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Mr. Lutnick emerged as Mr. Trump’s pick to run the Commerce Department. Mr. Ramaswamy decided to step aside from the project just before Mr. Trump assumed office on Monday.

As a result, Mr. Musk, the world’s richest man, now has full command of the federal cost-cutting effort, which Mr. Trump has hailed as “potentially, ‘The Manhattan Project’ of our time.” How exactly Mr. Musk wields his consolidated power to set the tempo and targets of the so-called Department of Government Efficiency remains to be seen. But his first moves suggest he will oversee something closer to an I.T. project than the sweeping operation to slash at least $2 trillion from the federal budget that Mr. Musk had once predicted.

The Musk-led project debuted this week with a bit of bureaucratic jujitsu: the takeover of an existing arm of the White House that, for the past decade, had focused on improving government technology. The office, the United States Digital Service, now renamed United States DOGE Service, was created in 2014 to fix failing computer systems that threatened the success of President Barack Obama’s health insurance overhaul.

Mr. Musk, who cut 80 percent of the jobs at Twitter after he bought the social media company two years ago, aims to conduct a review of at least some of the roughly 200 employees who work in the office before deciding whether to keep them in their jobs, according to two people familiar with his plan, who spoke on the condition of anonymity to describe internal plans.

From this new perch in the administration, Mr. Musk immediately gains a road map to the federal bureaucracy, which could allow him to swiftly assess the technological capacities of agencies and departments and identify potential changes. He is also expected to maintain an office in the West Wing, which will help him keep crucial access to Mr. Trump and key White House aides. Mr. Musk’s allies, meanwhile, have secured key posts in the administration. Amanda Scales, who until this month worked at Mr. Musk’s artificial intelligence company, xAI, is now chief of staff at the Office of Personnel Management, a powerful agency that oversees government hiring.

Mr. Musk posted a meme last week on his social media platform, since renamed X, that hinted at grand ambitions for his new project, comparing his looming effect on government to his company’s innovation of rockets that fuel space travel.

“What matters going forward is to actually make significant changes, cement those changes and set the foundation for America to be strong for a century, for centuries, forever,” Mr. Musk said at a Trump rally in Washington on Sunday.

But the decision to rebrand the former digital office into DOGE also signals the potential limits of the endeavor, budget experts said.

Mr. Trump initially said his government overhaul would “cut wasteful expenditures” and “slash excess regulations,” but those goals were not explicitly laid out in the order on Monday that created the new group.

DOGE has been tasked with recommending cuts to the federal work force in the next 90 days and playing a key role in overhauling hiring practices within four months.

But the office does not have the power to approve spending cuts — that authority remains with Congress.

Romina Boccia, the director of budget and entitlement policy at the libertarian Cato Institute, said focusing on modernizing government technology could help address issues like improper payments. But she said that would be likely to save only a couple hundred billion dollars at most, far less than Mr. Musk had promised.

“The cynic in me says that DOGE realized that they were perhaps too ambitious and it would be much more difficult to accomplish their initial goals of reducing spending by $2 trillion,” Ms. Boccia said. “They’re narrowing their scope to something more manageable.”

A White House spokeswoman did not respond to a request for comment. A spokeswoman for Mr. Musk declined to comment.

During last year’s presidential campaign, Mr. Musk said DOGE could cut the $6.75 trillion federal budget by at least $2 trillion, or about 30 percent. More recently, he has lowered his estimate to closer to $1 trillion. During the first Trump administration, spending jumped to nearly $8 trillion from about $5 trillion, an increase due in part to Covid-19 relief efforts. Heading into his second term, Mr. Trump has vowed to avoid cuts to Social Security and Medicare, which account for about a third of federal spending.

Still, some experts on the federal government said DOGE’s influence could be substantial because Mr. Musk and his allies will operate from within the federal government, rather than outside. Mr. Trump’s order called for “DOGE teams” to be embedded within federal agencies like the I.R.S., a change from Mr. Trump’s original plan to have the group based mostly outside the government to offer advice to White House budget officials. Most DOGE staff members will now be full-time government employees, according to a person familiar with the plans.

“It brings DOGE inside and connects it with every federal agency, in ways that could have sweeping impact,” said Donald F. Kettl, a former dean of the University of Maryland School of Public Policy.

Simplifying government systems could also be a tool that results in substantial benefits for taxpayers, said Mina Hsiang, the most recent administrator of the Digital Service, noting that better technology could help people to file taxes or gain access to veterans’ benefits.

“If they choose to work on the everyday problems that impact all Americans, they could accomplish a lot,” said Ms. Hsiang, who was appointed to the role during the Biden administration. “If they work on programs that put them in a deeply adversarial position with agencies, I think they will be less likely to get important things done.”

The full extent of how DOGE works and what it does may end up shielded from the public. Mr. Musk hopes to join the administration as a special government employee, according to a person familiar with his plan, a designation intended to avoid triggering a transparency law requiring government panels that include private citizens to conduct their meetings in public and make their documents available. It remains to be seen whether many other DOGE staffers will also have that designation.

An executive order Mr. Trump signed this week to institute a hiring freeze of federal civilian employees underscored how broad the group’s authority could be. DOGE will help work on a plan to reduce the size of the federal work force “through efficiency improvements and attrition,” according to the order.

Mr. Musk’s team is tightly integrated with the Office of Personnel Management, with some of his DOGE aides working out of the O.P.M. offices, according to a person with knowledge of the arrangement. Federal agencies have been asked to send Ms. Scales, the office’s new chief of staff, lists of all their workers who are on probationary status — and therefore easier to fire — by Friday.

Another Musk ally is also poised to join the administration: Michael Grimes of Morgan Stanley, a star Silicon Valley banker who helped Mr. Musk purchase Twitter, has told associates that he’s likely to come aboard in a temporary, fellowship-like role before returning to the bank, according to people briefed on the conversations. His interest was first reported by The Wall Street Journal.

An early focus for DOGE appears to be the I.R.S., the sprawling agency with more than 80,000 employees that collected nearly $5 trillion in tax revenue last year.

People involved with DOGE, including the tech investor Baris Akis, participated in the transition team’s agency review at the I.R.S., with a focus on updating the tax collector’s technology systems, according to three people familiar with the work. Mr. Musk has criticized the agency on X as having outdated information technology.

A goal of the new administration is to reduce the number of I.R.S. employees by automating more work, the people said. An executive order from Mr. Trump this week temporarily freezing hiring across the federal government also empowered DOGE to keep the freeze in place indefinitely at the I.R.S.

Mr. Musk’s focus on technology was at the heart of a philosophical divide with Mr. Ramaswamy, the Ohio biotech entrepreneur, that ultimately forced him to walk away from DOGE.

Mr. Ramaswamy, a Yale-trained lawyer, had publicly spoken about a more policy-driven approach that revolved around regulatory rescissions to “dismantle the administrative state,” something he frequently pushed from the campaign trail.

A spokesman for Mr. Ramaswamy declined to comment.

The two men had publicly welcomed the chance to lead DOGE for Mr. Trump, and even floated the possibility of hosting a weekly podcast together. But their differences over how to set priorities quickly led to problems behind closed doors, according to transition aides.

Disagreements included minutiae such as which internal communications software to use. Mr. Musk’s annoyance became clear as he privately criticized Mr. Ramaswamy’s approach to the job to associates and kept a close hold on his plans for a more tech-based approach.

While Mr. Ramaswamy focused on conferring with budget hawks in Congress, several of Mr. Musk’s closest friends in Silicon Valley conducted interviews at Mar-a-Lago, Mr. Trump’s Florida resort, on behalf of the DOGE coalition. Some Ramaswamy allies now consider that a mistake, with one saying that Mr. Ramaswamy was “out-bodied” by Mr. Musk.

Some Trump advisers had also grown wary of Mr. Ramaswamy during the transition, concerned that the former presidential candidate was more interested in using his place in the administration to keep his name in the news and vault to political office.

Others argued that Mr. Ramaswamy’s interest in long-term budget cuts meant focusing on the political process to effect change.

As soon as Mr. Ramaswamy exited the presidential race in early 2024, he began thinking about a run for governor of Ohio. But the split over how to run DOGE hastened his decision to leave, according to Ramaswamy allies.

People close to both men said their differences were philosophical, not personal. Mr. Musk, for example, has told people that he plans to support Mr. Ramaswamy’s eventual bid for governor.

What was clear was that there was room for only one billionaire at DOGE.

Andrew Duehren, Maureen Farrell, Mike Isaac, Kate Kelly and David E. Sanger contributed reporting.