The Twitter profile page belonging to Elon Musk is seen on an Apple iPhone mobile phone.
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When Elon Musk said last week that Twitter has experienced a “massive drop in revenue” under his recent tutelage, he blamed the decline on “activist groups pressuring advertisers.”
There was some merit to his claim. A group of civil rights leaders had sent a letter to the CEOs of major companies, including Anheuser-Busch, Apple, Coca-Cola and Disney, urging them to relay their concerns about brand safety on the site to Musk. Later, the group would call for those businesses to halt ad spending on Twitter following what its leaders saw as a rise of racist posts and hate speech.
While Musk may be right to attribute some of the revenue drop to activist pressure, at least part of the responsibility falls on him. Twitter’s new owner, the world’s richest person, recently tweeted a conspiracy theory related to the attack on Paul Pelosi, husband of House Speaker Nandy Pelosi, and has made a series of crude and sophomoric jokes, some of which he’s quickly deleted.
Businesses don’t want to link their brands with that sort of behavior and content, said Rachel Tipograph, CEO of advertising technology firm MikMak.
“There’s concerns with advertisers around brand safety, and that’s really what this is all about,” Tipograph said. “Advertisers right now are not looking to be associated with the events that are currently happening at Twitter.”
Companies like General Motors and Volkswagen have paused their spending on Twitter following Musk’s arrival, while advertising titan Interpublic Group recommended that its clients do the same. The boycott poses a significant problem for the social media service, which derives 90% of sales from advertising.
Compared to larger rivals Facebook and Google, Twitter never managed to develop an online ad business that matched the scale of its influence in popular culture and society at large. Twitter has lost money in six of the eight years since its IPO. Its revenue in 2021 reached $5 billion, while Facebook generated sales of $118 billion and Google parent Alphabet recorded $257 billion in revenue.
Twitter’s revenue in the second quarter declined from a year earlier.
“In my humble opinion, to use a very technical term, their business sucks, and they need a radical transformation,” said Len Sherman, an adjunct professor of business at Columbia Business School.
It’s a business that Musk shelled out $44 billion to purchase. As part of the deal, he borrowed $13 billion, which he has to pay back.
For that investment, he got a company with “very poor targeting capabilities in an ad-based business where that’s essential,” Sherman said. “I kind of laugh because I keep getting Twitter promoted ads in my stream for companies that would be better directed to 13-year-old girls.”
On Wednesday, Musk is holding an audio meeting with advertisers on “Twitter Spaces.”
Twitter didn’t respond to requests for comment.
The YouTube approach
Musk did himself no favors after the acquisition, which closed in late October. In addition to his own questionable tweets and retweets, he’s been inconsistent in laying out what he means by free speech and acceptable content on the platform, and he abruptly fired roughly 50% of Twitter’s staff almost immediately, raising further questions about content moderation.
Companies typically halt their advertising campaigns if they feel they may suffer reputational damage. For example, businesses boycotted Alphabet’s YouTube in 2017 over concerns their ads would be played alongside extremists’ videos.
YouTube executives responded quickly at the time, allowing third-party verification of content, and hired more people to remove the offensive videos. Advertisers came back and the business rebounded promptly.
Musk would rather take a combative approach to advertisers. In response to a tweet recommending that he name the brands that are boycotting Twitter so that his followers can turn around and boycott them, Musk said “a thermonuclear name & shame is exactly what will happen if this continues.”
Meanwhile, Musk is taking a convoluted approach to banning users. Comedian Kathy Griffin was booted for impersonating Musk on the site, while Sarah Silverman had her account locked temporarily for a similar offense.
Jeff Seibert, Twitter’s former head of consumer product, called it “a mistake for Elon to be the face of content moderation.” In the past, Twitter has taken a team approach to policy violations.
“If you put one person in charge of it, I think you start seeing random decisions like this that then [cause people to] lose trust,” Seibert said.
Kathy Griffin attends the premiere of ‘A Hell of a Story’ during the 2019 SXSW Conference and Festival at the Zach Theatre on March 11, 2019 in Austin, Texas.
Tim Mosenfelder | Getty Images Entertainment | Getty Images
Twitter’s advertising business has already started deteriorating under Musk.
Data from MikMak, whose clients include Colgate, Unilever and General Mills, show a broad pullback in ad spending on Twitter. From Oct. 1 through Nov. 7, Twitter suffered a 68% drop in media traffic, which refers to the number of times people click on an ad, according to MikMak.
Before that, the numbers had been going up. Twitter’s media traffic increased 56.3% from July 1 to Sept. 30, and 326% from April 1 through June 30.
“We were actually seeing an uptick in Twitter traffic,” Tipograph said. “As soon as Elon Musk’s potential ownership was becoming more imminent, we significantly saw a change in traffic.”
Whatever tech and business improvements were taking place will be difficult to sustain, as the mass layoffs ate into Twitter’s global marketing team, whose responsibilities include reporting and metrics around ad performance, CNBC reported.
‘Now pay $8’
Musk has turned his focus to subscriptions as the key to reviving Twitter’s financials. He’s pitched an $8-a-month offering that allows people to be “verified” and gain premium features. The critics have been so vociferous that Musk on Monday tweeted an image of a t-shirt, reading “Your feedback is appreciated. Now pay $8.”
Musk has previously hinted that he wants to convert Twitter into a so-called super app, similar to China’s WeChat, that people can use to talk to friends, watch movies and buy goods.
Still, he’ll need partners that want to work with him. And his aggressive stance towards companies that have paused ads on the site isn’t a good look as he pursues other partnerships, said Jeanine Turner, a professor in Georgetown University’s Communication, Culture and Technology program.
The “big issue for him I would think would be trust,” Turner said. “I don’t see people trusting him with all of that information.”
As for advertisers, many brands don’t consider Twitter an essential avenue for distribution considering its less sophisticated ad-tracking technology and targeting capabilities. Other opportunities are emerging, such as connected TVs and streaming services as well as Amazon’s growing online ad business for retail-oriented companies, Tipograph said.
Jessica González, the co-CEO of nonprofit group Free Press, has been unimpressed with Musk’s antics. Gonzalez was one of the civil rights leaders who spoke to Musk last week, expressing concern about the rise of hate speech against Black and Jewish groups on Twitter. It’s the same group that was urging advertisers to halt their campaigns.
González said she was willing to give Musk “the benefit of the doubt” when he told the group that Twitter was aligned with them. But between his rhetoric that followed and his slashing of half the staff, she has serious doubts about whether it’s worth trying to work with him.
When asked whether she would take another meeting with Musk to discuss Twitter’s approach to offensive content, she said, “I don’t know.”
“Only because he made some promises in that meeting, and then went back on them like two days later,” González said.
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
Elon Musk has been promising investors for about a decade that Tesla’s cars are on the verge of turning into robotaxis, capable of driving themselves cross-country, after one big software update.
That hasn’t happened yet.
What Tesla offers is a sophisticated, but only partially automated, driving system that’s marketed in the U.S. as its Full Self-Driving (Supervised) option, though many Tesla fans refer to it as FSD. In China, Tesla recently changed the system’s name to “intelligent assisted driving.”
Full Self-Driving, as it was previously called, relies on cameras and software to enable features like automatic navigation on highways and city streets, or automatic braking and slowing in response to traffic lights and stop signs.
Tesla owner’s manuals warn users that FSD “is a hands-on feature” that requires them to pay attention to the road at all times. “Keep your hands on the steering wheel at all times, be mindful of road conditions and surrounding traffic,” the manuals say.
But many of Tesla’s customers ignore the fine print and use the system hands-free anyway.
Tesla’s partially automated driving systems have been a source of inspiration for its stalwart fans. But they’ve also caused controversy and concern for public safety after reports of injurious and fatal collisions where Tesla’s standard Autopilot or premium FSD systems were known to be in use.
FSD does a lot of things “amazingly well,” said Guy Mangiamele, a professional test driver for automotive consulting firm AMCI Testing, during a recent long drive in Los Angeles. But he added that “the times that it trips up, you could kill somebody or you could hurt yourself.”
The pressure has never been higher on Tesla to elevate the technology and deliver on Musk’s long-delayed promises.
The Tesla CEO is the wealthiest person in the world and was the biggest financial backer of President Donald Trump’s 2024 campaign. Since Trump’s January inauguration, Musk has been leading the administration’s Department of Government Efficiency effort to drastically slash the federal workforce and government spending.
The DOGE team has been connected to more than 280,000 layoff plans for federal workers and contractors impacting 27 agencies over the last two months, according to data tracked by Challenger Gray, the executive outplacement firm.
Musk’s work with DOGE – along with his frequently incendiary political rhetoric and endorsement of Germany’s far-right, anti-immigrant party AfD – has led to a tremendous backlash against Tesla.
Protests, boycotts and even criminal acts of vandalism have targeted the electric vehicle maker in recent months and led many prospective Tesla customers to turn to other brands. Meanwhile, existing Tesla owners have been trading in their EVs at record levels, according to data from Edmunds.
Tesla’s stock dropped 36% through the first three months of 2025, representing its steepest decline since 2022 and third-biggest slide for any quarter since the EV maker went public in June 2010. Tesla also reported 336,681 vehicle deliveries in the first quarter of 2025, a 13% decline from the same period a year ago.
Product unveilings and a “robotaxi launch” expected from Tesla in Austin, Texas, this year could revitalize investors’ sentiment about the company and hopefully lift its share price, Piper Sandler analysts wrote in a note following the worse-than-expected deliveries report.
On Tesla’s last earnings call, Musk promised investors that Tesla will finally start its driverless ride-hailing service in Austin in June.
To see whether the company’s FSD technology is anywhere close to a robotaxi-ready release, CNBC spent months riding along with Tesla owners who use Full Self-Driving (Supervised) and speaking with automotive safety experts about their impressions.
Auto-tech enthusiast and Tesla owner Chris Lee, host of the YouTube channel EverydayChris, told CNBC that Tesla’s system “definitely has a ways to go, but the fact that it’s able to go from where it was three years ago to today, is insane.”
Many experts, including Telemetry Vice President of Market Research Sam Abuelsamid, remain skeptical. There’s been “no evidence” that FSD is “anywhere close to being ready to be used in an unsupervised form” by June, said Abuelsamid, whose firms specializes in automotive intelligence.
Tesla FSD will “often work really well, particularly in daytime conditions” but then “randomly, in a scenario where it did fine previously, it will fail,” said Abuelsamid, adding that those scenarios can be unpredictable and dangerous.
Watch the video to learn more about the evolution of Tesla’s Full Self-Driving (Supervised) and whether it will be robotaxi-ready this June.
Microsoft owns lots of Nvidia graphics processing units, but it isn’t using them to develop state-of-the-art artificial intelligence models.
There are good reasons for that position, Mustafa Suleyman, the company’s CEO of AI, told CNBC’s Steve Kovach in an interview on Friday. Waiting to build models that are “three or six months behind” offers several advantages, including lower costs and the ability to concentrate on specific use cases, Suleyman said.
It’s “cheaper to give a specific answer once you’ve waited for the first three or six months for the frontier to go first. We call that off-frontier,” he said. “That’s actually our strategy, is to really play a very tight second, given the capital-intensiveness of these models.”
Suleyman made a name for himself as a co-founder of DeepMind, the AI lab that Google bought in 2014, reportedly for $400 million to $650 million. Suleyman arrived at Microsoft last year alongside other employees of the startup Inflection, where he had been CEO.
More than ever, Microsoft counts on relationships with other companies to grow.
It gets AI models from San Francisco startup OpenAI and supplemental computing power from newly public CoreWeave in New Jersey. Microsoft has repeatedly enriched Bing, Windows and other products with OpenAI’s latest systems for writing human-like language and generating images.
Microsoft’s Copilot will gain “memory” to retain key facts about people who repeatedly use the assistant, Suleyman said Friday at an event in Microsoft’s Redmond, Washington, headquarters to commemorate the company’s 50th birthday. That feature came first to OpenAI’s ChatGPT, which has 500 million weekly users.
Through ChatGPT, people can access top-flight large language models such as the o1 reasoning model that takes time before spitting out an answer. OpenAI introduced that capability in September — only weeks later did Microsoft bring a similar capability called Think Deeper to Copilot.
Microsoft occasionally releases open-source small-language models that can run on PCs. They don’t require powerful server GPUs, making them different from OpenAI’s o1.
OpenAI and Microsoft have held a tight relationship shortly after the startup launched its ChatGPT chatbot in late 2022, effectively kicking off the generative AI race. In total, Microsoft has invested $13.75 billion in the startup, but more recently, fissures in the relationship between the two companies have begun to show.
Microsoft added OpenAI to its list of competitors in July 2024, and OpenAI in January announced that it was working with rival cloud provider Oracle on the $500 billion Stargate project. That came after years of OpenAI exclusively relying on Microsoft’s Azure cloud. Despite OpenAI partnering with Oracle, Microsoft in a blog post announced that the startup had “recently made a new, large Azure commitment.”
“Look, it’s absolutely mission-critical that long-term, we are able to do AI self-sufficiently at Microsoft,” Suleyman said. “At the same time, I think about these things over five and 10 year periods. You know, until 2030 at least, we are deeply partnered with OpenAI, who have [had an] enormously successful relationship for us.
Microsoft is focused on building its own AI internally, but the company is not pushing itself to build the most cutting-edge models, Suleyman said.
“We have an incredibly strong AI team, huge amounts of compute, and it’s very important to us that, you know, maybe we don’t develop the absolute frontier, the best model in the world first,” he said. “That’s very, very expensive to do and unnecessary to cause that duplication.”