Elon Musk has done it. The world now has its first trillionaire, and he is not British. Let that sink in for a moment. While the City frets over gilt yields and the Bank of England dithers on interest rates, Musk has quietly (well, not quietly at all) amassed a fortune that exceeds the GDP of most nations. His ascent to the trillion-dollar club was sealed by SpaceX's latest contract to dominate global satellite communications, a deal that reportedly has Whitehall officials weeping into their Earl Grey.
Let us examine the numbers, because that is what I do. SpaceX, a private company that Musk controls with an iron fist, now commands a valuation north of $750 billion. That is roughly three times the market capitalisation of BP. Combined with Tesla's $1.2 trillion market cap (still wobbling, but resilient), Musk's personal stake is conservatively estimated at $1.05 trillion. This is not money in the bank, of course. It is paper wealth, locked up in equity that could evaporate in a market correction. But for now, he sits atop a pile of assets that would make Midas blush.
How did a South African born, Canadian educated, American domiciled entrepreneur beat the British establishment? Simple. He took risks. While our pension funds ploughed money into infrastructure bonds yielding 2%, Musk bet on rockets that explode, tunnels that flood, and electric cars that struggled to turn a profit. He lost billions and came back for more. Now SpaceX launches more tonnage into orbit than every nation on Earth combined. The British backed this? Yes, to our credit. UK government contracts and British investors (including the sovereign wealth fund via indirect holdings) helped seed his early ambitions. But the returns flow to California, not Threadneedle Street.
What does this mean for the UK? First, it is a stark reminder of our missed opportunities. We had the industrial revolution, the financial engineering, the empire. Now we have a tech sector that is a shadow of Silicon Valley. Our unicorns are few, and our billionaires are mostly in hedge funds or inherited wealth. Musk's success underscores the capital flight problem. British venture capital is risk averse. We prefer steady dividends to moon shots. Meanwhile, our brightest engineers are poached by American firms offering stock options. The brain drain continues, and with it, the tax revenue.
Second, consider the inflationary implications. A trillionaire is not just a curiosity; he is a force. Musk's wealth, if monetised, could buy a significant chunk of UK gilts. More likely, he will hoard it in assets that hedge against currency debasement. Cryptocurrency, real estate, maybe even a few football clubs. That puts upward pressure on asset prices, exacerbating wealth inequality. The Bank of England may be fighting inflation in consumer goods, but on the top end, Musk is a walking 3% surcharge on luxury assets.
Finally, there is the question of fiscal responsibility. Government spending is out of control. The public debt to GDP ratio is over 100%. Yet we subsidise green energy projects that benefit Musk's Tesla and SpaceX. Taxpayers are effectively funding the wealth of the world's richest man. Is this efficient? No. It is a transfer from the many to the one. If the Treasury had any sense, they would redirect those subsidies into British start-ups. But no, we are addicted to the prestige of backing a global winner, even if the winnings go elsewhere.
In the City, we are accustomed to volatility. The FTSE 250 has its ups and downs, bond yields dance to the tune of inflation expectations. But Musk is a different beast. He is not a stock; he is a market unto himself. When he tweets, currencies tremble. When he announces a new venture, entire sectors shift. The Bank of England has no control over that. Nor does the FCA. We are passengers on this ride.
What are the lessons? One, diversify. Do not put all your faith in the British establishment. Two, embrace risk, sensibly. The next trillionaire might be British if we nurture our mavericks. Three, expect more of this. The twenty-first century will belong to individuals who can mobilise capital without borders. Musk is just the first. The City of London needs to adapt, or it will be left behind, trading relics while the new wealth soars to Mars.
For now, raise a glass to Musk. He has done what no one else has. But do not expect a knighthood. That honour is reserved for those who play the game, not rewrite the rules.
