Tech billionaire Elon Musk’s outsize role in GOP politics is alarming China hawks in Washington — and they’ve already witnessed his power to block their priorities.
When Musk killed a government spending package last month — which he described as “criminal” and a waste of money — he also killed the passage of a long-debated measure to scrutinize American companies’ investments in sensitive Chinese industries, such as artificial intelligence, quantum computing and semiconductors.
The outbound investment screening bill, which was tucked into the original spending deal, was seen by supporters as essential for outcompeting China in a fierce technology race. The bill’s backers also hoped it would prevent U.S. firms from being complicit in human rights abuses or a Chinese military buildup. But there’s a new Congress now, which means lawmakers have to start the legislative process all over again. They will have to contend with different committee chairs, win support and try to find a legislative vehicle to enshrine it in law, however long that takes.
They’ll also have to hope Musk doesn’t block the effort this time — and that he doesn’t push incoming President Donald Trump to be more friendly with China.
“It must happen,” Texas Sen. John Cornyn, who has pushed for this kind of bill for years, told NOTUS last week.
“We can’t keep subsidizing the PRC and the CCP while they build their economy to compete with ours and rebuild their military and threaten peace in the Indo-Pacific,” he said. “It makes no sense. We’re completely blind right now and we shouldn’t allow that to happen.”
But in the same interview, Cornyn was a lot less willing to question Musk’s motives.
“No,” he responded flatly when asked if he had any concerns about Musk’s influence given his dealings in China. “He’s a constituent of mine.”
Musk didn’t focus on the outbound investment screening components during his social media tirade against the spending package, but top Democratic lawmakers alleged that it played a role. He has business interests in China, which would likely have been affected by the proposed rules because they involve artificial intelligence.
“It is particularly disturbing that Musk may have sought to upend this critical negotiated agreement to remove a bipartisan provision regulating U.S. investments in China in order to protect his wallet and the Chinese Communist Party at the expense of American workers, innovators, and businesses,” Rep. Rosa DeLauro, the top Democrat on the Appropriations Committee, wrote in a letter to congressional leaders.
A spokesperson for X, Musk’s social media website, did not respond to a request for comment for this story.
DeLauro still wants to pass the bill, even though she doesn’t see a clear path forward for it yet.
“I don’t know how quickly we can,” she told NOTUS last week. But “it’s necessary if we want to preserve our jobs and our technology here.”
Many Republican lawmakers feel the same way. It was a top priority for Speaker Mike Johnson and his staff throughout the spending talks. And Rep. John Moolenaar, the chair of the select committee on competition with the Chinese government, reintroduced the compromise plan at the end of the last Congress shortly after Musk tanked its chances — a message that he’s still focused on pushing it into law.
“America must stop the channeling of billions of dollars to Chinese companies blacklisted by the U.S. government for helping the CCP’s human rights abuses, strengthening its military and developing the next generation of national security threats from China,” Moolenaar said.
Supporters of the outbound investment screening bill will have one less opponent to deal with this year: Rep. Patrick McHenry, who retired at the end of the 118th Congress. McHenry chaired the Financial Services Committee and loathed this concept altogether.
“We’re for the time-tested rules of sanctions and our traditional ways of doing things,” McHenry told NOTUS on his way out of office. “What was negotiated was a complete breach of what we’ve done for the last hundred years in the United States. It’s bad policy.”
North Dakota Sen. Kevin Cramer said the bill wasn’t a “layup” for many lawmakers, who may have had philosophical reservations about limiting businesses. But “we are in a national security situation where we have to look at these international financial relationships going both directions,” Cramer said, so he did ultimately support it.
But did he have any concerns about Musk’s business involvement in China and the role he played in killing the spending bill?
“America’s full of people with conflicts of interest,” Cramer, a Republican, told NOTUS. “Some people just have a bigger megaphone than others.”
Cramer also said he doesn’t think Musk is under “any obligation” to share his conflicts of interest in debates like these.
“If Elon Musk supports autonomous vehicles or Elon Musk supports space programs or Elon Musk opposes restricting outbound investment, I don’t think he has to explain why. I think it’s clear,” he said.
“Everything we do has something to do with our self-interests,” Cramer added.
Michael Sobolik, a China policy expert and senior fellow at the Hudson Institute, said Musk’s interests in China are well known in the U.S. government. He accused Musk of “being a reliable voice for the Chinese Communist Party on issues from Taiwan to the Uyghurs, and just echoing narratives that are favorable for the party.”
“This is probably going to be a problem,” he told NOTUS of Musk’s influence.
A congressional aide familiar with the bill, who asked to speak anonymously, said supporters now hope it can pass early this year. This staffer expressed optimism, saying the compromise text that landed in the spending bill before Musk shot it down represented a solid path forward and addressed concerns from members.
If it came up tomorrow in the House, this aide said, “I’m sure it would pass overwhelmingly.”
Still, Republicans have a lot on their to-do list this year, and Musk has already demonstrated he’ll be keeping an eye on what moves through the Capitol.
The bill is not at the top of many lawmakers’ minds right now, either. Republicans are busy hammering out plans for a sweeping partisan policy package to enact Trump’s agenda, featuring border security provisions, tax cuts and legislation to scrap energy regulations. When asked, several members who spoke with NOTUS had no idea what the outbound investment plan was, admitting they hadn’t been following the debate closely.
And even if other members do know what it is, Sobolik noted, “No one wants to say mean things to Elon Musk.”
“The risk of upsetting him — do members want to take that risk?”
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Haley Byrd Wilt is a reporter at NOTUS.