What DeSantis means for Twitter
Gov. Ron DeSantis of Florida is expected to finally announce his presidential campaign on Wednesday night — but not on a stalwart of conservative media, like Fox News. Instead, the Republican star will do so live on Twitter, in a conversation with Elon Musk.
The move underscores both that Twitter, under its billionaire owner, has moved to embrace the political right and that Mr. DeSantis’s top business supporters so far are tech-industry libertarians, rather than traditional Republican moguls.
Twitter is becoming a conservative media hot spot in the Musk era. That started last year, when the company lifted bans on thousands of accounts, including ones that had spread misinformation about the pandemic and the 2020 elections.
Since then, Tucker Carlson has said he would revive his show on the social network after losing his Fox News slot, though Mr. Musk has said that Twitter hasn’t signed a deal with him. And The Daily Wire, a conservative media outlet, will reportedly make Twitter the home for all its podcasts.
In some ways, as Axios notes, Twitter is benefiting from conservative dissatisfaction with Fox News, and can claim to be outside the mainstream media world that Rupert Murdoch’s network inhabits.
Mr. Musk himself has more openly embraced the right. Though the billionaire said he voted for President Biden in 2020, the two have since clashed over issues including the White House’s embrace of unions.
While Mr. Musk has expressed support for Mr. DeSantis before, the Twitter owner said on Tuesday that he wasn’t formally backing any Republican candidate. Indeed, earlier this week Mr. Musk retweeted a campaign kickoff video for Senator Tim Scott of South Carolina.
The business consequences for Twitter remain unclear. Mr. Musk’s approach is markedly different from the more politically neutral stance that other social media companies have tried to strike. Twitter has already seen a number of left-leaning users defect to other platforms.
It’s unclear how Mr. Musk’s approach will affect efforts by Twitter’s incoming C.E.O., Linda Yaccarino, to woo mainstream advertisers. While some progress has already been made, skittish brands may be tempted to flee again if the platform grows more overtly political.
Mr. DeSantis’s move highlights his mixed relationship with business. The Florida governor has supported legislation to rein in “Silicon Valley elites.” But he has also won support from tech libertarians including the venture capitalists David Sacks (who is participating in Wednesday’s Twitter event) and Joe Lonsdale.
Outside tech, Mr. DeSantis’s publicly known business supporters include David Horowitz, a real-estate magnate, and the financier Hal Lambert, according to CNBC. But so far they don’t include stalwart Republican donors like Ken Griffin and Steve Schwarzman, some of whom have taken issue with Mr. DeSantis’s social policies.
HERE’S WHAT’S HAPPENING
Target pulls some Pride Month merchandise after threats from customers. The retailer said it had “experienced threats impacting our team members’ sense of safety and well-being while at work,” many tied to swimwear meant for transgender women. That echoes conservative objections to other attempts at catering for transgender customers, including against Bud Light.
Binance reportedly mixed customer money with corporate funds. The world’s largest crypto exchange commingled cash from each in 2020 and 2021, according to Reuters, which cited unnamed sources and bank records. If true, that could violate U.S. financial regulations; Binance denied the report, and Reuters said it had found no evidence that customers lost money.
Meta prepares for more job cuts. The social media giant reportedly plans to lay off thousands more workers on Wednesday. Meta, the parent of Facebook and Instagram, already announced in March that it was laying off 10,000 employees amid a slumping digital advertising market.
Bernard Arnault’s crown as the world’s wealthiest person gets wobblier. The LVMH chief’s net worth fell by $11 billion on Tuesday, amid investor concerns that a slowing U.S. economy will dampen a booming market for luxury goods. Arnault’s fortune is about $191.6 billion on paper, according to Bloomberg — just $11 billion ahead of Elon Musk.
Netflix finally moves to crack down on password-sharing in the U.S. The streaming giant announced that American subscribers would need to start paying $8 a month to add users to their accounts. It’s a push for more revenue, reversing Netflix’s yearslong indifference to shared accounts.
Wall Street is preparing for the worst
With debt-ceiling negotiations bearing no fruit and the “X-date” — the point at which the government will run out of cash to pay its bills — arriving as soon as June 1, the market is starting to price in a worst-case scenario.
Stocks suffered their biggest sell-off in three weeks on Tuesday, and S&P 500 futures on Wednesday morning point to further losses. Citing the deadlocked talks, analysts at JPMorgan Chase suggested that investors dump stocks for cash.
In a further sign of uncertainty, investors are offering more for Microsoft corporate bonds that come due in August than they are for Treasury bills that mature in the same period, a sign they see the government debt as more risky.
Markets are increasingly worried a timely deal might be out of reach. Beyond the current impasse, investors have been worried that Speaker Kevin McCarthy may not be able to win over significant portions of his fellow House Republicans, and he has only a slim majority.
Meanwhile, the three major credit rating agencies would be compelled to downgrade America’s debt if the government missed even a single repayment, The Times’s Joe Rennison reports. Even the prospect of reaching the X-date with no deal could be enough for Moody’s to review its outlook, said William Foster, the agency’s lead U.S. analyst.
Any downgrade would kick the U.S. out of an exclusive club of 12 nations with the highest credit rating, which includes Canada, Germany and Singapore.
Some commentators fear the U.S.’s fiscal reputation has already taken a hit. “We are sending a very negative signal about our ability to run our economy, let alone be an anchor for the rest of the world,” Mohamed El-Erian, an economist and an adviser at Allianz, told CNBC on Tuesday.
What happened to the S.E.C.’s climate disclosure rules?
More than a year has passed since the S.E.C. proposed rules to make companies disclose emissions data and other climate-related risks — and DealBook hears the agency is nowhere close to finalizing them.
Why? The complexity of designing such rules is one reason. But the legal landscape has also changed since last year, making it more difficult to write regulations that could withstand court challenges.
The Supreme Court is inclined to limit agencies’ power. Several justices have embraced what’s known as the “major questions doctrine,” which holds that Congress, not executive-branch regulators, must decide issues of economic and political significance.
It shot to new prominence last June, when the court struck down an E.P.A. rule on power plant emissions.
There’s no clear path to overcoming that doctrine. Gary Gensler, the S.E.C.’s chair, told DealBook last year that the E.P.A. case set a “significant” precedent that would affect the agency’s drafting of climate rules.
The S.E.C. will need to make the case that it has a history of requiring environmental disclosures from companies and the congressional authority to do so. (The agency didn’t respond to a request for comment.)
The S.E.C. is also worried about a challenge on First Amendment grounds. Regulators expect to face lawsuits claiming that the required disclosures are unconstitutional. While the S.E.C. has fought cases like that before, not always successfully, it now faces a conservative supermajority on the Supreme Court that looks dimly at any expansion of executive power.
That said, companies operating globally will still need to prepare for climate disclosures: The European Union and other regions are moving ahead with their own mandates.
“Even if you were, like, an evil C.E.O. trying to replace all journalists with A.I., you would be very unsuccessful.”
— Jonah Peretti, the C.E.O. of Buzzfeed. The digital media publisher, which shut down Buzzfeed News last month, has embraced artificial intelligence in an effort to boost revenues and revive its battered stock price.
The heat is on in the chip war
After Beijing fired back in its trade war with Washington by partially banning some chips from Micron, the Biden administration and its allies are considering investment restrictions that would reduce the extent of Western companies’ business in China.
U.S. and European trade envoys are expected to discuss the matter next week. At the gathering of the Trade and Technology Council, officials are expected to discuss subjects like restricting the flow of investment and intellectual property to China, according to Bloomberg. The wording is still being negotiated, but limits on semiconductor exports are seen as a key part of any framework agreement.
The escalation of tensions follows last weekend’s Group of 7 summit, at which Western leaders pressed China on issues including trade and Taiwan. Seemingly in response, Beijing announced its clampdown on Micron and promised to strengthen ties with Moscow.
Tech companies are getting worried. Jensen Huang, the C.E.O. of the chip giant Nvidia, told The Financial Times that measures like semiconductor export restrictions could hurt U.S. businesses, by driving Chinese customers toward homegrown alternatives. “The U.S. has to be careful,” he said. “China is a very important market for the technology industry.”
More China-U.S. news:
Commerce Secretary Gina Raimondo is scheduled to meet on Wednesday with her Chinese counterpart, Wang Wentao, in an effort to “thaw” relations. It would be the first meeting of this kind at cabinet level under the Biden administration.
A high-ranking Republican congressman is calling on the Commerce Department to introduce trade curbs on a Chinese chip maker, ChangXin Memory Technologies, in retaliation for Beijing’s move against Micron.
THE SPEED READ
Meta agreed to sell Giphy, a site for the moving images known as GIFs, to Shutterstock at a $260 million loss after being forced to offload it by regulators. (Guardian)
Anthropic, a chatbot developer that competes with OpenAI, raised $450 million in new financing led by Spark Capital and Google. (Bloomberg)
Virgin Orbit, the bankrupt space satellite start-up backed by Richard Branson, has sold its remaining assets and will shut down. (WaPo)
President Biden’s “Buy America” policy risks derailing his plans for bullet trains. (Politico)
“The White House wants your opinion on how to regulate A.I.” (Semafor)
Best of the rest
Tech executives are looking to the government to address the prospect of artificial intelligence wiping out millions of jobs. (NYT)
Are Japanese families’ Netflix and Disney+ subscriptions pushing down the yen? (Insider)
Jeffrey Katzenberg on the quick flameout of Quibi, the video app he co-founded: “I’m proud to own the failure.” (Variety)
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Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBC’s “Squawk Box” and the author of “Too Big to Fail.” He is also a co-creator of the Showtime drama series “Billions.” @andrewrsorkin • Facebook
Bernhard Warner joined the The Times in 2022 as a senior editor for DealBook. Previously he was a senior writer and editor at Fortune focusing on business, the economy and the markets. @bernhardwarner
Sarah Kessler is a senior staff editor for DealBook and the author of “Gigged,” a book about workers in the gig economy. @sarahfkessler
Michael de la Merced joined The Times as a reporter in 2006, covering Wall Street and finance. Among his main coverage areas are mergers and acquisitions, bankruptcies and the private equity industry. @m_delamerced • Facebook
Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. @laurenshirsch
Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors. @el72champs
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