NED has long funded groups working to combat the Chinese Communist Party by exposing its human rights abuses and supporting anti-communist efforts in China. For this reason, conservative China hawks have long supported the organization, with U.N. Ambassador Nominee Elise Stefanik, formerly one of China’s fiercest critics in the House, at one point sitting on its board of directors. Republicans and Democrats have long held a consensus that NED is an important tool for advancing American interests.

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With a new administration in town, however, that consensus appears to be waning. 

Musk, who exerts considerable influence over the Trump administration and has called himself “kind of pro-China,” earlier this month described NED as an “evil organization” that “needs to be dissolved.” On this point, Musk and the CCP are in agreement.

The Chinese government has long accused NED of being a covert arm of U.S. intelligence agencies. An August 2024 report released by China’s Ministry of Foreign Affairs accused NED of promoting coups, rigging elections, promoting false information, and otherwise inciting division globally. A spokesperson for the Chinese Embassy has called NED a threat to “world peace and stability.”

Musk’s business ties to China run deep. In 2024, China represented 36.7% of Tesla’s car sales, making access to Chinese markets crucial to the billionaire. Tesla also works with CATL, a Chinese battery manufacturer that was recently added to the Pentagon’s list of “Chinese military companies,” to supply parts for its vehicles. 

Tencent, another “Chinese military company” according to the Department of Defense, disclosed a roughly five percent stake in Tesla in 2018, with CNBC reporting in 2023 that it sold “some” of its Tesla shares. Tesla has also received over half a billion dollars in loans from Chinese state-owned banks and a tax break from the CCP. Tencent denied it was a Chinese military company in a statement provided to the Washington Examiner earlier this month.

The CCP’s opposition to NED is understandable as the group has thrown massive amounts of resources into fighting Chinese communism. NED’s website states that it spent roughly $10 million during the 2023 fiscal year across 55 different projects in China. These operations included funding organizations documenting the Uyghur genocide and aiding Tibetans in resisting China’s occupation. 

Tesla opened a showroom in Xinjiang, the province where Uyghurs face human rights abuses, in 2022.

NED also funds domestic groups working to combat China, tax documents show. 

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China Digital Times, a California-based nonprofit bi-lingual news organization that publishes news items censored by the Chinese regime as well as leaked Chinese documents, received just over $1 million from NED during the 2023 fiscal year. Other groups opposing the CCP, such as those advocating for Uyghurs, Tibetans, and Chinese political dissidents, received hundreds of thousands more from NED over the same period.

The International Republican Institute and the National Democratic Institute for International Affairs, aligned with their eponymous political parties, are two of NED’s biggest grantees, collectively receiving well over $70 million for it during the 2023 fiscal year. Both organizations have also expended considerable resources combating the CCP, even earning formal sanctions from the Chinese government over their support of pro-democracy activists in Hong Kong.

NED’s grantees have “exposed the Uyghur genocide as well as the Chinese Communist Party’s network of overseas police stations bringing their tools and techniques of coercion and repression into free societies, including here in the United States,”  NED president Damon Wilson said to the Free Press.

The Musk-backed attack on NED has proved effective thus far.

“It’s been a bloodbath,” one NED staffer told the Free Press. “We have not been able to meet payroll and pay basic overhead expenses.”

NED informed the organizations it funds on Wednesday that payments will be ceasing immediately, according to a memo obtained by Politico. 

While NED funds both conservative and liberal efforts to advance American interests abroad, some of its operations have come under partisan criticism

One of the brightest flashpoints followed a Washington Examiner investigation revealing that NED had funded a group called the Global Disinformation Index, which disseminated a list containing conservative news outlets to advertisers, advising them to blacklist the publication. Congressional Republicans probed and criticized NED following the Washington Examiner report.

Some conservatives, however, maintain support for the institution.

“The notion that NED is a bastion of woke would come as a great surprise to the Reaganites who backed it,” NED board member Daniel Fried said in a statement. 

Experts across the political aisle have also criticized the Musk-based USAID freeze as a boon to China as it will allow the communist country to influence other countries without an American counterweight.