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  • First Gen Z congressman-elect says he was denied DC apartment over bad credit | CNN Politics

    First Gen Z congressman-elect says he was denied DC apartment over bad credit | CNN Politics

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    CNN
     — 

    The congressman-elect set to become the first member of Generation Z to serve in Congress said Thursday his rental application for an apartment in Washington, DC, was denied because of his “really bad” credit.

    “Just applied to an apartment in DC where I told the guy that my credit was really bad. He said I’d be fine. Got denied, lost the apartment, and the application fee. This ain’t meant for people who don’t already have money,” Maxwell Frost said in a tweet.

    Frost, an Orlando-based community organizer, made history last month when he won election in Florida’s 10th Congressional District at just 25 years old. Frost surprised party leaders with his victory in a crowded primary filled with senior political figures to replace outgoing Rep. Val Demings, before comfortably winning against his Republican opponent in a solidly blue district.

    In a Twitter thread, the congressman-elect expressed frustrations with relocating to the capital, saying that he has bad credit because he “ran up a lot of debt running for Congress for a year and a half” and that he did not make enough money working for Uber to pay for the cost of living.

    Frost said that he quit his full time job during his race’s primary, because “I knew that to win at 25 yrs old, I’d need to be a full time candidate. 7 days a week, 10-12 hours a day. It’s not sustainable or right but it’s what we had to do.”

    “As a candidate, you can’t give yourself a stipend or anything till the very end of your campaign,” he added. “So most of the run, you have no $ coming in unless you work a second job.”

    CNN has reached out to Frost’s office for comment.

    In comments to The Washington Post, Frost declined to identify the building, the size of his debt or credit score, but said the building where his application was rejected was in the city’s Navy Yard neighborhood, roughly a mile from the US Capitol. He said he lost the $50 application fee.

    Frost is not the only incoming member of Congress to have struggled to find housing in DC.

    On Twitter, he referenced New York Rep. Alexandria Ocasio-Cortez, who, in 2018 became the youngest woman elected to Congress at age 29 – and who also had a hard time as an incoming lawmaker finding affordable housing in Washington on her then-salary.

    Frost pointed out that once his congressional salary kicks in, he’ll be fine, adding that “we have to do better” for others.

    “I also recognize that I’m speaking from a point of privilege cause in 2 years time, my credit will be okay because of my new salary that starts next year,” Frost said. “We have to do better for the whole country.”

    Members of the House and Senate earn $174,000 a year, according to the Congressional Research Service, but that salary will not begin until Frost is sworn in on January 3.

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  • Key inflation measure shows price pressures cooled off in November, but remain high | CNN Business

    Key inflation measure shows price pressures cooled off in November, but remain high | CNN Business

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    New York
    CNN
     — 

    Another key inflation measure shows price pressures cooled off but remained stubbornly high in November, despite the Federal Reserve’s monthslong efforts to fight inflation through higher interest rates.

    The Producer Price Index, which measures prices paid for goods and services by businesses before they reach consumers, rose 7.4% in November compared to a year earlier, the Bureau of Labor Statistics reported Friday. That’s down from the revised 8.1% gain reported for October.

    US stocks fell immediately after the report, as economists surveyed by Refinitiv had expected wholesales prices to have risen just 7.2%, annually. The higher-than-expected inflation readings raised concerns about whether the Fed will be able to slow the pace of rate hikes.

    But futures for the Fed funds rate still show a strong likelihood of a half-point increase at the central bank’s policymaking meeting next week, rather than the three-quarter point hike instituted at the last four meetings.

    “Overall inflation is moving in the right direction, though at a slow pace,” said Kurt Rankin, senior economist at PNC. “The Federal Reserve’s tightening plans will remain aggressive until clear, consistent signs of inflation’s demise have been demonstrated.”

    The PPI report generally gets less attention that the corresponding Consumer Price Index, which measures prices paid by US consumers for goods and services. But this is a rare month in which the PPI report came out before the CPI report, which is due out Tuesday.

    That and the Fed meeting scheduled for Tuesday and Wednesday next week is making this inflation report of particular importance to investors.

    “Next Tuesday’s CPI release will be more important than today’s data, but with traders on edge, any indication that prices remain elevated and that inflation is more sticky than currently believed is a negative for markets,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

    Overall prices rose a seasonally adjusted 0.3% compared to October — the same monthly increase as was reported in both September and October — but were slightly higher than the 0.2% rise forecast by economists.

    Stripping out volatile food and energy prices, core PPI rose 6.2% for the year ending in November, down from the revised 6.8% increase the previous month. Economists had forecast only a 5.9% increase.

    Core PPI posted a 0.4% increase from October, a far bigger rise than the revised 0.1% month-over-month rise in that previous month, and twice as big as the 0.2% rise forecast by economists.

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  • US lawmakers want answers from FTX’s Sam Bankman-Fried | CNN Business

    US lawmakers want answers from FTX’s Sam Bankman-Fried | CNN Business

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    New York
    CNN
     — 

    Lawmakers are demanding that Sam Bankman-Fried, the founder of the failed crypto exchange FTX, appear before the Senate Banking Committee next week over “significant unanswered questions ” surrounding the collapse of his companies.

    In a letter to Bankman-Fried and his lawyer, the committee’s Democratic chairman, Sen. Sherrod Brown of Ohio, and Republican Sen. Pat Toomey of Pennsylvania wrote that the American people need answers about Bankman-Fried’s “misconduct” leading to the collapse of FTX and its sister hedge fund, Alameda, both of which filed for bankruptcy on November 11.

    “You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” the senators wrote.

    It wasn’t clear whether Bankman-Fried would comply. A representative for his attorney referred to Bankman-Fried’s tweet on Sunday in which he told Rep. Maxine Waters, a California Democrat, that he couldn’t commit to testifying at a hearing scheduled for December 13, one day before the Senate committee’s hearing. “Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” Bankman-Fried wrote. “I’m not sure that will happen by the 13th.”

    Brown and Toomey said in their letter that the committee would “consider further action if he does not comply.”

    “There are still significant unanswered questions about how client funds were misappropriated, how clients were blocked from withdrawing their own money, and how you orchestrated a cover up.”

    Separately, Sens. Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, both Democrats, sent letters to three regulators – the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency – asking them to assess the traditional banking system’s exposure to turmoil in the crypto space, a largely unregulated, parallel financial system.

    “Crypto firms may have closer ties to the banking system than previously understood,” Warren and Smith wrote. “Banks’ relationships with crypto firms raise questions about the safety and soundness of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain further access.” 

    Federal prosecutors are investigating the collapse of FTX, an exchange that marketed itself as a beginner-friendly way to get involved in what was, until recently, a booming if highly volatile market for digital assets. FTX also facilitated high-risk leveraged trading that wasn’t allowed inside the United States. (The firm was based in The Bahamas.)

    FTX was one of the biggest crypto exchanges in the world until last month, when it faced a sudden wave of customer withdrawals that it couldn’t cover. One of the key questions prosecutors are likely to probe is whether FTX misappropriated customer funds when it made loans to Alameda.

    Bankman-Fried has denied accusations of misusing customer deposits. “I didn’t knowingly commingle funds,” he told The New York Times last week. “I was frankly surprised by how big Alameda’s position was.”

    Federal prosecutors are also investigating whether Bankman-Fried played a role in the collapse this spring of two interlinked cryptocurrencies, Terra and Luna, according to the New York Times, which cited two people familiar with the matter.

    The Times said the issue is part of a broadening inquiry into the collapse of FTX, and it’s not clear whether prosecutors have determined any wrongdoing by Bankman-Fried.

    In a statement to the paper, Bankman-Fried said he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”

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  • Why we think we’re in a recession when the data says otherwise | CNN Business

    Why we think we’re in a recession when the data says otherwise | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN Business
     — 

    It seems like you can’t go anywhere these days without colliding headfirst into another ominous prediction of imminent recession. CEOs, portfolio managers, politicians, news pundits, second cousins and even Cardi B are sounding the alarm: Hear ye! Hear ye! Economic downturn awaits all who dare enter 2023!

    But those predictions contradict the slew of positive economic data we’ve seen: The job market is healthy, wages are growing, Americans are spending and GDP is strong. Business is also good: Companies are largely beating revenue expectations and reporting positive earnings results.

    The Federal Reserve’s regimen of painful interest rate hikes meant to tame persistent inflation could certainly cool the economy — as could events in Eastern Europe and China — but the economy has been able to successfully endure nearly a year of hikes and war in Ukraine with barely a dent.

    It’s possible that recession chatter is just that. Chatter.

    What’s happening: No one would ever accuse investors of shying away from their emotions: Passions run high on trading floors where feelings are often as valid as facts and fear and greed can sometimes run the show. Economists, on the other hand, are a data-dependent, stoic bunch. The US economy is not Wall Street, and market downturns are not recessions — but sometimes they get jumbled together in the public eye and their borders become hazy.

    That appears to be the case: The Fed’s attempts to tamp down sky-high inflation are having an outsized impact on markets — the S&P 500 is down about 18% so far this year — but there has so far been little impact on the US economy as a whole.

    This week, a number of top executives warned of an economic slowdown in 2023. CEOs from Goldman Sachs, JPMorgan, General Motors, Walmart, United and Union Pacific all said they were making plans for less-profitable times ahead. But hidden behind those “CEO PREDICTS RECESSION” headlines lies a lot of uncertainty.

    Rising interest rates and geopolitical chaos are pointing towards storm clouds on the horizon, JPMorgan CEO Jamie Dimon told CNBC on Tuesday: “When you look out forward, those things may well derail the economy and cause this mild-to-hard recession that people are worried about.” When pressed to predict what was coming, he deflected. “It could be a hurricane. We simply don’t know,” he said. What was left unsaid was that sunny days are also a possibility.

    Feedback loop: United Airlines CEO Scott Kirby also told CNBC on Tuesday that “we’re probably going to have a mild recession induced by the Fed.” He then went on to say that demand in his industry is higher than ever and United entered the fourth quarter with profit margins near all-time highs. He doesn’t see any indication of a slowdown on the horizon, either.

    So why does he think a recession is coming? “If I didn’t watch CNBC in the morning, the word ‘recession’ wouldn’t be in my vocabulary,” he said. “You just can’t see it in our data.”

    It’s almost as though Kirby predicted recession was imminent because other prominent voices predicted that recession was imminent. And it’s possible that we’re all stuck in a feedback loop that amplifies unjustified fear.

    Prophecies are often self-fulfilling. If CEOs believe recession is coming, they preemptively batten down the hatches — and that means less spending and more layoffs, which in turn can trigger an economic downturn.

    Goldman CEO David Solomon said Tuesday that the bank may soon terminate staff and exercise caution with its financial resources due to the mounting economic uncertainty. Morgan Stanley will reportedly slash its workforce by about 1,600 people, roughly 2% of the total.

    The upside: Some parts of Wall Street seem to be avoiding the recession fervor. ​​A recent study by Goldman Sachs found that smart money is betting on a soft landing. Money managers have been favoring industrial and commodity stocks that are sensitive to economic downturns. Stocks that act as a buffer during economic downturns like consumer staples and utilities have fallen out of favor at investment funds with assets totaling almost $5 trillion, Goldman strategists found.

    “Current sector tilts are consistent with positioning for a soft landing,” they wrote.

    Oil prices have tumbled to their lowest level since Christmas as worries about the health of the economy weigh on crude, overshadowing concerns about new restrictions imposed on Russian energy, reports my colleague Matt Egan.

    Brent crude, the world benchmark, lost nearly 3% on Thursday to around $77.45 a barrel.

    The oil selloff comes after the West hit Russia with new restrictions that, so far at least, do not appear to be derailing global energy markets.

    The European Union on Monday imposed a ban on seaborne oil imports from Russia, while the West placed a $60 cap on Russian oil. Both moves are designed to hurt Russia’s ability to finance its war in Ukraine, without hurting consumers by causing Moscow to slash oil production.

    “Russia oil is still on the market. As of now, it appears Russia is willing to play ball,” said Robert Yawger, vice president of oil futures at Mizuho Securities.

    The tame reaction from energy markets is a welcome gift for Americans heading on long drives this holiday season, as prices at the gas pump are expected to continue their recent plunge.

    US oil this week hit its lowest level since December 23, 2021, before recovering a little on Thursday to trade up 2% at $73.60 a barrel. That leaves oil down by 43% since briefly topping $130 a barrel in March amid fears about Russia’s invasion of Ukraine.

    The national average price for regular gasoline dipped by three cents to $3.33 a gallon on Thursday, according to AAA. Gas prices have dropped 14 cents in the past week and 47 cents in a month. The national average is a cent lower than a year ago when they averaged $3.34 a gallon.

    Britain is bracing for further disruption from strikes heading into the Christmas period, as ambulance drivers and nurses join rail operators and postal workers in the worst wave of walkouts the country has endured for at least a decade, reports my colleague Hanna Ziady.

    More than 20,000 ambulance workers, including paramedics and call handlers, are expected to strike on December 21 in a dispute over pay, according to statements from labor unions GMB, Unison and Unite.

    The strike will involve just under half of all ambulance drivers in England, Wales and Northern Ireland, although unions have said they will cover life-threatening emergencies during the walkouts. More than 10,000 ambulance workers represented by the GMB Union will strike again on December 28.

    Strikes have swept the United Kingdom this year, as workers grapple with a cost-of-living crisis and stagnating wages. Consumer prices rose by 11.1% in the year to October, a 41-year high. Once inflation is taken into account, average wages fell by the biggest drop on record earlier this year, and were still declining in the June-September period.

    According to The Times newspaper, one million UK workers are set to strike in December and January. Data from the Office for National Statistics shows Britain has already lost at least 741,000 days to strike action this year, putting it on track for its worst year of labor disputes in at least a decade.

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  • When China and Saudi Arabia meet, nothing matters more than oil | CNN Business

    When China and Saudi Arabia meet, nothing matters more than oil | CNN Business

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    Hong Kong
    CNN Business
     — 

    Chinese President Xi Jinping is visiting Saudi Arabia this week for the first time in nearly seven years, during which he is expected to sign billions of dollars of deals with the world’s largest oil exporter and meet leaders from across the Middle East.

    The visit is a sign that China and the Gulf region are deepening their economic relations at a time when US-Saudi ties have crumbled over OPEC’s decision to slash crude oil supply. As Xi wrote in an article published in Saudi media, the trip was intended to strengthen China’s relations with the Arab world.

    China is Saudi Arabia’s biggest trading partner and a source of growing investment. It’s also the world’s biggest buyer of oil. Saudi Arabia is China’s largest trading partner in the Middle East and the top global supplier of crude oil.

    “Energy cooperation will be at the center of all discussions between the Saudi-Chinese leadership,” said Ayham Kamel, head of Eurasia Group’s Middle East and North Africa research team. “There is great recognition of the need to build a framework to ensure that this interdependence is accommodated politically, especially given the scope of energy transition in the West.”

    Governments around the world have committed to drastically cutting carbon emissions over the coming decades. Countries such as Canada and Germany have doubled down on renewable energy investments to expedite their transition to net-zero economies.

    The United States has significantly increased domestic oil and gas output since the 2000s, while accelerating its transition to clean energy.

    The Russian invasion of Ukraine in February has triggered a global energy crisis that has left all countries racing to shore up supplies. And the West has further scrambled the oil markets by slapping an embargo and price cap on the world’s second biggest exporter of crude.

    Energy security has also increasingly become a key priority for China, which is facing significant challenges of its own.

    Last year, bilateral trade between Saudi Arabia and China hit $87.3 billion, up 30% from 2020, according to Chinese customs figures.

    Much of the trade was focused on oil. China’s crude imports from Saudi Arabia stood at $43.9 billion in 2021, accounting for 77% of its total goods imports from the kingdom. That amount also makes up more than a quarter of Saudi Arabia’s total crude exports.

    “Stability of energy supplies, in terms of both prices and quantities, is a key priority for Xi Jinping as the Chinese economy remains heavily reliant on oil and natural gas imports,” said Eswar Prasad, a professor of trade policy at Cornell University.

    The world’s second largest economy is heavily reliant on foreign oil and gas. 72% of its oil consumption was imported last year, according to official figures. 44% of natural gas demand was also from overseas.

    At the 20th Party Congress in October, Xi stressed that ensuring energy security was a key priority. The comments came after a spate of severe power shortages and soaring global energy prices following Russia’s invasion of Ukraine.

    As the West shunned Russian crude in the months that followed the invasion, China took advantage of Moscow’s desperate search for new buyers. Between May and July, Russia was China’s No. 1 oil supplier, until Saudi Arabia regained the top spot in August.

    “Diversity is a key ingredient for China’s long-term energy security because it cannot afford to put all of its eggs in one basket and turn itself into a captive of another power’s energy and geostrategic interests,” said Ahmed Aboudouh, a nonresident fellow with the Middle East Programs at the Atlantic Council, a research institute based in DC.

    “Although Russia is a source of cheaper supply chains, nobody can guarantee, with utmost certainty, that the China and Russia relationship will continue to shore up 50 years from now,” Aboudouh said.

    The Saudi Press Agency cited Saudi energy minister Prince Abdulaziz bin Salman as saying Wednesday that the kingdom would remain China’s “credible and reliable partner in this field.”

    Saudi Arabia also has strong motivations to deepen energy ties with China, according to Gal Luft, co-director of the Institute for the Analysis of Global Security.

    “The Saudis are concerned about losing market share in China in the face of a tsunami of heavily discounted Russian and Iranian crude,” he said. “Their goal is to ensure China remains a loyal customer even when the competitors offer [a] cheaper product.”

    Oil prices have fallen back to where they were before the Ukraine war on fears of a sharp global economic slowdown. The extent to which the Chinese economy can pick up pace next year will have a huge bearing on how bad that slump will be.

    Beyond security of supply, Saudi Arabia could offer Beijing another prize with bigger geopolitical ramifications.

    Riyadh has been in talks with Beijing to price some of its oil sales to China in the Chinese currency, the yuan, rather than the US dollar, according to a Wall Street Journal report. Such a deal could be a boost to Beijing’s ambitions to expand the Chinese currency’s global influence.

    It would also hurt the long-standing agreement between Saudi Arabia and the United States that requires Saudi Arabia to sell its oil only for US dollars and to hold its reserves partly in US Treasuries, all in return for US security guarantees. The “petrodollar system” has helped preserve the dollar’s status as the top global reserve currency and payment medium for oil and other commodities.

    Although Beijing and Riyadh never confirmed the reported talks, analysts said it was logical that the two sides would be exploring the possibility.

    “In the near future, Saudi Arabia could sell some of its oil and receive revenues in Chinese yuan, which makes economic sense as China is the kingdom’s top trading partner,” said Naser Al Tamimi, senior associate research fellow at ISPI, an Italian think tank on international affairs.

    Some believe it’s already happening, but that neither China nor the Saudis want to highlight it publicly.

    “They know too well how sensitive this issue [is] for the United States,” said Luft. “Both parties are overexposed to the US currency and there is no reason for them to continue to conduct their bilateral trade in a third party’s currency, especially when this third party is no longer a friend of either.”

    Xi’s visit could mark another step “in the erosion of the dollar’s status” as reserve currency, he added.

    Nonetheless, there are limits to the growing ties between Riyadh and Beijing.

    “The Biden administration’s approach to the Middle East has concerned the Saudis, and they see a growing relationship with China as a hedge against potential US abandonment and a tool for leverage in negotiations with the United States,” said Jon B. Alterman, director of the Middle East Program at the Center for Strategic and International Studies, a Washington DC-based think tank.

    The Biden administration has reoriented its policy priorities with a focus on countering China. At the same time, it has indicated its intention to downsize its own presence in the Middle East, sparking worries among allies there that the United States may not be as committed to the region as it used to be.

    “All that being said, Chinese-Saudi ties pale in both depth and complexity to Saudi-US ties,” Alterman said. “The Chinese remain a novelty to most Saudis, and they are additive. The United States is foundational to how Saudis see the world, and how they have seen it for 75 years.”

    Despite the possibility of shifting to yuan transactions, it’s too early to say Saudi Arabia would ditch the dollar in pricing its oil sales, analysts said.

    Eurasia Group’s Kamal believes it’s “highly unlikely” that Saudi Arabia would take such a step, unless there is an implosion on the US-Saudi relationship.

    “In essence there could be discussion on pricing of barrels to China in yuan, but this would be limited in size and probably only correspond to bilateral trade volumes,” he said.

    Prasad from Cornell University said countries like China, Russia, and Saudi Arabia are all eager to reduce their dependence on the dollar for oil contracts and other cross-border transactions.

    “However, in the absence of serious alternatives and with few international investors willing to place their trust in these countries’ financial markets and their governments, the dollar’s dominant role in global finance is hardly under serious threat,” he said.

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  • Former Theranos COO sentenced to nearly 13 years | CNN Business

    Former Theranos COO sentenced to nearly 13 years | CNN Business

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    CNN Business
     — 

    Ramesh “Sunny” Balwani, the former chief operating officer of failed blood testing startup Theranos, was sentenced Wednesday to nearly 13 years in prison for fraud. It marks an end to the stunning downfall of a high-flying Silicon Valley company that resulted in the rare convictions of two tech executives.

    “There is an unfortunate saying in Silicon Valley: ‘Fake it ‘til you make it.’ Elizabeth Holmes and Sunny Balwani stretched this idea to a place much farther than the law allows and in so doing put vast amounts of investor dollars at risk,” said Stephanie Hinds, US Attorney for the Northern District of California, in a statement. “Significantly, today the court also made clear that Sunny Balwani’s decision to deceive doctors and patients also put the health of patients at risk. Ms. Holmes and Mr. Balwani now will be justly punished for their illegal conduct.”

    Hinds added, “Let this story be a cautionary tale for entrepreneurs in this district: Those who use lies to cover up the shortfalls of their promised accomplishments risk substantial jail time.”

    The sentencing comes weeks after Elizabeth Holmes, the founder of Theranos and Balwani’s ex-girlfriend, was sentenced to more than 11 years in prison.

    Theranos raised $945 million from an A-list cohort of investors with its promise to test for a wide range of conditions using just a few drops of blood. At its peak, the company was valued at $9 billion.

    The company began to unravel after a Wall Street Journal investigation in 2015 reported that Theranos had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, and with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology. Theranos ultimately dissolved in September 2018.

    Holmes and Balwani were first indicted together four years ago on the same 12 criminal charges pertaining to defrauding investors and patients about Theranos’ capabilities and business dealings in order to get money. Their trials were severed after Holmes indicated she intended to accuse Balwani of sexually, emotionally and psychologically abusing her throughout their decade-long relationship, which coincided with her time running the company. (Balwani’s attorneys have denied her claims.)

    In July, Balwani was found guilty on all 12 charges he faced, which included ten counts of federal wire fraud and two counts of conspiracy to commit wire fraud. Holmes was found guilty in January on four charges relating to defrauding investors, and found not guilty on three additional charges concerning defrauding patients and one charge of conspiracy to defraud patients.

    Like Holmes, Balwani faced up to 20 years in prison as well as a fine of $250,000 plus restitution for each count.

    In a recent court filing, prosecutors noted that Balwani was convicted not only of defrauding investors but also defrauding patients. They recommended a 15-year prison sentence for him, as well as an order for Balwani to pay $804 million in restitution. In a separate filing, attorneys for Balwani requested a sentence of probation, noting he had no criminal history.

    Before joining Theranos, Balwani had a career as a software executive. Balwani, nearly 20 years older than Holmes, first met her in 2002 before she dropped out of Stanford. He served as an informal adviser to Holmes in Theranos’ earliest days and the two became romantically involved. Balwani guaranteed a “multimillion-dollar loan” to the startup in 2009, court filings show, and took on a formal role as president and chief operating officer. Holmes and Balwani largely kept their romantic relationship hidden while working together.

    During her trial, Holmes claimed Balwani tried to control nearly every aspect of her life — including disciplining her eating, her voice and image, and isolating her from others. She testified that while he didn’t control her interactions with investors, business partners and others, “he impacted everything about who I was, and I don’t fully understand that.”

    Holmes is expected to appeal her conviction but was ordered to turn herself into custody on April 27, 2023.

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  • US trade deficit edged up to $78.2 billion in October | CNN Business

    US trade deficit edged up to $78.2 billion in October | CNN Business

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    New York
    CNN Business
     — 

    The US trade gap edged only slightly higher in October than the month before, to $78.2 billion.

    The latest reading was up just 5.4%, less than half the pace of increase from the revised September reading, when the trade deficit jumped by 12.7% to $74.1 billion.

    A strong dollar and weaker global demand weighed on exports both months. A strong dollar makes US goods more expensive to foreign buyers and it also makes imports more affordable for US buyers. But economic slowdowns in overseas markets also hit US exports in the most recent readings.

    The latest report shows exports fell 0.7% in October compared to the month before, and are down nearly 2% from the record exports set in August. Most of the drop was in the export of goods, rather than services, which fell 4.4% compared to August.

    Oil prices have come down since earlier this year, according to data released in the report. The average price of crude oil imports in the month was $82.05 a barrel, down 5.7% from September, and down 21.7% from the peak in June.

    But the United States now exports more petroleum products, by dollars, than it imports. So a lower price of crude no longer helps the trade deficit the way it might have done in the past, when crude and petroleum product imports vastly exceeded exports.

    The deficit in the movement of goods between the United States and China narrowed significantly in the latest report, falling 22.6% to $28.9 billion from $37.3 billion, one factor in the smaller trade gap increase.

    Although most of that narrowing was due to a 31.3% jump in the export of US goods to China, compared to September, a 9.5% decline in US imports of Chinese goods was also a factor in the smaller trade deficit between the two countries.

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  • Salesforce Co-CEO Bret Taylor steps down, leaving Marc Benioff alone at the top | CNN Business

    Salesforce Co-CEO Bret Taylor steps down, leaving Marc Benioff alone at the top | CNN Business

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    New York
    CNN Business
     — 

    Enterprise tech giant Salesforce said Wednesday that its co-CEO and Vice Chair Bret Taylor will step down from his roles. Salesforce co-founder Marc Benioff, who had been co-CEO alongside Taylor, will continue running the company and serving as board chair, the company said in a news release.

    Taylor had worked at Salesforce

    (CRM)     for six years, most recently as president and COO before being elevated to co-CEO last November. He will officially exit his position on January 31, 2023. Benioff, in a statement, called Taylor’s decision to step down “bittersweet.”

    “After a lot of reflection, I’ve decided to return to my entrepreneurial roots,” Taylor said in a statement. “Salesforce has never been more relevant to customers, and with its best-in-class management team and the company executing on all cylinders, now is the right time for me to step away.”

    Prior to Salesforce, Taylor founded and led collaboration platform Quip, which Salesforce acquired for $750 million in 2016. Taylor also worked as chief technology officer at Facebook during the company’s IPO.

    Taylor’s move comes at a rocky time for Salesforce, whose shares have fallen around 40% since the start of this year amid the economic downturn. The announcement coincided with Salesforce’s third quarter earnings report, in which the company said it expected fourth quarter revenue at the low-end of analysts’ expectations.

    Salesforce’s stock fell more than 6% in after-hours trading following the earnings and leadership change announcements.

    Taylor also had a busy year outside Salesforce. As the former chair of Twitter’s board of directors, he was in charge of leading the company through Elon Musk’s tumultuous takeover deal and litigation. Musk officially closed his $44-billion deal to buy the company last month and quickly dissolved the board of directors.

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  • Top US general says increased partnership between Iran, Russia, and China will make them ‘problematic’ for ‘years to come’ | CNN Politics

    Top US general says increased partnership between Iran, Russia, and China will make them ‘problematic’ for ‘years to come’ | CNN Politics

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    CNN
     — 

    Chairman of the Joint Chiefs of Staff Gen. Mark Milley told lawmakers Wednesday that China, Russia, and Iran would be a problem for the US “for many years to come” as the three are working more closely together.

    Speaking before the House Armed Services Committee alongside Defense Secretary Lloyd Austin, Milley said Russia and China are “getting closer together.”

    “I wouldn’t call it a true full alliance in the real meaning of that word, but we are seeing them moving closer together, and that’s troublesome,” Milley said. “And then … Iran is the third. So those three countries together are going to be problematic for many years to come I think, especially Russia and China because of their capability.”

    While the US has made clear for years now that the three countries are focuses of the military – particularly China and Russia – tensions with all three have been on the rise in recent months and even weeks.

    The US continues to help fund Ukraine’s defense against Russia’s invasion, which Milley said Wednesday “in and of itself is a war crime.” Tensions with China rose recently following a suspected Chinese spy balloon’s travel over the continental US. It was ultimately shot down by the US military off the eastern coast of the country; Chinese Minister of National Defense Wei Fenghe refused to take a call with Austin regarding the incident.

    And just last week, the US launched retaliatory strikes against Iran-backed groups in Syria, after a suspected Iranian drone struck a facility housing US personnel, killing an American contractor and injuring five service members. Following the US strike, additional rocket and drone attacks were carried out targeting US and coalition personnel in Syria.

    Milley warned during a hearing on Tuesday that Iran could “produce enough fissile material for a nuclear weapon in less than two weeks,” and ultimately create a nuclear weapon within “several months thereafter.”

    “The United States military has developed multiple options for our national leadership to consider if or when Iran decides to develop a nuclear weapon,” he said.

    But he added Wednesday that China and Russia specifically have “the means to threaten our interests and our way of life,” and mark the first time that the US is “facing two major nuclear powers.”

    And while Milley also said Wednesday that China’s nuclear capabilities are “not matched” with those of the US, he added that they are still significant.

    “We are probably not going to be able to do anything to stop, slow down, disrupt, interdict, or destroy the Chinese nuclear development program that they have projected out over the next 10 to 20 years,” Milley said. “They’re going to do that in accordance with their own plan. And there’s very little leverage, I think, that we can do externally to prevent that from happening.”

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  • House passes bill to block Biden’s student loan forgiveness program | CNN Politics

    House passes bill to block Biden’s student loan forgiveness program | CNN Politics

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    Washington
    CNN
     — 

    The Biden administration’s one-time student loan forgiveness program is facing a fresh threat from House Republicans while it awaits a ruling from the Supreme Court about whether the proposal can take effect.

    The House voted Wednesday to pass a resolution seeking to block the forgiveness program as well as end the pandemic-related pause on federal student loan payments.

    Two Democrats, Rep. Jared Golden of Maine and Rep. Marie Gluesenkamp Perez of Washington, joined Republicans in voting for the bill.

    The proposed forgiveness program, which promises up to $20,000 in federal student debt relief to millions of low- and middle-income borrowers, was halted by lower courts late last year before any student debt was canceled. The pause on payments, which has been in place since March 2020, is set to end later this year.

    President Joe Biden has pledged to veto the Republican-led resolution if it passes in both the House and Senate. The administration said that the resolution would “weaken America’s middle class.”

    “The president’s plan is a good one. It’s a popular one. And it will help prevent borrowers from default when loan payments restart this summer,” said White House press secretary Karine Jean-Pierre earlier Wednesday.

    But Republicans argue that the student loan forgiveness program is unlawful and shifts the cost of the debt to taxpayers who chose not to go to college or already paid off their student loans. Blocking the program could reduce the deficit by nearly $320 billion, according to the Congressional Budget Office.

    “President Biden’s so-called student loan forgiveness programs do not make the debt go away, but merely transfer the costs from student loan borrowers onto taxpayers to the tune of hundreds of billions of dollars,” said Rep. Bob Good, a Republican from Virginia, in a statement released when he introduced the resolution in March.

    Even though Biden has pledged to veto the bill, votes in the House and Senate could force more moderate members of the Democratic Party to take a public stance regarding the student loan forgiveness program. Some lawmakers have been critical of the proposal in the past.

    The Senate has yet to schedule a vote on the resolution, but nearly all of the 49 Republican senators have signed on as sponsors.

    Republican lawmakers introduced their joint resolution in late March, using the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.

    If the student loan forgiveness program is allowed to move forward, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year could see up to $10,000 of their federal student loan debt forgiven.

    If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness.

    While the debt relief would help borrowers with student loans now, the program wouldn’t change the cost of college in the future – and some critics argue that it could even lead to an increase in tuition.

    In February, the Supreme Court heard two legal challenges to Biden’s student loan forgiveness program. One was filed by six Republican-led states, and the other was brought by two student loan borrowers who did not qualify for the full benefits of the program. The individuals are backed by the Job Creators Network Foundation, a conservative organization.

    The lawsuits argue that the Biden administration is abusing its power and using the Covid-19 pandemic as a pretext for fulfilling the president’s campaign pledge to cancel student debt.

    The White House has said that it received 26 million applications before a lower court in Texas put a nationwide block on the program in November, and that 16 million of those applications have been approved for relief.

    No debt has been canceled yet. But if the Supreme Court allows the program to take effect, it’s possible the government moves quickly to forgive those debts.

    If the justices strike down Biden’s student loan forgiveness program, it could be possible for the administration to make some modifications to the policy and try again – though that process could take months.

    The Supreme Court is expected to issue its ruling in late June or early July.

    Biden has extended the pause on federal student loan payments several times. Accounts have been frozen and most federal borrowers have not been required to make a payment for more than three years.

    But the pause is set to end later this year. The Biden administration has tied the restart date to the litigation over the separate student loan forgiveness program. Payments are set to resume 60 days after the Supreme Court issues its ruling or 60 days after June 30, whichever comes first.

    But the Biden administration has also made some lesser-known but potentially longer-lasting changes to the federal student loan system.

    New rules set to take effect in July could broaden eligibility for the Public Service Loan Forgiveness program, which is aimed at helping government and nonprofit workers. And a new income-driven repayment plan proposal is meant to lower eligible borrowers’ monthly payments and reduce the amount they pay back over time. Parts of that new repayment plan are expected to go into effect later this year.

    The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower defense to repayment, as well as for those who are permanently disabled.

    Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers.

    This headline and story have been updated with additional information.

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  • Here’s what’s left for the Supreme Court’s final week of the term | CNN Politics

    Here’s what’s left for the Supreme Court’s final week of the term | CNN Politics

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    Editor’s Note: A previous version of this story ran in early June.



    CNN
     — 

    All eyes are on the Supreme Court for its final week, as the justices will release cases on issues such as affirmative action, student loan payments, election law and LGBTQ rights.

    Of the 10 cases remaining, several that most capture the public’s attention are likely to lead to fiery opinions and dissents read from the bench.

    In addition, they will come down as the court finds itself in the center of a spotlight usually reserved for members of the political branches due to allegations that the justices are not transparent enough when it comes to their ethics disclosures, most recently with Justice Samuel Alito last week.

    Here are some of the remaining cases to be decided:

    The court is considering whether colleges and universities can continue to take race into consideration as a factor in admissions, a decision that could overturn long standing precedent that has benefited Black and Latino students.

    At issue are programs at Harvard and the University of North Carolina that the schools say help them to achieve diversity on campus.

    During oral arguments, the right side of the bench appeared ready to rule against the schools. Such an opinion would deliver a long-sought victory for opponents of affirmative action in higher education who have argued for decades that taking race into consideration – even in a limited manner – thwarts the goal of achieving a color-blind society.

    John Roberts skewers Harvard attorney’s comparison of race and music skills as qualities in applicants

    At the center of another case is a graphic designer, Lorie Smith, who seeks to expand her business and create custom websites to celebrate weddings – but does not want to work with gay couples out of religious objections to same-sex marriage.

    Smith has not yet moved forward with her new business venture because of Colorado’s public accommodations law. Under the law, a business may not refuse to serve individuals because of their sexual orientation. Smith, whose company is called 303 Creative LLC, said that she is willing to work with all people, regardless of their sexual orientation, but she draws the line at creating websites that celebrate same-sex marriage because expressing such a message would be inconsistent with her beliefs.

    The state and supporters of LGBTQ rights say that Smith is simply seeking a license to discriminate.

    The conservatives on the court were sympathetic at oral arguments to those put forward by Smith’s lawyer. They viewed the case through the lens of free speech and suggested that an artist or someone creating a customized product could not be forced by the government to express a message that violates her religious beliefs.

    Moore v. Harper has captured the nation’s attention because Republican lawmakers in North Carolina are asking the justices to adopt a long dormant legal theory and hold that state courts and other state entities have a limited role in reviewing election rules established by state legislatures when it comes to federal elections.

    The doctrine – called the Independent State Legislature theory – was pushed by conservatives and supporters of Trump after the 2020 presidential election.

    The North Carolina controversy arose after the state Supreme Court struck down the state’s 2022 congressional map as an illegal partisan gerrymander, replacing it with court-drawn maps that favored Democrats. GOP lawmakers appealed the decision to the US Supreme Court, arguing that the North Carolina Supreme Court had exceeded its authority.

    They relied upon the Elections Clause of the Constitution that provides that rules governing the “manner of holding Elections for Senators and Representatives” must be prescribed in “each state by the legislature thereof.”

    Under the independent state legislature theory, the lawmakers argued, state legislatures should be able to set rules with little to no interference from the state courts.

    The justices heard oral arguments in the case last winter and some of them appeared to express some support for a version of the doctrine. The justices could, however, ultimately dismiss the dispute due to new partisan developments in North Carolina.

    After the last election, the North Carolina Supreme Court flipped its majority to Republican. In April, the newly composed state Supreme Court reversed its earlier decision and held that the state constitution gives states no role to play in policing partisan gerrymandering. After that decision was issued, the justices signaled they may dismiss the case.

    exp juneteenth anita hill amanpour intw 061901PSEG2 cnn us_00002001.png

    Anita Hill: America “has lost confidence in the Supreme Court”

    The Supreme Court is also considering two challenges to President Joe Biden’s student loan forgiveness program, an initiative aimed at providing targeted debt relief to millions of student-loan borrowers that has so far been stalled by legal challenges.

    Republican-led states and conservatives challenging the program say it amounts to an unlawful attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

    At the heart of the case is the Department of Education’s authority to forgive the loans. Several of the conservative justices have signaled in recent years that agencies – with no direct accountability to the public – have become too powerful, upsetting the separation of powers.

    They have moved to cut back on the so-called administrative state.

    In court, Chief Justice John Roberts as well as some other conservatives seemed deeply skeptical of the Biden administration’s plan.

    A former mail carrier, an evangelical Christian, seeks to sue the US Postal Service because it failed to accommodate his request not to work on Sundays.

    A lower court had ruled against the worker, Gerald Groff, holding that his request would cause an “undue burden” on the USPS and lead to low morale at the workplace when other employees had to pick up his shifts.

    There appeared to be consensus, after almost two hours of oral arguments, that the appeals court had been too quick to rule against Groff.

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  • States have been on a tax-cutting spree, but revenues are now weakening | CNN Politics

    States have been on a tax-cutting spree, but revenues are now weakening | CNN Politics

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    CNN
     — 

    Fueled by surging revenues, states have been slashing taxes for individuals and businesses for the past three years.

    But the party is expected to come to an end in the coming fiscal year, which started on Saturday in 46 states. Revenue is projected to decline by 0.7% in fiscal 2024, based on forecasts used in governors’ budgets, after an estimated 0.3% dip this fiscal year, according to a recently released National Association of State Budget Officers survey.

    This reversal comes after double-digit percentage increases for the prior two fiscal years. It reflects the impact of slower economic growth, a weaker stock market and a slew of recent tax cuts.

    Some 25 states have cut individual income tax rates since 2021, according to the right-leaning Tax Foundation. This includes 22 states that reduced their top marginal rates.

    “Most states are viewing tax reform and relief as a chance to, first and foremost, return some of their excess revenue to taxpayers, but to also do that in a way that is simultaneously improving the structure of their tax cuts and make it more conducive to long-term economic growth,” said Katherine Loughead, senior policy analyst at the foundation.

    States are also seeking to make themselves more attractive to business investment, as well as to remote and traditional workers, she continued.

    In 2023 alone, at least eight states approved rate reductions, according to the Tax Foundation. Arkansas, for instance, is trimming its top individual income tax rate to 4.7%, retroactive to January 1, after reducing it from 5.5% to 4.9% last year.

    Likewise, Montana lawmakers approved deepening cuts enacted in 2021. Starting in 2024, the top marginal income tax rate will be 5.9%, instead of 6.5% as originally planned. It was 6.9% in 2021.

    In addition, previously scheduled or triggered income tax rate reductions took effect this year in Arizona, Idaho, Iowa, Missouri and North Carolina, as well as for interest and dividend income in New Hampshire, according to the Tax Foundation.

    Aside from individual income tax cuts, states have also lowered the levies on purchases and for businesses over the past three years. Two states cut sales tax rates, while 13 reduced corporate income tax rates and others made additional tax changes that benefited companies.

    In 2023, Nebraska and Utah adopted corporate income tax rate reductions. The former will phase down its top rate to 3.99% in 2027, accelerating an earlier law’s timetable. If fully implemented as planned, Nebraska will slash its top marginal corporate income tax rate nearly in half over six years, according to the Tax Foundation.

    Utah also further reduced its corporate income tax rate to 4.65%, retroactive to January 1. A law passed last year had cut it to 4.85% for 2022, down from 4.95%.

    The tax cuts, along with stock market declines and the shaky economy, have taken their toll on states’ revenues, however.

    State tax revenue fell in 37 states, after adjusting for inflation, between July 2022 and May 2023, according to Lucy Dadayan, principal research associate at the nonpartisan Tax Policy Center. Some 19 states saw declines before taking inflation into account.

    Revenue dropped nearly 12% over the period on an inflation-adjusted basis. All major sources of revenue – personal income, sales and corporate income taxes – declined, though the extent varies widely by state and source. Individual income taxes were the weakest, plummeting more than 22%.

    States are in trouble, though there won’t be an immediate crisis, she said. Much depends on factors that remain unknown, such as whether the nation will fall into a recession or whether states will face natural disasters.

    The robust revenue of recent years was “artificially boosted” by federal Covid-19 pandemic relief funds and the strong stock market in 2021, she said.

    “We knew this is temporary,” Dadayan said. “It would have been better if the states wouldn’t jump and do tax cuts and be more cautious.”

    Still, revenues in fiscal 2023 are coming in stronger than initially expected. The current estimates are outperforming earlier forecasts by 6.5%, according to the National Association of State Budget Officers. Most states have also built up big reserves in their rainy day funds in recent years.

    Whether states will continue cutting taxes in the coming fiscal year will depend on what happens with revenues.

    “A lot of states have done what they can already,” Loughead said. “They will continue to look at how revenues come in and how the rates measure up. If they still are experiencing strong surpluses, I do think they might tweak those rates down even more.”

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  • The FTC should investigate OpenAI and block GPT over ‘deceptive’ behavior, AI policy group claims | CNN Business

    The FTC should investigate OpenAI and block GPT over ‘deceptive’ behavior, AI policy group claims | CNN Business

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    Washington
    CNN
     — 

    An AI policy think tank wants the US government to investigate OpenAI and its wildly popular GPT artificial intelligence product, claiming that algorithmic bias, privacy concerns and the technology’s tendency to produce sometimes inaccurate results may violate federal consumer protection law.

    The Federal Trade Commission should prohibit OpenAI from releasing future versions of GPT, the Center for AI and Digital Policy (CAIDP) said Thursday in an agency complaint, and establish new regulations for the rapidly growing AI sector.

    The complaint seeks to bring the full force of the FTC’s broad consumer protection powers to bear against what CAIDP portrayed as a Wild West of runaway experimentation in which consumers pay for the unintended consequences of AI development. And it could prove to be an early test of the US government’s appetite for directly regulating AI, as tech-skeptic officials such as FTC Chair Lina Khan have warned of the dangers of unchecked data use for commercial purposes and of novel ways that tech companies may try to entrench monopolies.

    The FTC declined to comment. OpenAI didn’t immediately respond to a request for comment.

    “We believe that the FTC should look closely at OpenAI and GPT-4,” said Marc Rotenberg, CAIDP’s president and a longtime consumer protection advocate on technology issues.

    The complaint attacks a range of risks associated with generative artificial intelligence, which has captured the world’s attention after OpenAI’s ChatGPT — powered by an earlier version of the GPT product — was first released to the public late last year. Everyday internet users have used ChatGPT to write poetry, create software and get answers to questions, all within seconds and with surprising sophistication. Microsoft and Google have both begun to integrate that same type of AI into their search products, with Microsoft’s Bing running on the GPT technology itself.

    But the race for dominance in a seemingly new field has also produced unsettling or simply flat-out incorrect results, such as confident claims that Feb. 12, 2023 came before Dec. 16, 2022. In industry parlance, these types of mistakes are known as “AI hallucinations” — and they should be considered legally enforceable violations, CAIDP argued in its complaint.

    “Many of the problems associated with GPT-4 are often described as ‘misinformation,’ ‘hallucinations,’ or ‘fabrications.’ But for the purpose of the FTC, these outputs should best be understood as ‘deception,’” the complaint said, referring to the FTC’s broad authority to prosecute unfair or deceptive business acts or practices.

    The complaint acknowledges that OpenAI has been upfront about many of the limitations of its algorithms. For example, the white paper linked to GPT’s latest release, GPT-4, explains that the model may “produce content that is nonsensical or untruthful in relation to certain sources.” OpenAI also makes similar disclosures about the possibility that tools like GPT can lead to broad-based discrimination against minorities or other vulnerable groups.

    But in addition to arguing that those outcomes themselves may be unfair or deceptive, CAIDP also alleges that OpenAI has violated the FTC’s AI guidelines by trying to offload responsibility for those risks onto its clients who use the technology.

    The complaint alleges that OpenAI’s terms require news publishers, banks, hospitals and other institutions that deploy GPT to include a disclaimer about the limitations of artificial intelligence. That does not insulate OpenAI from liability, according to the complaint.

    Citing a March FTC advisory on chatbots, CAIDP wrote: “Recently [the] FTC stated that ‘Merely warning your customers about misuse or telling them to make disclosures is hardly sufficient to deter bad actors. Your deterrence measures should be durable, built-in features and not bug corrections or optional features that third parties can undermine via modification or removal.’”

    Artificial intelligence also stands to have vast implications for consumer privacy and cybersecurity, said CAIDP, issues that sit squarely within the FTC’s jurisdiction but that the agency has not studied in connection with GPT’s inner workings.

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  • Google workers in London stage walkout over job cuts | CNN Business

    Google workers in London stage walkout over job cuts | CNN Business

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    Reuters
     — 

    Hundreds of Google employees staged a walkout at the company’s London offices on Tuesday, following a dispute over layoffs.

    In January, Google’s parent company Alphabet announced it was laying off 12,000 employees worldwide, equivalent to 6% of its global workforce.

    The move came amid a wave of job cuts across corporate America, particularly in the tech sector, which has so far seen companies shed more than 290,000 workers since the start of the year, according to tracking site Layoffs.fyi.

    Trade union Unite, which counts hundreds of Google’s UK employees among its members, said the company had ignored concerns put forward by employees.

    “Our members are clear: Google needs to listen to its own advice of not being evil,” said Unite regional officer Matt Whaley.

    “They and Unite will not back down until Google allows workers full union representation, engages properly with the consultation process and treats its staff with the respect and dignity they deserve.”

    A Google employee attending the protest, who asked not to be named for fear of retaliation, told Reuters that talks between employees and management had been “extremely frustrating.”

    “It has been difficult for those involved. We have a redundancy process for a reason, so that employees can make their voice heard,” they said. “But it feels as if our concerns have fallen on deaf ears.”

    Google’s senior management has been engaged in redundancy talks in many parts of Europe, in line with local employment laws.

    Last month, workers at the company’s Zurich office in Switzerland staged a similar walkout, with employee representatives claiming Google had rejected their proposals to reduce job cuts.

    “As we said on January 20, we’ve made the difficult decision to reduce our workforce by approximately 12,000 roles globally. We know this is a very challenging time for our employees,” a Google spokesperson said.

    “In the UK, we have been constructively engaging and listening to our employees through numerous meetings, and are working hard to bring them clarity and share updates as soon as we can in adherence with all UK processes and legal requirements.”

    Google employs more than 5,000 people in the United Kingdom.

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  • How Elon Musk upended Twitter and his own reputation in 6 months as CEO | CNN Business

    How Elon Musk upended Twitter and his own reputation in 6 months as CEO | CNN Business

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    New York
    CNN
     — 

    When Elon Musk first agreed to buy Twitter, he promised to make the company “better than ever,” with greater transparency, fewer bots, a stronger business and more of what he called “free speech.”

    But six months after Musk took control of Twitter, the future of the company and the platform have never been less certain.

    After acquiring the social media platform for $44 billion in late October, Musk reportedly now values Twitter at around $20 billion — and some who track the company believe even that estimate is likely high. Musk repeatedly warned that Twitter could be at risk of filing for bankruptcy only to claim he had brought it back from the brink thanks to his slashing costs, both by laying off 80% of Twitter’s staff and allegedly by failing to pay some of its bills, according to multiple lawsuits. But it’s not clear just how and when Musk might return Twitter to growth.

    He has antagonized journalists and news outlets that have long been central to the platform’s success, overseen policy changes that threaten to make Twitter less safe or reliable, made the platform less transparent to researchers and scared away many top advertisers. Musk’s primary plan to grow Twitter’s business through an overhauled subscription strategy has resulted in much chaos but only a limited number of actual subscriptions.

    In the process, Musk has also upended his own reputation. Once known by much of the public primarily for his innovative efforts to launch rockets and build electric cars, Musk has instead spent much of the past six months in the headlines for controversial policy and feature changes at Twitter, draconian cuts to staff resulting in frequent service disruptions, and briefly banning several prominent journalists. He’s also tweeted a long list of eccentric remarks from his personal Twitter account, including sharing conspiracy theories and publicly mocking a Twitter worker with a disability who was unsure whether he’d been laid off.

    “If he had done nothing except cut costs, then Twitter would have been okay,” said Leslie Miley, a former Twitter engineering manager who started its product safety and security team and left the company in 2015. He has since held roles at Google, Microsoft and the Obama Foundation. “If you had just let everyone go, treated them with respect, and just let the service run for two years, you probably would be okay.”

    Now, though, Miley said he expects Twitter will “eventually go down the road of MySpace.”

    “It’s going to take a little bit longer … [but] I think Twitter is on its way to irrelevance,” he said, “there is no strategy to acquire or retain users because you are offering them no value.”

    Twitter, which has slashed much of its public relations team under Musk, responded to CNN’s request for comment on this story with the auto-reply from its press email that it has used for weeks: a poop emoji.

    For years, what differentiated Twitter from other social platforms was that it served as a central hub for real-time news. It was a place for ordinary people to read and even engage in conversation with celebrities, business leaders and other newsmakers.

    Many of Musk’s recent moves at the platform threaten to undermine that purpose, not to mention the larger information ecosystem — and it’s not clear the efforts will improve the company’s business.

    “Twitter has never been perfect, it had a lot of problems but it was critical global infrastructure for information that Elon Musk is now systematically, frankly, vandalizing,” former Twitter chair of global news Vivian Schiller told CNN in a recent interview.

    Most recently, Musk removed the legacy blue check marks that verified the identities of prominent users, saying he would instead make the checks available only to those who pay $8 per month for Twitter Blue in the interest of “treating everyone equally.”

    “There shouldn’t be a different standard for celebrities,” Musk said in a tweet earlier this month.

    But the move may make it easier for bad actors to impersonate high-profile people and harder for users to trust the veracity and authenticity of information on the platform. What’s more, Musk then decided to sponsor the blue checks for certain celebrities, including Stephen King and LeBron James, in effect creating exactly the “different standard” for famous users he’d professed to want to avoid.

    Now, Musk says content from verified users will be promoted on the platform, potentially making it harder for users who can’t afford a subscription, or simply don’t want to pay Musk for one, to find an audience on the platform. And the new paid verification system won’t necessarily rid the platform of bots, an issue Musk spent months railing on while trying to get out of the acquisition deal last year, according to Filippo Menczer, a computer science professor at Indiana University and director of the Observatory on Social Media.

    “You can create fake accounts and pay $8 [for a blue check] … so if you are a well-funded bad actor, you can do more damage now than you could before,” Menczer said. “And if you are a reliable source and you’re not well-funded, your information will not be as visible as before.”

    Menczer added that the result could be “less free speech, because you’re drowning out the speech of regular people [with speech] by people who either have the technical skills or the money to manipulate the system.”

    Twitter’s move to charge users of its API will also make it harder for researchers to identify and warn the platform about inauthentic activity, Menczer said, and could disrupt other positive uses of the platform that contributed to its reputation as a news hub. Weather agencies, for example, have warned that the change could make it harder for them to release automated emergency weather alerts.

    Any social network lives or dies based on its ability to retain and attract users — and there’s real reason for Twitter to be worried.

    A number of users, celebrities and media organizations have said they plan to leave Twitter over Musk’s recent policy changes — which often appear to be made on a whim without any real principles.

    NPR, BBC and CBC left Twitter after opposing a controversial new “government-funded media” label that they say was misleading. CenterLink, a global nonprofit that represents hundreds of centers providing services to LGBTQ communities, said it would no longer use Twitter after the platform removed protections for transgender users from its hateful conduct policy. And some high-profile users, such as bullying activist Monica Lewinsky, have threatened to exit the platform over the blue check change, now that they may be at greater risk of impersonation on Twitter.

    There remain few alternatives that offer similar features and scale to Twitter, but a growing list of upstart competitors has emerged since Musk’s takeover. At least one large rival, Facebook-parent Meta, has also confirmed it’s working on a service that sounds a lot like Twitter.

    “Almost everything he said he was going to do, he has screwed up in any number of ways,” Miley said. “If it weren’t so damaging to people and organizations who have depended upon the platform, it would be funny. But it’s not actually funny because it has degraded people’s ability to communicate effectively.”

    All of the chaos has made it difficult to convince advertisers, which previously made up 90% of Twitter’s revenue, to rejoin the platform, after many halted spending in the wake of Musk’s takeover over concerns about increased hate speech, as well as confusion about layoffs and the platform’s future direction.

    Just 43% of Twitter’s top 1,000 advertisers as of September — the month before Musk’s takeover — were still advertising on the platform in April, according to data from market intelligence firm Sensor Tower.

    Musk, for his part, has said that Twitter’s usage has increased since his takeover and that advertisers are steadily returning to the platform. But because he took the company private, he is not obligated to make financial disclosures and followers of the company are left to take him at his word.

    Musk built his reputation by overhauling Tesla, helping to launch a widespread shift away from gas cars to electric vehicles and growing SpaceX into a space transport juggernaut. Now, he appears to be attempting a similar overhaul at Twitter — upending the tried-and-true digital advertising business in favor of a subscription model that no other social media platform has yet been able to find large scale success with.

    “I give him some credit for trying a different business model, I think the business model based on user data is quite abusive,” said Luigi Zingales, professor at the University of Chicago Booth School of Business, although Musk has also attempted to improve Twitter’s targeted advertising business.

    Some other tech companies have followed his lead in some places. Facebook-parent Meta copied Twitter by launching a paid verification option. And Meta, along with a number of other tech companies, have undergone multiple rounds of cost-cutting since last fall. Twitter appears to have given cover for some of these ideas, and other firms’ somewhat more principled approaches made them look better by comparison.

    For Twitter and Musk, the stakes for success are high: Musk’s relationships with banks and investors for future endeavors could hinge in part on his performance at the social media firm, which he took on billions of dollars in debt to purchase. Banks “will sit down and say, what kind of cred does this guy have? Will we find him making these shoot-from-the-lip sort of dictates that, in fact, throw our money down a hole?” said Columbia Business School management professor William Klepper.

    Any change to Musk’s reputation from his time leading Twitter could also ultimately have ripple effects for his broader business empire, causing potential investors, recruits and customers to think twice about betting on one of his companies. Tesla

    (TSLA)     shareholders recently complained to the company’s board that Musk appears “overcommitted.”

    “His reputation has been diminished significantly with Twitter … and once you lose it, it’s very difficult to recover,” Klepper said. “It would be a good opportunity for [Musk] to rethink whether or not … he’s really leadership material.”

    Musk in December pledged to step down as Twitter CEO after millions of users voted in favor of his exit in a poll he posted to the platform. But for now, he remains “Chief Twit.”

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  • Lyft stock plunges nearly 15% on weaker than expected revenue forecast | CNN Business

    Lyft stock plunges nearly 15% on weaker than expected revenue forecast | CNN Business

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    CNN
     — 

    Lyft may have a bumpy road ahead to recovery.

    The ride-hailing company reported revenue of $1 billion for the quarter ending in March, marking a 14% year-over-year increase and beating Wall Street estimate’s. But the company forecast weaker-than-expected revenue for the current quarter, which was enough to jitter investors.

    Shares of Lyft plunged nearly 15% in after-hours trading Thursday following the earnings results.

    The latest earnings report comes on the heels of Lyft shaking up its the C-suite and announcing plans to cut 26% of its employees as it fights for market share and profitability.

    David Risher, who previously worked at Amazon and Microsoft, recently took over as CEO of Lyft and the company’s two co-founders stepped down from their management positions at the company. Risher has been a member of the Lyft board since 2021.

    On a conference call with analysts on Thursday to discuss the results, Risher said Lyft is currently at “an inflection point” as people return to pre-pandemic social habits.

    “I am very aware of our current levels of growth and profitability are not acceptable,” Risher said on the call, his first as CEO. “I am committed to growing Lyft into a large, durable, profitable business, that our riders, drivers and shareholders love, and I look forward to keeping you informed on our progress.”

    Compared to its chief rival Uber, Lyft has so far struggled to bounce back from the pandemic’s hit to its business. While Uber diversified its business beyond ride-hailing by delivering meals and grocery items during the health crises, Lyft never did. Uber also was able to attract drivers back to the platform better than Lyft as pandemic restrictions eased in the U.S.

    Earlier this week, Uber said in its quarterly earnings report that revenue was up 29%, as demand for its rideshare and delivery services held firm despite lingering recession fears.

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  • ‘Verified’ Twitter accounts share fake image of ‘explosion’ near Pentagon, causing confusion | CNN Business

    ‘Verified’ Twitter accounts share fake image of ‘explosion’ near Pentagon, causing confusion | CNN Business

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    CNN
     — 

    A fake image purporting to show an explosion near the Pentagon was shared by multiple verified Twitter accounts on Monday, causing confusion and leading to a brief dip in the stock market. Local officials later confirmed no such incident had occurred.

    The image, which bears all the hallmarks of being generated by artificial intelligence, was shared by numerous verified accounts with blue check marks, including one that falsely claimed it was associated with Bloomberg News.

    “Large explosion near the Pentagon complex in Washington DC. – initial report,” the account posted, along with an image purporting to show black smoke rising near a large building.

    The account has since been suspended by Twitter. It was unclear who was behind the account or where the image originated. A spokesperson for Bloomberg News said the account is not affiliated with the news organization.

    Under owner Elon Musk, Twitter has allowed anyone to obtain a verified account in exchange for a monthly payment. As a result, Twitter verification is no longer an indicator that an account represents who it claims to represent.

    Twitter did not respond to a request for comment.

    The false reports of the explosion also made their way to air on a major Indian television network. Republic TV reported that an explosion had taken place, showing the fake image on its air and citing reports from the Russian news outlet RT. It later retracted the report when it became clear the incident had not taken place.

    “Republic had aired news of a possible explosion near the Pentagon citing a post & picture tweeted by RT,” the outlet later posted on its Twitter account. “RT has deleted the post and Republic has pulled back the newsbreak.”

    In a statement Tuesday, the RT press office said, “As with fast-paced news verification, we made the public aware of reports circulating and once provenance and veracity were ascertained, we took appropriate steps to correct the reporting.”

    In a post on the Russian social media platform VKontakte Tuesday, RT tried to make light of its apparent error.

    “Is the Pentagon on fire? Look, there’s a picture and everything. It’s not real, it’s just an AI generated image. Still, this picture managed to fool several major news outlets full of clever and attractive people, allegedly,” a post from RT read.

    In the moments after the image began circulating on Twitter, the US stock market took a noticeable dip. The Dow Jones Industrial Average fell about 80 points between 10:06 a.m. and 10:10 a.m., fully recovering by 10:13 a.m. Similarly, the broader S&P 500 went from up 0.02% at 10:06 a.m. to down 0.15% at 10:09 a.m.. By 10:11 a.m., the index was positive again.

    The building in the image does not closely resemble the Pentagon and, according to experts, shows signs it may have been created using AI.

    “This image shows typical signs of being AI-synthesized: there are structural mistakes on the building and fence that you would not see if, for example, someone added smoke to an existing photo,” Hany Farid, a professor at the University of California, Berkeley, and digital forensic expert told CNN.

    The fire department in Arlington, Virginia, later responded in a tweet, stating that it and the Pentagon Force Protection Agency were “aware of a social media report circulating online about an explosion near the Pentagon. There is NO explosion or incident taking place at or near the Pentagon reservation, and there is no immediate danger or hazards to the public.”

    – CNN’s David Goldman contributed reporting.

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  • Golf’s new Saudi deal presents questionable political, business and sporting realities | CNN Politics

    Golf’s new Saudi deal presents questionable political, business and sporting realities | CNN Politics

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    CNN
     — 

    The PGA Tour once advertised its brightest stars with the catch phrase “These guys are good.” A better slogan might now be “These guys are even richer.”

    In a bombshell announcement so staggering that many golf fans thought it was fake at first, the venerable PGA Tour unveiled a partnership Tuesday with Saudi Arabia’s public investment fund, the financier of its sworn rival LIV Golf – a breakaway circuit that split the sport and seeded feuds among its top players.

    The deal means that the PGA Tour – built on the image of quintessentially American Arnold Palmer, who epitomized post World War II US values – will now rest atop a pile of money put up by the regime that the US blamed for the murdering and dismemberment of Washington Post columnist Jamal Khashoggi, that was home to 15 of the 19 hijackers of September 11, 2001, attack, and that has frequently been condemned by Washington for infringing women’s rights.

    It is beyond doubt that the new reality of pro-golf will mean a better spectacle for fans since it will end the split between the two rival tours and will also fold in the DP World Tour (formerly known as the European tour) and mean the brightest stars will play one another more often.

    For many sports fans in the US and elsewhere, that’s just fine. They like to plop down on the couch and watch their favorite golfer on the back nine on Sunday or their Gulf-owned Premier League team on TV. Who can begrudge them one oasis free from bitter, tribal modern politics?

    And the deal is also undeniably a great piece of business, assuming PGA Tour players accept it. Global golfers stand to win a lot more money, various tours will be invigorated and Saudi Arabia’s government and its ruthless leader, Crown Prince Mohammed bin Salman (MBS), get to be associated with one of the planet’s most prestigious year-round sporting properties. And all pending litigation between LIV Golf and the PGA Tour was also mutually ended under the new agreement.

    But for others, Tuesday’s peace deal on the links raises painful moral issues. It also exposes top PGA leaders – who had blasted golfers who defected to LIV – to accusations of hypocrisy and reflects the way modern professional sports are hostage to the highest bidders. This can only pose uncomfortable questions to fans whose values and history clash with those of distant and sometimes politically dicey entities who effectively own their teams and top stars.

    PGA Tour Commissioner Jay Monahan, for instance, had some explaining to do – not least to the tour’s players gathered at the Canadian Open this week after many tweeted that they had no advance notice of the deal. Monahan had played the 9/11 card last year at the same event, saying that two families that were close to him had lost loved ones in the worst terror attack on American soil, adding, “I would ask any player that has left, or any player that would ever consider leaving, have you ever had to apologize for being a member of the PGA Tour?”

    Now Monahan stands to be the effective supremo of global golf, save for the four majors – the sport’s most prestigious tournaments – aided by a gusher of Saudi cash.

    9/11 Families United effectively accused Monahan of using the tragedy as leverage in a business deal to reunite golf. He “co-opted the 9/11 community last year in the PGA’s unequivocal agreement that the Saudi LIV project was nothing more than sports washing of Saudi Arabia’s reputation,” the group said in a statement. “But now the PGA and Monahan appear to have become just more paid Saudi shills, taking billions of dollars to cleanse the Saudi reputation so that Americans and the world will forget how the Kingdom spent their billions of dollars before 9/11 to fund terrorism, spread their vitriolic hatred of Americans, and finance al Qaeda and the murder of our loved ones.”

    Monahan was asked about his reversal after what he said was a “heated” meeting with PGA Tour players on Tuesday.

    “I recognize that people are going to call me a hypocrite,” he said. “Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA TOUR and our players.”

    Major champions who jumped to the rival circuit last year like Dustin Johnson, Phil Mickelson, Patrick Reed and Cam Smith might also now wonder whether their PGA tour brethren will face the same grilling over human rights that they had to endure at the time.

    One very famous golfer was delighted by the deal and seemed keen to claim some reflected credit – former President Donald Trump. The current front-runner for the 2024 GOP nomination associated himself with LIV after the PGA Tour and other golf governing bodies distanced themselves from him over his radioactive political reputation. Trump has hosted several tournaments at his courses for LIV – a circuit that sits well with his record of refusing to sever links with the Saudis over the murder of Khashoggi in 2018, reasoning that the Saudis were great customers of the US.

    “A big, beautiful, and glamorous deal for the wonderful world of golf. Congrats to all!!!” Trump wrote in block capital letters on his Truth Social platform.

    Some defenders of LIV golfers have pointed out that the players were only making a choice to prioritize personal interests over moral ones in partnering with the Saudis – a calculus that mirrored decades of US foreign policy. Indeed, President Joe Biden had called on the 2020 campaign trail for the kingdom to be treated as a “pariah” because of Khashoggi’s murder only to travel to the kingdom as president to fist-bump MBS when he needed a spike in oil price production to bring down American gas prices.

    On Tuesday, after the LIV/PGA partnership was announced, US Secretary of State Antony Blinken sat down for talks with the Crown Prince in Riyadh.

    The idea that politics and sport shouldn’t mix has always been quaint. The Olympics and the World Cup are two of the planet’s most political spectacles after all. And modern sport has long run on money as monster TV rights contracts translate into huge salaries for top soccer players, Formula One Drivers, NBA stars and the top names in other sports.

    But Tuesday’s LIV/PGA Tour agreement lays bare questions of morality so starkly precisely because of the way golf has sold itself. In a sport where players call penalties on themselves, and commentators idolize top players in whispered tones as paragons of gentlemanly conduct, patriotism and family values, the origin of the sport’s new financial lifeline is glaring.

    The PGA Tour and Saudi partnership may be the most prominent example yet of the phenomenon known as sports washing, whereby an authoritarian nation seeking to buff up its image – despite serious criticism over its political system and human rights performance – woos the world’s top sporting stars. China was accused of such an agenda with its 2008 and 2022 Summer and Winter Olympics, where attempts at political activism largely fizzled under its repressive rule. The Qatar World Cup last year was another example of a nation that used its financial muscle to present a new image to the world. Various controversies during the tournament over LGBTQ rights and the plight of workers who built the stadiums undercut global governing body FIFA’s pretensions to inclusion.

    The Saudis, Qataris and others are using their oil wealth to buy themselves a foothold among the world’s most powerful nations and to create tourism, entertainment and sporting legacies to sustain them when their reserves of carbon energy are depleted.

    This mirrors a global shift in power and especially financial muscle – from the capitals of Western Europe to new epicenters in the emerging economies of the Middle East, India and China. Soccer, like golf, is taking its share of the cash. Traditional working class football clubs knitted into their communities for decades in the UK, for example, now suddenly find themselves owned by foreign energy magnates. Premier League giant Manchester City was bought by a United Arab Emirates-led group. And Newcastle United is owned by a Saudi Arabia-led consortium, forcing fans to consider (or not) the ethical dimensions of their support for their hometown clubs. And global cricket has been transformed by the Indian Premier League, which pays lavish salaries in a shortened form of the game.

    One of the top names in soccer, Cristiano Ronaldo, is playing out the twilight of a glorious career spent at Europe’s top clubs in the up-and-coming Saudi league for a massive salary. And on Tuesday, Saudi team Al-Ittihad announced the signing of Real Madrid and French forward Karim Benzema, completing a sporting double whammy for the kingdom.

    There are as many sporting questions about the PGA Tour/LIV Golf partnership that remain unanswered. The partnership combines the Saudi Public Investment Fund’s golf-related commercial businesses and rights (including LIV Golf) with the commercial businesses and rights of the PGA Tour and DP World Tour into a new, collectively owned, for-profit entity. A spokesman for the PGA tour told CNN that the deal is not a merger.

    “After two years of disruption and distraction, this is a historic day for the game we all know and love,” Monahan said, describing a “transformational partnership” that would “benefit golf’s players, commercial and charitable partners and fans.”

    Yasir Al-Rumayyan, governor of the Saudi Public Investment Fund, told CNBC he expected the partnership to be finalized within weeks and revealed, in a stunning move, that he had told LIV figurehead and Hall of Famer Greg Norman about the deal only moments before going on air.

    LIV lured some of the PGA Tour’s top stars with massive signing bonuses and huge purses at substantially fewer events than the PGA tour, prompting the premier US circuit to unveil its own select “designated events” with upped prize money. The two sides were locked in bitter legal battles that have now been resolved.

    It remains unclear, however, what steps LIV stars will have to take to potentially be able to return to events like The Players Championship, currently hosted on the PGA tour from which they were banned.

    Then there is the question of how current PGA Tour members will respond.

    Former British Open Champion Collin Morikawa tweeted, “I love finding out morning news on Twitter.”

    The sudden announcement also did not specify what would happen to LIV tour events, which have struggled to draw a strong TV audience, beyond this season. Monahan’s announcement did hint that the new entity was committed to the new format of team events that has been introduced by LIV, to compliment golf’s traditional reliance on individual tournaments.

    The golfer with the widest smile on Tuesday was probably Mickelson. The three-time Masters champion took the most heat for deserting the PGA tour for a reported massive payday, and was one of the most outspoken supporters of LIV – a breakaway he argued was a way to revolutionize the structure of professional golf and to secure more rewards for players.

    Mickelson was also open about the reality of partnering with the Saudis, calling them “scary m*therf**kers to get involved with,” in an interview with golf journalist Alan Shipnuck that he later claimed was off the record. Shipnuck has written that he offered Mickelson no such agreement.

    On Tuesday, Mickelson simply tweeted: “Awesome day today,” with a smiley sunshine emoji.

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  • First on CNN: Senators press Google, Meta and Twitter on whether their layoffs could imperil 2024 election | CNN Business

    First on CNN: Senators press Google, Meta and Twitter on whether their layoffs could imperil 2024 election | CNN Business

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    CNN
     — 

    Three US senators are pressing Facebook-parent Meta, Google-parent Alphabet and Twitter about whether their layoffs may have hindered the companies’ ability to fight the spread of misinformation ahead of the 2024 elections.

    In a letter to the companies dated Tuesday, the lawmakers warned that reported staff cuts to content moderation and other teams could make it harder for the companies to fulfill their commitments to election integrity.

    “This is particularly troubling given the emerging use of artificial intelligence to mislead voters,” wrote Minnesota Democratic Sen. Amy Klobuchar, Vermont Democratic Sen. Peter Welch and Illinois Democratic Sen. Dick Durbin, according to a copy of the letter reviewed by CNN.

    Since purchasing Twitter in October, Elon Musk has slashed headcount by more than 80%, in some cases eliminating entire teams.

    Alphabet announced plans to cut roughly 12,000 workers across product areas and regions earlier this year. And Meta has previously said it would eliminate about 21,000 jobs over two rounds of layoffs, hitting across teams devoted to policy, user experience and well-being, among others.

    “We remain focused on advancing our industry-leading integrity efforts and continue to invest in teams and technologies to protect our community – including our efforts to prepare for elections around the world,” Andy Stone, a spokesperson for Meta, said in a statement to CNN about the letter.

    Alphabet and Twitter did not immediately respond to a request for comment.

    The pullback at those companies has coincided with a broader industry retrenchment in the face of economic headwinds. Peers such as Microsoft and Amazon have also trimmed their workforces, while others have announced hiring freezes.

    But the social media companies are coming under greater scrutiny now in part due to their role facilitating the US electoral process.

    Tuesday’s letter asked Meta CEO Mark Zuckerberg, Alphabet CEO Sundar Pichai and Twitter CEO Linda Yaccarino how each company is preparing for the 2024 elections and for mis- and disinformation surrounding the campaigns.

    To illustrate their concerns, the lawmakers pointed to recent changes at Alphabet-owned YouTube to allow the sharing of false claims that the 2020 presidential election was stolen, along with what they described as content moderation “challenges” at Twitter since the layoffs.

    The letter, which seeks responses by July 10, also asked whether the companies may hire more content moderation employees or contractors ahead of the election, and how the platforms may be specifically preparing for the rise of AI-generated deepfakes in politics.

    Already, candidates such as Florida Gov. Ron DeSantis appear to have used fake, AI-generated images to attack their opponents, raising questions about the risks that artificial intelligence could pose for democracy.

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  • Elon Musk says he’s found a new CEO for Twitter | CNN Business

    Elon Musk says he’s found a new CEO for Twitter | CNN Business

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    New York
    CNN
     — 

    Elon Musk on Thursday said he’s found a new CEO to take over Twitter, months after he first promised to step back from the role.

    The new CEO will assume the role at Twitter Inc., which recently changed its name to X Corp., in the coming weeks, Musk said. He did not provide a name.

    “Excited to announce that I’ve a new CEO for X/Twitter. She will be starting in ~6 weeks!” Musk said in a tweet.

    Musk, who has had a chaotic reign as “Chief Twit” since buying the company in October, said he will become Twitter’s executive chair and chief technology officer, overseeing product, software and system operations.

    In December, Musk ran a poll on the platform asking users whether he should step back as Twitter’s CEO, which ended with the majority of users voting in the affirmative. Musk said he would abide by the results of the poll but later backtracked, saying he would hand over the role “as soon as I find someone foolish enough to take the job!” In February, he reiterated that he planned to find a replacement by the end of the year.

    Musk has faced criticism for a series of policy changes at Twitter, which often came without clear justification and raised concerns about the impact on Twitter’s users.

    He has also been attempting to convince advertisers to rejoin the platform, after many fled over concerns about hateful conduct on the platform, Twitter’s mass layoffs or questions about the company’s future. At the same time, he has been trying to sell users on a new paid subscription platform that includes the ability to pay for a blue verification check mark, but appears to have limited traction so far.

    Musk — who runs or is involved in numerous other companies, including Tesla

    (TSLA)     — has also faced criticism from Tesla

    (TSLA)     shareholders concerned that he is distracted by Twitter.

    Musk recently said that Twitter is now “trending to breakeven,” after previously saying it was at risk of bankruptcy. Now, the company’s new CEO will be tasked with trying to help turn around the struggling company and help Musk recoup some of the $44 billion spent acquiring the platform.

    Even as Musk prepares to step back from the CEO role, he will likely maintain significant control over the future direction of the company. After taking over the company in October, Musk cleared out the C-Suite, dissolved the board and became both the CEO and sole director of the platform.

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