Elon Musk may be luring Apple into a fight with Republicans

Published

3 years ago

November 30, 2022

admin

Tim Cook walks in the Paddock prior to the F1 Grand Prix of USA at Circuit of The Americas on October 23, 2022 in Austin, Texas.

Jared C. Tilton | Getty Images

Elon Musk is as 'wrong as you can get' on Apple criticism, says Jim Cramer

Apple has remained a sleeping bear in the face of Musk’s provocations. It has not commented, nor has CEO Tim Cook, and while its app review moderation staffers may be talking to Twitter behind the scenes over questionable content, Apple hasn’t pulled the app. In fact, Twitter got an update through app review last week.

Twitter is not that important to Apple from a business perspective. It’s just one of a vast number of apps on the App Store, and it isn’t a huge moneymaker for Apple through in-app purchases.

But on Tuesday, Florida Gov. Ron DeSantis and Ohio Senator-elect J.D. Vance, both Republicans, made remarks about Apple’s situation that show how Musk could put Apple in a tough spot.

Here’s one way it could go:

Musk makes a change to Twitter in order to bypass Apple’s 30% fees, such as allowing users to plug their credit cards in to the app to subscribe to Twitter Blue or other new features.
Apple pulls the app because of these violations.
Musk frames the dispute with Apple as an issue over free speech and content moderation, and Republican politicians agree.
Apple gets caught up in a nationwide debate over free speech and monopoly power focusing on its App Store.

How things could play out

On Tuesday, DeSantis said at a press conference that if Apple were to kick Twitter off, it would show that Apple has monopolistic power and that Congress should look into it. DeSantis framed it as an issue of free speech — many conservatives believe that social networks, including Twitter, generally discriminate against conservative viewpoints.

“You also hear reports Apple is threatening to remove Twitter from the App Store because Elon Musk is actually opening it up for free speech, and is restoring a lot of accounts that were unfairly and illegitimately suspended for putting out accurate information about Covid,” DeSantis said.

“If Apple responds to that by nuking them from the app store, I think that would be a huge, huge mistake, and it would be a really raw exercise of monopolistic power,” he continued.

Vance framed the situation similarly in a tweet, saying that if Apple pulled Twitter, “This would be the most raw exercise of monopoly power in a century, and no civilized country should allow it.”

In fact, Apple’s app review department is unlikely to pull Twitter over content. While Apple regularly bans apps over questionable content, they are rarely big brand names such as Twitter — they’re usually smaller, lesser-known apps. Apple’s rules for apps with significant user-generated content, such as Twitter, focus less on specific kinds of infringing content and more on whether the app has a content filtering system or content moderation procedures. Twitter has both, although Musk’s recent cuts to Twitter’s staff could hurt its ability to flag problem posts.

But Apple would be much more likely to pull the Twitter app if Twitter tries to cut Apple out of its platform fees.

It’s happened before. In 2020, Fortnite added a system inside its iPhone app that allowed users to buy in-game coins directly from Epic Games, cutting out the 30% of sales that Apple typically takes. Apple removed Fortnite from the App Store the same day. The episode kicked off a legal battle, which Apple won on most counts but is currently in appeals.

Google takes a similar cut for Android apps sold through its Play Store but also allows other Android app stores to exist and allows people to “sideload” apps directly onto their phones, while Apple has an exclusive lock on all iPhone app distribution.

Musk has good business reasons to pick this fight.

In particular, Musk wants Twitter to make much more money from direct subscriptions and not advertising. But Apple’s 30% cut of purchases made inside apps is a major hurdle for a company that is slashing costs and has a significant debt load.

So Musk could pull an Epic Games move and enable direct billing, spurring Apple to take action, while at the same time framing the debate around free speech. If that happened, as DeSantis suggested, perhaps Congress would start asking questions. Apple would become a football in political debates. Executives could be forced to testify or provide written responses.

At the very least, you’d have lawmakers such as Vance using the words “monopoly” and “Apple” in the same sentence. That’s a risk to Apple’s brand. Debate over these topics could reenergize pending regulation such as the Open Markets Act which threatens its control over the App Store and its significant profits.

The last time Apple pulled an app that was popular with conservatives for lack of content moderation was Parler in January 2021. It was restored in April.

In the interim, Apple faced official inquiries from Republican Sens. Ken Buck and Mike Lee about why Parler was removed from the App Store. Cook appeared on Fox News to defend the company’s decision.

Twitter is a significantly more important and well-known social network than Parler was and would grab more attention.

It’s probably most valuable for Apple if Twitter remains on the platform. The controversy-averse iPhone maker would probably like this whole Elon Musk narrative to go away.

Indeed, it could play out this way: Apple remains silent, working with Twitter behind the scenes on its app, and Musk tweets about the 30% cut when it irks him. Nothing really changes.

But Musk is unpredictable, and if he does really want to “go to war” over 30% fees, Apple could be forced into a tough spot.

Apple and Twitter did not immediately respond to requests for comment.

Technology

Week in review: Stocks hit records on inflation data, earnings — plus, we started a new name

Published

1 day ago

October 25, 2025

admin

Week in review: Stocks hit records on inflation data, earnings — plus, we started a new name

Technology

AI spending is boosting the economy, but many businesses are in survival mode

Published

2 days ago

October 25, 2025

admin

AI spending is boosting the economy, but many businesses are in survival mode

Cameron Pappas, owner of Norton’s Florist

Norton’s

For Cameron Pappas, owner of Norton’s Florist in Birmingham, Alabama, the artificial intelligence boom is a world away.

While companies like Nvidia, Alphabet and Broadcom are lifting the stock market to fresh highs and bolstering GDP, Pappas is experiencing what’s happening in the real economy, one that’s far removed from Wall Street and Silicon Valley.

Small businesses like Norton’s, and companies of all sizes in retail, construction and hospitality, are struggling from higher costs brought by the Trump administration’s sweeping tariffs, and as downbeat consumers reduce their spending.

“We’ve just got an eagle eye on all of our costs,” Pappas, 36, told CNBC in an interview.

Norton’s generated $4 million in revenue last year, selling flowers, plants and gifts to locals. To avoid raising prices, which could cause customers to flee, Pappas has been forced to get creative, reworking some of his designs.

“If a bouquet has 25 stems in it, if you reduce that by three to four stems, then you’re able to keep the price the same,” Pappas said. “It’s really forced us to focus on that and to make sure that we’re pricing things the best that we possibly can.”

Pappas’ story and many like it are being masked in the macro data by the power of AI. In the first half of the year, AI-related capital expenditures contributed to 1.1% of GDP growth, according to a September report from JPMorgan Chase. That spending outpaced the U.S. consumer “as an engine of expansion,” the report said.

Total U.S. GDP increased at an annual rate of 3.8% during the second quarter of 2025 after falling 0.5% in the first quarter, the Commerce Department said.

U.S. manufacturing spending has contracted for seven straight months, according to the Institute for Supply Management. And construction spending has been flat to down, due to high interest rates and rising costs. Cushman & Wakefield said in a report this month that total project costs for construction in the fourth quarter will be up 4.6% from a year earlier because of tariffs on building materials.

The stock market shows a similar disconnect between AI and everybody else.

Nvidia CEO Jensen Huang delivers the keynote for the Nvidia GPU Technology Conference (GTC) at the SAP Center in San Jose, California, U.S. March 18, 2025.

Brittany Hosea-Small | Reuters

Eight tech companies are valued at $1 trillion or more and, to varying degrees, are all tied to AI. Those companies — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Tesla and Broadcom — make up about 37% of the S&P 500. Nvidia, with a $4.5 trillion market cap, accounts for over 7% of the benchmark’s value by itself.

Investors are giddy about the massive investments they’re seeing in AI infrastructure. Broadcom shares are up more than 50% this year after more than doubling in each of the prior two years, while Nvidia and Alphabet have jumped almost 40% in 2025.

That explains why the S&P 500 and Nasdaq are up 15% and 20%, respectively, reaching record highs on Friday, even as the government shutdown continues to cause economic angst.

Meanwhile, the S&P 500 subgroups that include consumer discretionary and consumer staples companies have increased by less than 5% year to date.

The latest troubling sign in the consumer market came on Thursday, when Target said it’s cutting 1,800 corporate jobs — the retailer’s first major round of layoffs in a decade. Target shares have plunged 30% this year.

“I think the message that the AI economy is sort of driving up the GDP numbers is a correct one,” Arun Sundararajan, a professor at New York University’s Stern School of Business, told CNBC in an interview. “There may be weakness in the rest of the economy, or not weakness, but there may be more modest growth.”

Investors will hear all about AI in the coming days, the busiest stretch of the quarter for tech earnings, and will be listening closely for additional guidance on capital expenditures. Meta, Microsoft and Alphabet report on Wednesday, followed by Apple and Amazon on Thursday.

Stock Chart IconStock chart icon

Nvidia’s stock over the last year.

Last month, Nvidia announced a $100 billion investment in OpenAI, a startup valued at $500 billion. The capital will help OpenAI deploy at least 10 gigawatts of Nvidia systems, which is roughly equivalent to the annual power consumption of 8 million U.S. households.

Shares of Advanced Micro Devices have doubled this year and soared more than 20% earlier this month after the chipmaker announced a deal with OpenAI, while Oracle has been on a tear of late due to its ties to OpenAI and the broader infrastructure buildouts.

“Are we sort of inflating the economy now, thereby setting ourselves up for a crash in the future?” Sundararajan said. He added that he’s not seeing signs that demand for AI infrastructure will slow anytime soon.

‘Tariff price management’

When it comes to local businesses, most only know about the AI gold rush from the news headlines. One in four small business owners are stuck in “survival mode” as they contend with challenges like rising costs and tariffs, according to a September KeyBank Survey. It’s a segment of the economy that routinely accounts for about 40% of the nation’s GDP.

Pappas’ flower shop was founded in 1921, and purchased by his dad in 2002. The business has survived the Great Depression, World War II and the Covid pandemic. Pappas said his father, who died in 2022, reminded him that these periods were “just another season” for Norton’s, and that such challenges come with the territory.

But Trump’s tariffs have created a whole new set of constraints, as roughly 80% of all cut flowers in the U.S. are imported from countries like Colombia and Ecuador, according to the U.S. Department of Agriculture.

More demand than supply gives companies an edge, Jim Cramer says

Published

2 days ago

October 24, 2025

admin

More demand than supply gives companies an edge, Jim Cramer says

“Supply constrained,” are the two of the most important words CNBC’s Jim Cramer said he’s heard so far during earnings season and explained why this dynamic is favorable for companies.

“When you’re supplied constrained, you have the ability to raise prices, and that’s the holy grail in any industry,” he said.

Intel‘s strong earnings results were in part because of more demand than supply, Cramer suggested. He noted that the company’s CFO, David Zinsner, said the semiconductor maker is supply constrained for a number of products, and that “industry supply has tightened materially.”

Along with Intel, other tech names that are also supply constrained and performing well on the market include Micron, AMD and Nvidia, Cramer continued.

These companies don’t have enough product in part because the storage needs of artificial intelligence are incredible high, Cramer said. He added that he thinks demand has overwhelmed supply because semiconductor capital equipment companies didn’t manufacture enough of their own machines as they simply didn’t anticipate such a volume of orders.

Outside of tech, Cramer said he thinks airplane maker Boeing and energy company GE Vernova are also supply constrained, adding that he thinks the former will say it’s short on most of its planes when it reports earnings next week. GE Vernova is supply constrained with its power equipment, like turbines that burn natural gas, he continued, which is the primary energy source for the ever-growing crop of data centers.

GE Vernova and Boeing are also set to be winners because they make big-ticket items that other countries can buy from the U.S. to help close the trade deficit, Cramer added.

“In the end, we have more demand than supply in a host of industries and that’s the ticket for good stock performance,” he said. “I don’t see that changing any time soon.”