mechanism. A balance sheet has to clear. A prophecy does not. So long as enough people believe, and believe specifically in Musk, the belief funds itself: it lowers his cost of capital, which lets him raise $75 billion in a single offering, which pays for the next improbable promise, which renews the belief. This is not a crowd groping toward the truth and overshooting. It’s a crowd getting rich, market fundamentals be damned.

The prophecy itself is thinner than the price implies. Where Musk’s companies have genuinely advanced, the advances came from the engineers he hired.¹ The clearest tell is the one he keeps repeating: he has been promising fully self-driving Teslas, any year now, for nearly a decade, while Waymo was running driverless taxis on public streets years before Tesla managed it. The prophet was not even first to market on his signature prophecy.

So pricing Musk’s companies so far above the norm means believing several improbable things at once. First, that his past performance does not merely predict the future but is dwarfed by it, that the best is still to come. Second, that he can keep recruiting the talent that does the actual building, even as the best young engineers, who have their pick of employers, watch his stiff armed salutes, his embrace of racist conspiracies, the courting of white supremacists, the public sport made of attacking trans people, and decide whether they want their names on the company whose AI started calling itself MechaHitler. And third, the steepest assumption of all: that Tesla and SpaceX will not merely conjure new markets into being, the household robot, the robotaxi fleet, but corner them, holding monopoly or near-monopoly share. The electric car was supposed to be precisely that kind of market. Instead BYD passed Tesla and the rest of the industry closed the gap. Inventing a market is hard enough. Owning it outright, against everyone who follows you in, is the sort of thing that exists only in investment pitches, not actual markets.

Democracy runs the opposite of a cult in order to function: accountability, deliberation, the rule of law. We have watched Musk override all three in real time: gutting federal agencies through DOGE, firing civil servants by fiat, turning his own platform into an instrument for destabilizing elections abroad. The state is just one more thing to disrupt. If none of it seems to make sense, that is because cults never do from the outside.

The hard-nosed Musk investor will say I am overcomplicating this, that the prophecy is beside the point and the real bet is far simpler. There’s something to that, and it may be the most grounded case for the valuation. Maybe the market isn’t betting on rockets and robots, but on access and political influence. Musk sits closer to state power than any industrialist in modern American history, and that proximity is a genuine asset: it wins contracts, shapes the regulations that bind his rivals, clears the field of competition. This week the Department of Justice intervened to back Musk in a corporate lawsuit; when you buy the stock, you are buying the state’s thumb on the scale. This is how you get rich in Putin’s Russia, by standing near the throne when the spoils are divided, not by inventing a market. On this reading, Musk is not a bet on genius. He is a bet on corruption.

My colleague Jacob Grumbach explains the dark bargain underpinning cult capitalism in a new working paper. A billionaire who owns both a media platform and a large, regulation-exposed business empire faces a calculation a normal media owner never does. Run the platform to maximize its own profit, and you produce the ordinary stuff of a functioning press: scrutiny, adversarial reporting, the accountability that holds the powerful to the law. But that accountability is precisely what taxes, regulates, and constrains the rest of your portfolio. So the rational move is to run the media firm into the ground, suppressing exactly the content that would discipline you, because authoritarian government pays a premium to concentrated wealth that ordinary democracy never will: lower taxes, slack antitrust, contracts steered your way, rivals kept out by decree.

Grumbach shows the size of that premium grows with your wealth. The richer you are, the more democracy costs you and the more its erosion is worth, which makes buying a $44 billion platform and destroying its value not a blunder but an investment. You are not paying for the platform. You are paying to disable the accountability the platform was supposed to produce. It is, in his framework, the same logic by which an investor who quietly owns two competitors stops wanting them to compete. The cult explains the valuation; the premium explains the politics.

Oligarchs do not retire; they fall out of favor—or on occasion out of the sky. Sometimes the patron turns on them: Khodorkovsky went from the richest man in Russia to a prison cell, Prigozhin from the Kremlin’s caterer to a crater in a field. Sometimes the political patron falls, and they flee. When Orbán lost power earlier this year, his oligarchs began fleeing Hungary, billions in tow, Mészáros reportedly bound for Dubai. For Musk, hitched to an unpopular American president, that is the likelier exit.

Musk did not invent this dynamic. He has simply mastered it more completely than anyone before him. The danger is not that the cult is irrational. Cults are internally coherent; that coherence is what makes them durable. The danger runs two ways. The largest personal fortune is built on a foundation that no longer pretends to rest on what anything earns, and we have stopped finding that problematic. And because the usual correction mechanism is gone, there is no soft landing built in.

The harder pill to swallow is that we are all holding the bag. It is the pension fund that holds the stock, the index that everyone owns, the faith that a number this large must have cleared some test we didn’t see. We are all holding a piece of the prophecy. And what it now buys is not a future of robots and rockets but the steady removal of everyone left with the standing to say the edgelord has no clothes.

1. To those of us who work with data for a living, Musk pairs profound ignorance with absolute confidence. He proposed to gauge Twitter’s hundreds of millions of users from a “random sample of 100 followers” of a single account: too small to mean anything, and, drawn from one follower list, not random at all. In March 2020 he predicted the U.S. would have “close to zero new cases” of COVID by the end of April, when the country was logging around 20,000 a day. Each time, he reached for the most elementary tool in someone else’s field and botched it in public, with total assurance. Worse is what follows correction: when his engineers explained that his posts had stopped reaching people because interest had simply waned, he fired the one who said it. In this he is unmistakably like Trump. Neither needs to be correct; they only need to be believed.