Austin, Texas — Billionaire Elon Musk announced plans on Saturday to launch a new political party, a decision stemming from his recent fallout with former President Donald Trump. The entrepreneur’s announcement comes as he criticized Trump’s domestic policy legislation, pledging to act on earlier threats if the bill was enacted.

Musk took to his social media platform, X, stating, “Our country is trapped in a one-party system that leads to financial ruin.” He declared the formation of the America Party, aiming to restore freedom to American citizens.

This startling revelation marks a significant shift for Musk, who has been a major financial backer of Trump’s 2024 presidential bid and served as a close advisor during Trump’s tenure. His discontent with the recent policy bill stems from concerns that it could balloon the federal deficit by trillions, a point he has voiced publicly.

The tension between Musk and Trump escalated dramatically following Musk’s critiques of the bill, which Trump signed into law on Friday. Though their relationship appeared to mend after Musk’s remorseful comments and the retraction of controversial posts, their differences became apparent again as negotiations over the bill intensified.

It remains uncertain how Musk’s proposed political party will be officially established, as registration with the Federal Election Commission is necessary. Recent filings do not show any initiative toward this formal process. Despite this, Musk has articulated a vision for a fiscally conservative agenda but has yet to detail the specific policies that will underpin the America Party’s platform.

Both Musk and Trump share similar stances on certain social issues, yet Musk has expressed that the Republican policies promote detrimental debt levels, referring to them as “debt slavery.” He aims to differentiate the America Party from traditional party lines, which he views as contributing to systemic financial issues.

The American political landscape is often criticized for its entrenched two-party system, which has historically resisted the emergence of third parties. Attempts in the past, such as Ross Perot’s independent run in 1992, have shown the challenges faced by new political movements, despite capturing a significant share of public support.

Political analysts warn that forming a viable new party is fraught with difficulties, including financial barriers and the reluctance of voters and candidates to shift allegiances. Musk has indicated aspirations for the America Party to become a strong influence in the upcoming midterm elections, with an initial focus on supporting selected candidates in key congressional races.

In a reciprocal response, Trump has hinted at reconsidering contracts held by Musk’s companies, labeling the Department of Government Efficiency—once led by Musk—as a potential threat to him. As the political landscape shifts with Musk’s new venture, the interactions between these two powerful figures will be closely watched by supporters and critics alike.