Elon Musk Stakes a $44 Billion Claim on the Future of Free Speech

(Bloomberg Businessweek) -- When it began earlier this month, Elon Musk’s pursuit of Twitter Inc. had the tone of a prank. Soon it seemed to get slightly out of hand, then spiraled completely out of control, and finally culminated on April 25 with the world’s richest man agreeing to spend $44 billion for one of the most politically important technology companies in history. There have been bigger acquisitions in financial terms, but Twitter’s significance has always been out of line with its balance sheet. There’s never been a Silicon Valley deal quite like this one.

To recap how we got here: In early April, Musk disclosed that he’d acquired a stake in Twitter, explaining the move by railing about the social media company’s supposed squelching of free speech. His complaints have lacked specifics, instead relying heavily on the dog whistles of the extremely online segment of the political right. On April 5 he seemed set to join Twitter’s board, then said on April 9 that he wouldn’t do so, then said four days later that he’d buy the whole thing for $54.20 per share. Longtime fans of the famously chill chief executive officer noticed the 420 reference immediately—as did Twitter’s directors, who parried with a “shareholder rights” plan (i.e., a poison pill) that also included a 420 joke.

No one was quite sure whether the bid was real. Musk’s plans for Twitter seemed implausible or just lacking in seriousness. “We will defeat the spambots or die trying,” he tweeted, referencing automated accounts that use his name to promote cryptocurrencies. He antagonized his would-be employees, suggesting that since so few showed up at Twitter’s San Francisco headquarters he’d turn it into a homeless shelter; offering a proposal to rename the company Titter; and expressing solidarity with his growing cadre of conservative fans. “The woke mind virus is making Netflix unwatchable,” he tweeted following the streaming media company’s dismal earnings report on April 19.

But Musk secured funding, and after a frantic weekend of negotiations, Twitter announced it was taking the deal. Unlike in a typical buyout, Musk will assume most of the financial risk personally, putting up as much as $21 billion in cash and borrowing an additional $12.5 billion against his Tesla stock.

The biggest change expected to come from the deal is the replatforming of accounts that Twitter banned after they were used to harass others, spread misinformation, or incite violence—including, perhaps, the account of former President Donald Trump. This has already put Musk at odds with his own left-leaning employees, not to mention his company’s left-leaning users, as well as its advertisers, who would in general prefer more content moderation, not less.

The company’s previous leadership has tripped over similar problems. Founder Jack Dorsey resigned last year in the face of complaints that growth and product development had slowed and that he was distracted by his second job as CEO of payments processing company Block Inc. But Dorsey is a paragon of focus compared with Musk, a parent of seven who already runs four companies—besides Tesla and SpaceX, there’s the Boring Co., his tunneling venture, and Neuralink, which manufactures tiny implantable computers.

The biggest motivation for Musk in buying Twitter may be political. By spending $44 billion on this particular vision of “free speech,” he’s cemented an alliance with the American far right. Since Trump was thrown off the major social media platforms for encouraging the rioters at the U.S. Capitol on Jan. 6, 2021, conservative activists have promoted a series of competing upstart Twitter competitors—Parler, Gettr, and Trump’s own effort, Truth Social—aimed at right-wing users. None has taken off, but Musk has a shot of giving them a social network with both lax content moderation and a real user base. Trump said after the deal was announced that he wouldn’t return to Twitter, but if he did come back he’d hardly be the first user to swear off the service only to later rejoin it.

That prospect is already being celebrated by conservative activists and lawmakers. Josh Hawley, the Republican senator from Missouri, called it “a great day for free speech in America.” Tucker Carlson, the highly rated cable news host, began his nightly Fox show the day the deal was announced with a 10-minute monologue in praise of Musk’s move. He gushed over Musk and called the deal “the single biggest political development since Donald Trump’s election in 2016.”

But fans and detractors who view Musk as a former liberal who’s now a conservative underestimate how much his business interests influence his political ideology. During the George W. Bush presidency, he marketed Tesla’s vehicles not only as carbon savers, but also as superior machines that were faster and cooler than gas-powered luxury cars. During the Barack Obama years, while receiving government loans and benefiting from electric vehicle tax credits, Musk won a huge following among wealthy environmentalists who reserved hundreds of thousands of Tesla sedans years before they were made. Trump-era Musk called for a carbon tax, but he also played to the “Make America Great Again” moment, hosting the president at Florida rocket launches and fighting with local officials (and his own workers) over Covid rules that prevented him from quickly reopening his Bay Area factory.

Musk’s pivot rightward conveniently coincided not only with the rise of the nationalist-populist right, but also with the wish to cater to a growing market for EVs. In 2019 he unveiled a Tesla pickup, the Cybertruck, and the following year, after calling California’s stay-at-home orders “fascist,” he announced that he’d be manufacturing it at a new plant outside Austin. In 2021 he decided he would relocate Tesla’s headquarters there, too, complaining that California was the “land of over-regulation.” Musk’s Bay Area bashing was part of his effort to reframe Tesla as a company for pickup-driving dudes when Ford Motor Co. and General Motors Co. were beating him to the electric truck market.

In the same way, his purchase of Twitter will be impossible to separate from his other business interests. Tesla operates a factory in China and has enjoyed good relations with Beijing. This—as Amazon.com Inc. founder Jeff Bezos impishly pointed out—could be perceived as a conflict of interest when Musk’s Twitter has to decide how to treat Chinese-backed disinformation.

Musk has focused on Twitter’s product and its social impact, but some of the biggest challenges he faces with the company are financial: To comfortably service his new debt, he’ll need to increase its cash flow or dramatically cut costs. But even if Musk can’t do that, there are other ways for him to benefit from the deal. In recent days he’s used the increased attention he’s attracting to promote other business interests: Boring has hyperloops coming soon, Musk tweeted, and Neuralink brain implants are just around the corner! Don’t forget about Tesla’s long-promised robotaxis!

The benefits to his other businesses may be one reason that Musk is comfortable saying he has no expectation of making a profit. “This is not a way to sort of make money,” Musk said on April 14 at the TED conference, insisting that his interest in Twitter was purely benevolent. “I don’t care about the economics at all.”

There’s a temptation, given the rockets and the weed jokes, to see Musk as singular—and his gonzo buyout will undoubtedly fuel this narrative. On the other hand, he’s a megabillionaire spending a modest sum—for him anyway, since the money he’s putting up amounts to only about 13% of his net worth—for a potentially enormous amount of influence. Musk makes everything seem novel, but this deal is just the latest version of one of the oldest stories in the media business.

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