analysis
Price explosion on the stock market
Nuclear deal makes Trump $500 million richer
Trump enters the nuclear energy business with his company. This increases his wealth by $500 million – and further blurs the boundaries between office and personal interests.
Critics often accuse Donald Trump of mixing his financial interests as a businessman with his duties as US President. They should now feel encouraged by the latest deal from the self-proclaimed “deal maker”.
Nuclear energy for artificial intelligence
The Trump Media and Technology Group (TMTG) announced on Thursday a merger worth more than six billion dollars with the energy company TAE Technologies – one of several dozen companies worldwide that want to use nuclear fusion technology to produce electricity.
Founded in 1998, the company is one of the oldest private companies in the world specializing in nuclear fusion, according to the Wall Street Journal. TAE is backed by Google and energy giant Chevron and has raised over $1.3 billion in private capital, including from Goldman Sachs.
TMTG and TAE have ambitious plans, as they want to start building the “world’s first industrial-scale nuclear fusion power plant” next year. TMTG boss Devin Nunes hopes that this will reduce electricity prices in the USA and better cover the energy needs of artificial intelligence (AI).
Nuclear fission and nuclear fusion are two different ways of obtaining energy from atomic nuclei: During nuclear fission, heavy atomic nuclei, such as uranium, are split and release energy. This technology is now used in nuclear power plants, but produces long-lasting radioactive waste.
During nuclear fusion, light atomic nuclei, such as hydrogen, fuse together. This process delivers even more energy, produces significantly less long-lived radioactive waste and is considered very safe. However, the technology is not yet ready for the market.
Massive price reaction in Trump shares
On the US technology exchange Nasdaq, the TMTG share then made a huge leap upwards – in the end there was an increase of 42 percent to $ 14.86. According to Forbes, Donald Trump’s net worth increased by more than $500 million in one fell swoop – he is now $6.8 billion rich.
A few million more could be added today, as TMTG shares continue to rise in pre-market US trading. In the previous weeks, the stocks had come under pressure and had lost more than 40 percent since October.
Who is in control of Trump Media?
Trump founded TMTG in February 2021 after he was banned from Twitter following his supporters’ storming of the US Capitol on January 6, 2021. TMTG’s core project has so far been the social media app “Truth Social”, US President Trump’s online announcement organ.
After being re-elected to the White House, Trump – unlike his predecessors – did not transfer his assets to an independent trust fund, a “blind trust”. Instead, his son Donald Trump Jr. manages his father’s assets. However, Donald Trump remains the sole donor and beneficiary – and can continue to generate income from his companies. A sharp dividing line between private business and public office looks different.
A qualified blind trust, as required by the Ethics in Government Act of 1978, is a trust in which the owner (“trustor”) has no control, knowledge or influence over the management and selection of individual assets. He only receives a quarterly report on changes in value, without learning details about transactions or investments.
For example, Jimmy Carter transferred his peanut farm to a blind trust. Lyndon B. Johnson, Ronald Reagan, Bill Clinton, George Bush and his son George W. Bush also used blind trusts during their presidencies.
Trump is committed to AI
And with this deal with TAE, businessman Trump’s financial interests could also mix with his office as US President. Because as US President, Trump is relying heavily on artificial intelligence – and in doing so will also drive up energy consumption in his own country.
It was only in November that the Republican launched the “Genesis Mission” AI initiative. On Thursday, the US government announced that it had secured support from technology companies such as Microsoft, Google and Nvidia.
How Trump makes himself vulnerable
The goal of “Genesis Mission” is to use artificial intelligence (AI) to accelerate scientific research – and strengthen the energy supply and national security of the USA. Trump has made winning the AI race against China a priority.
So is Trump abusing his office in unprecedented ways to enrich himself personally, as critics accuse him of doing? With his latest nuclear energy deal, his AI initiative “Genesis Mission” and the simultaneous waiver of a “blind trust,” Trump is definitely making himself vulnerable.
