Donald Trump threatened on Thursday to cut off government contracts to Elon Musk's companies and the world's richest man suggested the U.S. president should be impeached, marking a stark end to an unlikely alliance and leaving onlookers wondering what was next.

The hostilities between the former allies intensified when the president criticized Tesla CEO Musk in the Oval Office and the pair then lobbed verbal barbs at each other on their social media platforms: Trump's Truth Social and Musk's X.

Is it time to create a new political party in America that actually represents the 80% in the middle?
— Elon Musk (@elonmusk) June 5, 2025

"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts," Trump posted.

Tesla shares closed down over 14% on Thursday, losing about $150 billion in market value in the largest single-day decline in value in its history.

Minutes after the closing bell, Musk replied, "Yes," to a post on X saying Trump should be impeached, an unthinkable move in Congress where Trump's Republicans hold majorities in both chambers.

The trouble between the two started brewing days ago, when Musk denounced Trump's sweeping tax-cut and spending bill.

Is it time to create a new political party in America that actually represents the 80% in the middle?
— Elon Musk (@elonmusk) June 5, 2025

The president initially held his tongue while Musk campaigned to torpedo the bill, saying it would add too much to the nation's $36.2 trillion in debt.

Trump broke his silence on Thursday, telling reporters he was "very disappointed" in Musk.

"Look, Elon and I had a great relationship. I don't know if we will anymore," Trump said.

As Trump spoke, Musk responded in real time on X.

"Without me, Trump would have lost the election," wrote Musk, who spent nearly $300 million backing Trump and other Republicans in last year's election.

In another post, Musk asserted that Trump's signature tariffs would push the U.S. into a recession later this year.

Musk's businesses also include rocket company and government contractor SpaceX and its satellite unit Starlink.

Musk, whose space business plays a critical role in the U.S. government's space program, said that as a result of Trump's threats he would begin decommissioning SpaceX's Dragon spacecraft. Dragon is the only U.S. spacecraft capable of sending astronauts to the International Space Station. Late on Thursday, Musk backed off the threat.

And in a sign of a possible detente to come, Musk subsequently wrote: "You're not wrong," in response to billionaire investor Bill Ackman saying Trump and Musk should make peace.

PUNCHING BACK

Trump and Musk are both political fighters with a penchant for using social media to attack their perceived enemies, and many observers had predicted a falling out.

Musk had become one of Trump's most visible advisers as head of the Department of Government Efficiency, which mounted a sweeping and controversial effort to downsize the federal workforce and slash spending.

After leaving that role, Musk this week targeted what Trump has named his "big, beautiful bill", calling it a "disgusting abomination" that would deepen the federal deficit.

His attacks amplified a rift within the Republican Party that could threaten the bill's prospects in the Senate.

Nonpartisan analysts say Trump's bill could add $2.4 trillion to $5 trillion to the nation's $36.2 trillion in debt.

A prolonged feud between the pair could make it harder for Republicans to keep control of Congress in next year's midterm elections if it leads to a loss of Musk's campaign spending or erodes support for Trump in Silicon Valley.

"Elon really was a significant portion of the ground game this last cycle," said a Republican strategist with ties to Musk and the Trump administration who spoke to Reuters on condition of anonymity.

"If he sits out the midterms, that worries me."

On Tuesday, Musk posted that "in November next year, we fire all politicians who betrayed the American people."

Musk had already said he planned to curtail his political spending in the future. Musk's increasing focus on politics provoked widespread protests at Tesla sites, driving down sales while investors fretted that Musk's attention was too divided.