Elon Musk’s Inner Circle Pours Millions Into Psychedelics As MDMA Therapy Push Gains Momentum This Year

SAN FRANCISCO — A growing number of prominent figures within Elon Musk’s personal and professional orbit have been directing significant financial resources toward psychedelic therapeutics companies, part of a broader push to move drugs like MDMA and psilocybin from the fringes of medicine into mainstream mental health treatment.

According to The Wall Street Journal, the trend reflects a convergence of personal enthusiasm and financial investment among a small but influential group of billionaires and executives connected to Musk, several of whom have spoken publicly about their own experiences with psychedelics or their belief in the drugs’ therapeutic potential.

Antonio Gracias, a longtime Musk ally, former Tesla board director and adviser to Musk’s Department of Government Efficiency initiative, has emerged as one of the most active figures in the space. Gracias made a bid earlier this year to acquire a controlling stake in Lykos Therapeutics, the pharmaceutical company formerly known as MAPS Public Benefit Corp. that has been working to bring MDMA-assisted therapy to market for the treatment of post-traumatic stress disorder. According to Psychedelic Alpha, Gracias has since been joined in that effort by Sir Christopher Hohn, the British hedge fund manager who leads TCI Fund Management, one of the largest hedge funds in the world with more than $60 billion in assets under management.

Gracias’s involvement in the space reportedly began with a chance meeting at Burning Man with Rick Doblin, founder and president of the Multidisciplinary Association for Psychedelic Studies, the nonprofit research and advocacy organization that originally spun off Lykos Therapeutics as its for-profit pharmaceutical arm. That connection took on added significance after Lykos suffered a significant setback in 2024, when the Food and Drug Administration denied the company’s application to market MDMA for PTSD treatment, citing inadequate clinical trial data.

Beyond his interest in Lykos specifically, Gracias has also directed philanthropic resources toward academic research in the field. In 2023, the Gracias Family Foundation gifted funds to Harvard University to establish a program dedicated to the Study of Psychedelics in Society and Culture, reflecting an effort to build institutional credibility for the field beyond purely commercial drug development.

Gracias is far from the only figure in Musk’s broader circle with financial exposure to the psychedelics industry. PayPal co-founder Peter Thiel is a major investor in Atai Life Sciences, a biotechnology company that itself holds a significant stake in Compass Pathways, a company focused on developing psilocybin-based therapies for treatment-resistant depression. Google co-founder Sergey Brin, who has reportedly discussed his own use of psychedelic mushrooms, has helped fund Soneira, a startup developing psychedelic treatments based on ibogaine, a compound derived from the iboga plant that has drawn increasing research interest for its potential in treating addiction and other conditions. OpenAI chief executive Sam Altman has also discussed his own experiences with psychedelics helping him manage anxiety and has separately invested in psychedelic therapy companies.

Musk himself has been notably open about his views on psychedelics over the years, expressing public support for the drugs’ potential therapeutic value even as he has also publicly disclosed using ketamine, a related dissociative compound, under a prescription he has said he uses to manage depression. Musk has previously argued publicly that societal attitudes toward psychedelics are likely to shift as younger generations move into positions of political influence, a view he articulated during a 2021 interview, saying he believes people should generally be open to psychedelics and that lawmakers from an earlier era will gradually be replaced by those more receptive to the drugs’ potential benefits.

The broader psychedelics investment landscape has continued expanding well beyond Musk’s immediate circle. Venture capital fund Palo Santo closed a $50 million fund dedicated specifically to backing emerging psychedelic therapeutics companies, with the fund currently maintaining a portfolio spanning more than 20 companies across the broader psychedelics ecosystem. Palo Santo co-founder Tim Schlidt has framed the fund’s mission in terms of addressing a growing global mental health crisis through what he and other backers view as a coming shift in the standard of care.

“Against the backdrop of a growing global mental health crisis, our mission is to drive clinical development and FDA approval of these much-needed therapies that we believe will become the future standard of care,” Schlidt said.

Julie Holland, a physician and adviser to the Palo Santo fund, echoed that sense of urgency around funding.

“It’s crucial that the most promising companies and therapies receive the funding needed to advance psychedelic medicines through clinical trials in a timely manner, and I am proud to be part of a team of experts who share that same goal,” Holland said.

The renewed institutional and celebrity interest in psychedelics comes amid a broader cultural shift in how the drugs are perceived, following decades in which they remained largely relegated to underground or purely recreational use following their prohibition in the 1970s. Oregon and Colorado, along with several U.S. cities, have moved to decriminalize psilocybin, the active compound found in so-called magic mushrooms, with Oregon going further to legalize its supervised use. Pharmaceutical companies have also found commercial success with related compounds already approved for medical use; Johnson & Johnson’s nasal esketamine treatment, Spravato, became the company’s fastest-growing product at one point, generating hundreds of millions of dollars in sales within a single nine-month period.

Despite the growing enthusiasm and capital flowing into the sector, the regulatory path for psychedelic-assisted therapies remains far from settled, as illustrated by the FDA’s 2024 rejection of Lykos Therapeutics’ MDMA application. That setback has not deterred figures like Gracias and Hohn from continuing to pursue investment in the company, betting that additional clinical trial data and continued advocacy could eventually clear the path toward regulatory approval.

With billionaires spanning the technology, finance and artificial intelligence industries now directing substantial personal wealth toward psychedelic drug development, alongside dedicated venture funds like Palo Santo building out broader portfolios across the sector, the psychedelics industry appears positioned to continue attracting significant capital in the years ahead, even as questions remain about how quickly, and how thoroughly, these compounds can move from high-profile private investment interest into broadly accessible, FDA-approved medical treatments.