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Tesla Chief Executive Office Elon Musk speaks at his company’s factory in Fremont, California.

Noah Berger | Reuters

Elon Musk, the CEO of SpaceX, Tesla and Twitter, has accused “the media,” and “elite colleges and high schools” of being “racist” against white and Asian people, espousing his views without providing evidence on Sunday.

Musk posted his comments on Twitter, where he boasts nearly 130 million followers, in response to news that media organizations around the country decided to cut the comic strip “Dilbert” from syndication after its creator, Scott Adams, delivered a racist tirade in a video on his YouTube channel last week.

In the video, Adams discussed a poll conducted by right-leaning Rasmussen Reports that said 26% of Black respondents disagreed with the statement “It’s OK to be white.” The phrase referenced in their poll has been labeled a “hate slogan” by the Anti-Defamation League. In his video, Adams called Black people who rejected that phrase as a “hate group.”

Adams also said that he personally chose to live in a community where few or no Black people lived, and then advised his white viewers to “get the hell away from Black people,” saying he didn’t “want to have anything to do with them.”

Adams’ video was published during Black History month in the US, which was established in 1976 by President Gerald Ford as a period during which to honor the struggles and contributions of Black Americans.

Among the news outlets that dropped “Dilbert” were The Los Angeles Times, The Oregonian, The Cleveland Plain Dealer, the Washington Post and USA Today.

Musk’s track record

Brian Levin, a civil rights attorney and director of the Center for the Study of Hate and Extremism at California State University said, in response to Musk’s tweets:

“Systemic racism requires not only widespread bigotry to be held within a group but also a structural component that allows discrimination and oppression to be imposed on a minority because of an advantage of access and power. A white billionaire from South Africa who recently lost a high profile racial discrimination case may not be in the best position to offer counsel.”

As CNBC previously reported, a San Francisco federal court ruled that Tesla must pay a former worker, Owen Diaz, for damages after he endured a hostile work environment and racist abuse at the company’s factory where he previously worked as an elevator operator.

Additionally, the EEOC, a federal agency responsible for enforcing civil rights laws against workplace discrimination, has issued a cause finding against Tesla according to a financial filing from the company last year.

Prior to the EEOC finding, the California Civil Rights Department (formerly known as the Department of Fair Employment and Housing) sued Tesla after a three year investigation, alleging widespread racist discrimination at Tesla factories and facilities across the state.

The CRD alleged that Tesla has kept Black workers in lower-level roles at the company even when they have the skills and experience to be promoted to more senior roles; assigned Black workers more demanding, dangerous and dirty work in their facilities; and retaliated against Black workers who complained formally about what they endured, including racist slurs used by managers.

Tesla called the CRD’s lawsuit “misguided,” and later counter-sued the agency.

The data on racism

Musk made his claims about “the media” and some higher educational institutions and high schools in the US without presenting any evidence.

Specifically, he wrote, “The media is racist.” He then added, “For a *very* long time, US media was racist against non-white people, now they’re racist against whites & Asians. Same thing happened with elite colleges & high schools in America. Maybe they can try not being racist.” 

According to Pew Research, newsroom employees are much more likely to be white (and male) than U.S. workers overall. In film and TV, according to McKinsey research, “Black talent is underrepresented across the industry, particularly off-screen.” Less than 6% of the writers, directors, and producers of US-produced films are Black, McKinsey found.

According to the most recent available US Census Bureau data, about 29% of non-Hispanic white people in the US have attained a bachelor’s degree or higher levels of education, about 18.4% of Black people in the US have attained that level of education, and about 51.3% of Asian people have attained that level of education.

Despite Asian American educational attainment, Asians are underrepresented in leadership roles in U.S. academic libraries and higher education, according to research by Mihoko Hosoi, published in the Journal of Library Administration in 2022.

Musk also replied to one Twitter account that said unarmed white people impacted by police violence only get a fraction of the media attention paid to Black people injured or killed by police. Musk claimed that the media coverage is “Very disproportionate to promote a false narrative.”

According to research by Brookings Institute, “Black people are 3.5 times more likely than white people to be killed by police when Blacks are not attacking or do not have a weapon,” and “Black teenagers are 21 times more likely than white teenagers to be killed by police.”

Hate speech on Twitter

Imran Ahmed, the CEO and founder of the Center for Countering Digital Hate said in response to Musk’s tweets, “Elon Musk seeks to portray himself as some weird, bizarro champion of anti-racism whereas in reality when he took over Twitter, he made a series of disturbing decisions to change its rules to welcome racist hate back onto the platform and, as our research has shown, to profit from the controversy and attention hate generates.”

Ahmed also called on remaining advertisers to re-evaluate whether they want to spend their budgets on Twitter, given Musk’s beliefs and changes he has made to the Twitter platform.

Since leading a $44 billion leveraged buyout of Twitter late last year, and appointing himself “Chief Twit” or CEO, Musk has stirred controversy and lost money at the social media business.

Under Musk’s watch, Twitter has restored the accounts of some previously banned and divisive figures, including neo-Nazi website founder Andrew Anglin. His moves led to an unprecedented rise in hate speech on the platform, the Center found, and drew an immediate outcry from civil rights leaders.

Hundreds of Twitter’s top advertisers have since halted or pulled back on ad spending there. One firm estimated that Twitter’s ad revenue declined as much as 70% in December from the previous year, Reuters reported. Musk acknowledged in a November tweet that the company suffered a “massive drop in revenue” after advertisers paused spending on the social media platform.

Musk and representatives at Twitter, SpaceX, and Tesla did not immediately respond to requests for comment.

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OpenAI dissolves team focused on long-term AI risks, less than one year after announcing it

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OpenAI dissolves team focused on long-term AI risks, less than one year after announcing it

OpenAI has disbanded its team focused on the long-term risks of artificial intelligence just one year after the company announced the group, a source familiar with the situation confirmed to CNBC on Friday.

The person, who spoke on condition of anonymity, said that some of the team members are being re-assigned to multiple other teams within the company.

The news comes days after both team leaders, OpenAI co-founder Ilya Sutskever and Jan Leike, announced their departures from the Microsoft-backed startup. Leike on Friday wrote that OpenAI’s “safety culture and processes have taken a backseat to shiny products.”

The news was first reported by Wired.

OpenAI’s Superalignment team, announced last year, has focused on “scientific and technical breakthroughs to steer and control AI systems much smarter than us.” At the time, OpenAI said it would commit 20% of its computing power to the initiative over four years.

Sutskever and Leike on Tuesday announced their departures on X, hours apart, but on Friday, Leike shared more details about why he left the startup.

“I joined because I thought OpenAI would be the best place in the world to do this research,” Leike wrote on X. “However, I have been disagreeing with OpenAI leadership about the company’s core priorities for quite some time, until we finally reached a breaking point.”

Leike wrote that he believes much more of the company’s bandwidth should be focused on security, monitoring, preparedness, safety and societal impact.

“These problems are quite hard to get right, and I am concerned we aren’t on a trajectory to get there,” he wrote. “Over the past few months my team has been sailing against the wind. Sometimes we were struggling for compute and it was getting harder and harder to get this crucial research done.”

Leike added that OpenAI must become a “safety-first AGI company.”

“Building smarter-than-human machines is an inherently dangerous endeavor,” he wrote. “OpenAI is shouldering an enormous responsibility on behalf of all of humanity. But over the past years, safety culture and processes have taken a backseat to shiny products.”

Leike did not immediately respond to a request for comment, and OpenAI did not immediately provide a comment.

The high-profile departures come months after OpenAI went through a leadership crisis involving co-founder and CEO Sam Altman.

In November, OpenAI’s board ousted Altman, claiming in a statement that Altman had not been “consistently candid in his communications with the board.”

The issue seemed to grow more complex each following day, with The Wall Street Journal and other media outlets reporting that Sutskever trained his focus on ensuring that artificial intelligence would not harm humans, while others, including Altman, were instead more eager to push ahead with delivering new technology.

Altman’s ouster prompted resignations – or threats of resignations – including an open letter signed by virtually all of OpenAI’s employees, and uproar from investors, including Microsoft. Within a week, Altman was back at the company, and board members Helen Toner, Tasha McCauley and Ilya Sutskever, who had voted to oust Altman, were out. Sutskever stayed on staff at the time but no longer in his capacity as a board member. Adam D’Angelo, who had also voted to oust Altman, remained on the board.

When Altman was asked about Sutskever’s status on a Zoom call with reporters in March, he said there were no updates to share. “I love Ilya… I hope we work together for the rest of our careers, my career, whatever,” Altman said. “Nothing to announce today.”

On Tuesday, Altman shared his thoughts on Sutskever’s departure.

“This is very sad to me; Ilya is easily one of the greatest minds of our generation, a guiding light of our field, and a dear friend,” Altman wrote on X. “His brilliance and vision are well known; his warmth and compassion are less well known but no less important.” Altman said research director Jakub Pachocki, who has been at OpenAI since 2017, will replace Sutskever as chief scientist.

News of Sutskever’s and Leike’s departures, and the dissolution of the superalignment team, come days after OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface, the company’s latest effort to expand the use of its popular chatbot.

The update brings the GPT-4 model to everyone, including OpenAI’s free users, technology chief Mira Murati said Monday in a livestreamed event. She added that the new model, GPT-4o, is “much faster,” with improved capabilities in text, video and audio.

OpenAI said it eventually plans to allow users to video chat with ChatGPT. “This is the first time that we are really making a huge step forward when it comes to the ease of use,” Murati said.

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BlackRock funds are ‘crushing shareholder rights,’ says activist Boaz Weinstein

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BlackRock funds are ‘crushing shareholder rights,' says activist Boaz Weinstein

Boaz Weinstein, founder and chief investment officer of Saba Capital Management, during the Bloomberg Invest event in New York, US, on Wednesday, June 7, 2023. 

Jeenah Moon | Bloomberg | Getty Images

Boaz Weinstein, the hedge fund investor on the winning side of JPMorgan Chase’s $6.2 billion, “London Whale” trading loss in 2011, is now taking on index fund giant BlackRock

On Friday, Weinstein‘s Saba Capital detailed in a presentation seen by CNBC its plans to push for change at 10 closed-end BlackRock funds that trade at a significant discount to the value of their underlying assets compared to their peers. Saba says the underperformance is a direct result of BlackRock’s management.

The hedge fund wants board control at three BlackRock funds and a minority slate at seven others. It also seeks to oust BlackRock as the manager of six of those ten funds.

“In the last three years, nine of the ten funds that we’re even talking about have lost money for investors,” Weinstein said on CNBC’s “Squawk Box” earlier this week.

At the heart of Saba’s “Hey BlackRock” campaign is an argument around governance. Saba says in its presentation that BlackRock runs those closed-end funds the “exact opposite” way it expects companies to run themselves.

BlackRock “is talking out of both sides of its mouth” by doing this, Saba says. That’s cost retail investors $1.4 billion in discounts, by Saba’s math, on top of the management fees it charges.

BlackRock, Saba says in the deck, “considers itself a leader in governance, but is crushing shareholder rights.” At certain BlackRock funds, for example, if an investor doesn’t submit their vote in a shareholder meeting, their shares will automatically go to support BlackRock. Saba is suing to change that.

A BlackRock spokesperson called that assertion “very misleading” and said those funds “simply require that most shareholders vote affirmatively in favor.”

The index fund manager’s rebuttal, “Defend Your Fund,” describes Saba as an activist hedge fund seeking to “enrich itself.”

The problem and the solution

Closed-end funds have a finite number of shares. Investors who want to sell their positions have to find an interested buyer, which means they may not be able to sell at a price that reflects the value of a fund’s holdings.

In open-ended funds, by contrast, an investor can redeem its shares with the manager in exchange for cash. That’s how many index funds are structured, like those that track the S&P 500.

Saba says it has a solution. BlackRock should buy back shares from investors at the price they’re worth, not where they currently trade.

“Investors who want to come out come out, and those who want to stay will stay for a hundred years, if they want,” Weinstein told CNBC earlier this week.

Weinstein, who founded Saba in 2009, made a fortune two years later, when he noticed that a relatively obscure credit derivatives index was behaving abnormally. Saba began buying up the underlying derivatives that, unbeknownst to him, were being sold by JPMorgan’s Bruno Iksil. For a time, Saba took tremendous losses on the position, until Iksil’s bet turned sour on him, costing JPMorgan billions and netting Saba huge profits.

Saba said in its investor deck that the changes at BlackRock could take the form of a tender offer or a restructuring. The presentation noted that BlackRock previously cast its shares in support of a tender at another closed-end fund where an activist was pushing for similar change.

At the worst-performing funds relative to their peer group, Saba is seeking shareholder approval to fire the manager. In total, BlackRock wants new management at six funds, including the BlackRock California Municipal Income Trust (BFZ), the BlackRock Innovation and Growth Term Trust (BIGZ) and the BlackRock Health Sciences Term Trust (BMEZ).

“BlackRock is failing as a manager by delivering subpar performance compared to relevant benchmarks and worst-in-class corporate governance,” the deck says.

If Saba were to win shareholder approval to fire BlackRock as manager at the six funds, the newly constituted boards would then run a review process over at least six months. Saba says that in addition to offering liquidity to investors, its board nominees would push for reduced fees and for other unspecified governance fixes.

A BlackRock spokesperson told CNBC that the firm has historically taken steps to improve returns at closed-end funds when necessary.

“BlackRock’s closed-end funds welcome constructive engagement with thoughtful shareholders who act in good faith with the shared goal of enhancing long-term value for all,” the spokesperson said.

Weinstein said Saba has run similar campaigns at roughly 60 closed-end funds in the past decade but has only taken over a fund’s management twice. The hedge fund sued BlackRock last year to remove that so-called “vote-stripping provision” at certain funds and filed another lawsuit earlier this year.

BlackRock has pitched shareholders via mailings and advertisements. “Your dependable, income-paying investment,” BlackRock has told investors, is under threat from Saba.

Saba plans to host a webinar for shareholders on Monday but says BlackRock has refused to provide the shareholder list for several of the funds. The BlackRock spokesperson said that it has “always acted in accordance with all applicable laws” when providing shareholder information, and that it “never blocked Saba’s access to shareholders.”

“What we want is for shareholders, which we are the largest of but not in any way the majority, to make that $1.4 billion, which can be done at the press of a button,” Weinstein told CNBC earlier this week.

WATCH: CNBC’s full interview with Saba Capital’s Boaz Weinstein

Watch CNBC's full interview with Saba Capital's Boaz Weinstein

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As Tesla layoffs continue, here are 600 jobs the company cut in California

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As Tesla layoffs continue, here are 600 jobs the company cut in California

As part of Tesla’s massive restructuring, the electric-vehicle maker notified the California Employment Development Department this week that it’s cutting approximately 600 more employees at its manufacturing facilities and engineering offices between Fremont and Palo Alto.

The latest round of layoffs eliminated roles across the board — from entry-level positions to directors — and hit an array of departments, impacting factory workers, software developers and robotics engineers.

The cuts were reported in a Worker Adjustment and Retraining Notification, or WARN, Act filing that CNBC obtained through a public records request.

Facing both weakening demand for Tesla electric vehicles and increased competition, the company has been slashing its headcount since at least January. CEO Elon Musk told employees in a memo in April that the company would cut more than 10% of its global workforce, which totaled 140,473 employees at the end of 2023.

Previous filings revealed that Tesla would cut more than 6,300 jobs across California; Austin, Texas; and Buffalo, New York.

Musk said on Tesla’s quarterly earnings call on April 23 that the company had built up a 25% to 30% “inefficiency” over the past several years, implying the layoffs underway could impact tens of thousands more employees than the 10% number would suggest.

According to the WARN filing, the 378 job cuts in Fremont, home to Tesla’s first U.S. manufacturing plant, included people involved in staffing and running vehicle assembly. There were 65 cuts at the company’s Kato Rd. battery development center.

Tesla didn’t respond to a request for comment.

Among the highest-level roles eliminated in Fremont were an environmental health and safety director and a user experience design director.

In Palo Alto, home to the company’s engineering headquarters, 233 more employees, including two directors of technical programs, lost their jobs.

Tesla has also terminated a majority of employees involved in designing and improving apps made for customers and employees, according to two former employees directly familiar with the matter. The WARN filing shows that to be the case, with many cut from the team at Tesla’s Hanover Street location in Palo Alto.

Tesla faces reduced demand for cars it makes in Fremont, including its older Model S and X vehicles and Model 3 sedan. Total deliveries dropped in the first quarter from a year earlier, and Tesla reported its steepest year-over-year revenue decline since 2012.

An onslaught of competition, especially in China, has continued to pressure Tesla’s sales in the second quarter. Xiaomi and Nio have each launched new EV models, which undercut the price of Tesla’s most popular vehicles.

Tesla’s stock price has tumbled about 30% so far this year, while the S&P 500 is up 11%.

Musk has been trying to convince investors not to focus on vehicle sales and instead to back Tesla’s potential to finally deliver self-driving software, a robotaxi, and a “sentient” humanoid robot. Musk and Tesla have long promised customers self-driving software that would turn their existing EVs into robotaxis, but the company’s systems still require constant human supervision.

Other recent job cuts at Tesla included the team responsible for building out the Supercharger, or electric-vehicle fast-charging network, in the U.S.

Tesla disclosed plans in its annual filing for 2023 to grow and optimize its charging infrastructure “to ensure cost effectiveness and customer satisfaction.” Tesla said in the filing that it needed to expand its “network in order to ensure adequate availability to meet customer demands,” after other auto companies announced plans to adopt the North American Charging Standard.

Since cutting most of its Supercharger team, Tesla has reportedly started to rehire at least some members, a move reminiscent of the job cuts Musk made at Twitter after he bought the company and later rebranded it as X. Musk told CNBC’s David Faber last year that he wanted to rehire some of those he let go.

Read the latest WARN filing in California here:

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