The Tesla and SpaceX entrepreneur was pushed into the top slot after Tesla’s share price increased on Thursday.
He takes the top spot from Amazon founder Jeff Bezos, who had held it since 2017.
Mr. Musk’s electric car company Tesla has surged in value this year and hit a market value of $700bn (£516bn) for the first time on Wednesday.
That makes the car company worth more than Toyota, Volkswagen, Hyundai, GM, and Ford combined.
Mr. Musk reacted to the news in signature style, replying to a Twitter user sharing the news with the remark “how strange”.
An older tweet pinned to the top of his feed offered further insight into his thoughts on personal wealth.
“About half my money is intended to help problems on Earth, and a half to help establish a self-sustaining city on Mars to ensure the continuation of life (of all species) in case Earth gets hit by a meteor-like the dinosaurs or WW3 happens and we destroy ourselves,” it reads.
The tycoon’s fortunes have been buoyed by politics in the US, where the Democrats will have control of the US Senate in the forthcoming session.
Daniel Ives, an analyst with Wedbush Securities wrote: “A Blue Senate is very bullish and a potential ‘game-changer’ for Tesla and the overall electric vehicle sector, with a more green-driven agenda now certainly in the cards for the next few years.”
Expected electric vehicle tax credits would benefit Tesla, “which continues to have an iron grip on the market today”, he added.
Mr. Bezos has also seen his fortunes rise over the past year. The coronavirus pandemic has meant Amazon benefited from stronger demand for both its online store and cloud computing services.
However, he gave a 4% stake in the business to his ex-wife MacKenzie Scott after they split, which helped Mr. Musk overtake him.
In addition, the threat of regulation has meant Amazon’s stock has not risen as high as it might otherwise have done.
The owner of a business that has only just made its first annual profit and is still a minnow compared to the likes of Toyota – or Amazon – is now the world’s richest person.
It is the fact that Tesla’s share price has increased more than seven-fold in the past year that has sent Elon Musk’s fortune rocketing past that of Jeff Bezos.
To believe the electric car maker’s worth could rise so rapidly in just 12 months is the ultimate example of irrational exuberance.
It means that Musk will have to show within the next five years that Tesla can make more profits than just about the whole of the rest of the motor industry combined to justify the valuation.
Mind you, his many fans will point out that the somewhat eccentric tycoon has constantly confounded the skeptics who bet that he would go bust.
And of course, 20 years ago another tech visionary was staring disaster in the face when the dot com bubble burst and big profits seemed a distant dream – but Jeff Bezos went on to make those who bet on Amazon very rich indeed.