Electric car maker Tesla CEO Elon Musk meets with French Minister for the Economy and Finances Bruno Le Maire on the sidelines of the 6th edition of the “Choose France” Summit at the Chateau de Versailles, outside Paris on May 15, 2023.
Ludovic Marin | Pool | Via Reuters
Sen. Elizabeth Warren, D-Mass., sent a letter urging the U.S. Securities and Exchange Commission to investigate Tesla and its board of directors over possible “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” related to CEO Elon Musk‘s Twitter takeover.
In the letter sent to SEC Chair Gary Gensler on Monday, Warren wrote that the Tesla board’s “apparent lack of independence” from Musk, combined with “inaction and incomplete disclosures, raise questions about possible violations of securities laws and exchange rules which fall under SEC’s jurisdiction.”
The nine-page letter, first obtained by CNBC, reiterates concerns Warren had raised in earlier correspondence to Tesla Chair Robyn Denholm in December 2022, after Musk led a $44 billion buyout of Twitter. The take-private deal included $13 billion in debt, and Musk reportedly sold billions of dollars worth of his Tesla shares to finance the transaction.
The SEC’s Office of Public Affairs did not immediately respond to a request for comment.
Musk appointed himself CEO of Twitter after the deal closed and quickly made sweeping changes to the social network, while cutting more than three-quarters of the staff at the company and authorizing teams of employees from Tesla and SpaceX to assist him there.
Citing CNBC’s reporting on the matter, Warren wrote that taking Tesla employees over to Twitter could have comprised “possible violations of state and federal labor law,” and that Tesla’s board had not informed shareholders appropriately about the ways that the two companies have worked together, or may work together.
In recent weeks, Musk appointed Linda Yaccarino, who previously ran global advertising for Comcast’s NBCUniversal, to the role of Twitter CEO. Her hiring stirred hope that Twitter’s beleaguered advertising business would soon recover and that Musk would return to focus on Tesla and SpaceX.
Early Saturday, Musk admitted that Twitter’s cash flow remains negative after 50% ad revenue declines and “heavy debt.” Tesla is scheduled to report its second-quarter earnings after the bell on Wednesday of this week.
In her letter to the SEC chairman, the senator said that the appointment of Yaccarino still leaves Musk in charge of Twitter, where he is now CTO and executive chairman, and the arrangement could lead to conflicts of interest.
Among these, she wrote that at Twitter, Musk could “decide to run the company to maximize badly-needed revenue, even if that includes great deals for Tesla’s competitors and potential injury to Tesla.” Contrarily, she said Musk could opt to “run Twitter to benefit Tesla through favorable algorithms or free advertising.”
Musk and the SEC have already clashed repeatedly. The federal financial regulators charged Musk with civil securities fraud after he tweeted in 2018 that he was considering taking Tesla private for $420 per share and had “funding secured” to do so. The tweets caused a halt in trading of Tesla shares and sent the company’s share price seesawing for weeks.
Musk and Tesla paid fines and struck a revised consent decree to settle the charges in 2019, but Musk later moved to end that agreement or modify it. In May 2023, a federal appeals court judge rejected the Tesla CEO’s request to end the agreement, which requires that any of his tweets containing material Tesla business information be reviewed and approved by a securities lawyer at Tesla before Musk posts them.
Tesla did not immediately respond to a request for comment.
Disclosure: NBCUniversal is the parent company of CNBC.
Google chief executive Sundar Pichai speaks during the tech titan’s annual I/O developers conference on May 14, 2024, in Mountain View, California.
Glenn Chapman | Afp | Getty Images
Google will start using artificial intelligence to determine whether users are age appropriate for its products, the company said Wednesday.
Google announced the new technique for determining users’ ages as part of a blog focused on “New digital protections for kids, teens and parents.” The automation will be used across Google products, including YouTube, a spokesperson confirmed. Google has billions of users across its properties and users designated as under the age of 18 have restrictions to some Google services.
“This year we’ll begin testing a machine learning-based age estimation model in the U.S.,” wrote Jenn Fitzpatrick, SVP of Google’s “Core” Technology team, in the blog post. The Core unit is responsible for building the technical foundation behind the company’s flagship products and for protecting users’ online safety.
“This model helps us estimate whether a user is over or under 18 so that we can apply protections to help provide more age-appropriate experiences,” Fitzpatrick wrote.
The latest AI move also comes as lawmakers pressure online platforms to create more provisions around child safety. The company said it will bring its AI-based age estimations to more countries over time. Meta rolled out similar features that uses AI to determine that someone may be lying about their age in September.
Google, and others within the tech industry, have been ramping their reliance on AI for various tasks and products. Using AI for age-related content represents the latest AI front for Google.
The new initiative by Google’s “Core” team comes despite the company reorganization that unit last year, laying off hundreds of employees and moving some roles to India and Mexico, CNBC reported at the time.
AppLovin shares soared almost 30% in extended trading on Wednesday after the company reported earnings and revenue that sailed past analysts’ estimates and issued better-than-expected guidance.
Here’s how the company performed compared with analysts’ expectations, according to LSEG:
Earnings per share: $1.73 vs. $1.24 expected
Revenue: $1.37 billion vs. $1.26 billion expected
Net income in the quarter more than tripled to $599.2 million, or $1.73 per share, from $172.3 million, or 51 cents per share, a year earlier, the company said in a statement.
Revenue jumped 43% from $953.3 million a year earlier.
AppLovin was the best-performing U.S. tech stock last year, soaring more than 700%, driven by the company’s artificial intelligence-powered advertising system. In 2023, AppLovin released the updated 2.0 version of its ad search engine called AXON, which helps put more targeted ads on the gaming apps the company owns and is also used by studios that license the technology.
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AppLovin’s business has been split between advertising and apps, which is primarily made up of game studios that the company has acquired over the years. With the historic growth in its advertising unit, the apps business has become much less important, and now the company says it is selling it off.
“Today we’re announcing we’ve signed an exclusive term sheet to sell all of our apps business,” CEO Adam Foroughi said on the earnings call.
Later in the call, the company said it has signed a term sheet for the sale for a “total estimated consideration” of $900 million. That includes $500 million in cash, “with the remainder representing a minority equity stake in the combined private company.”
Advertising revenue climbed 73% in the quarter to almost $1 billion. The ad business was previously categorized as Software Platform. The company said it made the change because advertising accounts for “substantially all of the revenue in this segment.”
AppLovin said it expects first-quarter revenue of between $1.36 billion and 1.39 billion, exceeding the $1.32 billion average analyst estimate, according to LSEG. More than $1 billion of that will come from its advertising segment, as the company said it is “still in the early stages” of bolstering its AI models.
“The roadmap ahead is filled with opportunities for iteration,” the company said in its shareholder letter. “As we execute, we believe we can continue to drive value creation for our shareholders.”
Cisco CEO Chuck Robbins speaking on CNBC’s “Squawk Box” outside the World Economic Forum in Davos, Switzerland, on Jan. 22, 2025.
Gerry Miller | CNBC
Cisco shares climbed about 6% in extended trading on Wednesday after the networking hardware maker reported fiscal second-quarter results and guidance that topped Wall Street’s expectations.
Here’s how the company did against LSEG consensus:
Earnings per share: 94 cents adjusted vs. 91 cents expected
Revenue: $13.99 billion vs. $13.87 billion expected
Revenue increased 9% in the quarter, which ended on Jan. 25, from $12.79 billion a year earlier, according to a statement. The growth follows four quarters of revenue declines. The company said it had orders for artificial intelligence infrastructure that exceeded $350 million in the quarter.
Cisco now sees adjusted earnings of $3.68 to $3.74 for the 2025 fiscal year, with $56 billion to $56.5 billion in revenue. Analysts polled by LSEG had been looking for $3.66 in adjusted earnings per share and $55.99 billion in revenue. In November, the forecast was $3.60 to $3.66 in earnings per share and $55.3 billion to $56.3 billion in revenue.
Net income in the latest period slid almost 8% to $2.43 billion, or 61 cents per share, from $2.63 billion, or 65 cents per share, a year ago.
Revenue from the networking division totaled $6.85 billion, down 3% but more than the $6.67 billion consensus among analysts surveyed by StreetAccount.
The security unit contributed $2.11 billion. That is a 117% increase from a year earlier, thanks to the addition of Splunk. Analysts expected $2.01 billion, according to StreetAccount.
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Splunk, which Cisco bought in March 2024 for $27 billion, was accretive to adjusted earnings per share sooner than planned, Scott Herren, Cisco’s finance chief, was quoted as saying in the statement. Cisco’s total revenue would have been down 1% year over year if not for Splunk’s contribution, according to the statement.
Many technology companies have been trying to predict the effects from President Donald Trump’s newly established Department of Government Efficiency. But three-quarters of Cisco’s U.S. federal business comes from the Defense Department, while most of the headcount cutting thus far has occurred in other agencies, Cisco CEO Chuck Robbins said on a conference call with analysts.
“Everything seems to be progressing as we expected,” he said.
Customers do not appear to be pulling up orders before tariffs go into effect, Herren said on the conference call.
As of Thursday’s close, Cisco shares were up 5% so far in 2025, while the S&P 500 index had gained about 3%.