Musk’s Twitter Deal And Starlink May Face National Security Review, Report Says

Topline

Elon Musk’s acquisition of Twitter and some of his businesses, including the Starlink satellite internet service, may come under national security review, according to a Bloomberg report, a move that would add further drama to and potentially halt the billionaire’s planned $44 billion acquisition of the social media company.

Elon Musk’s Twitter deal could face more headwinds if the U.S. government decides to open a national … [+] security review of it.

Anadolu Agency

Key Facts

According to Bloomberg, the Biden administration is considering the probe after Musk’s recent threat to cut off Ukraine’s access to Starlink’s satellite internet service unless the U.S. government agreed to foot the bill, something he has since walked back on.

Biden officials are also reportedly worried about Musk’s recent Russia-friendly proposal to end the war, which triggered diplomatic anger from Ukraine.

The involvement of several foreign investors in Musk’s plan to acquire Twitter, including Saudi Prince Alwaleed bin Talal, Qatar’s Sovereign Wealth Fund and the crypto exchange Binance, which is owned by Chinese-born billionaire Changpeng Zhao, has also raised concerns, the report adds.

The involvement of some foreign investors may allow the Committee on Foreign Investment in the United States to review the deal for potential national security risks, however, such a review is generally used to examine the purchase of a U.S. entity by a foreign buyer.

While he has not officially reacted to Bloomberg’s report, on Twitter Musk responded with a laughter emoji after one user tweeted: “It would be hysterical if the government stopped Elon from [overpaying]

for Twitter.”

Crucial Quote

During the earnings call for Tesla’s third-quarter results, Musk said: “Obviously, myself and the other investors are obviously overpaying for Twitter right now.” He added: “The long-term potential for Twitter, in my view, is, in order of magnitude, greater than its current value.”

Tangent

On Thursday, the Washington Post reported that Musk plans to lay off nearly 75% of Twitter’s workforce after completing the deal to purchase the company. Musk has yet to comment on this but an internal memo sent out by Twitter said it did not have “any confirmation of the buyer’s plans” and urged its staffers to not follow “rumors or leaked documents.” If reported layoffs go through, Musk could struggle to solve the issue of spam and bots on Twitter, a key issue he has repeatedly raised.

Key Background

Earlier this month, Musk tweeted out an unsolicited proposal to end Russia’s ongoing invasion of Ukraine. The proposal appeared to align with much of Moscow’s demands, including ensuring Ukrainian neutrality, a U.N.-run referendum in the four occupied Ukrainian provinces which would allow them to join Russia, and formally recognizing Crimea as part of Russian territory despite Moscow’s illegal annexation of the Ukrainian peninsula in 2014. Mirroring Putin and Kremlin’s claims, Musk’s tweet stated that Crimea has formally been part of Russia since 1783, “until Khrushchev’s mistake.” This triggered immediate condemnation from Ukrainian officials who accused him of parroting Russian propaganda. A week later, CNN reported, Musk was demanding the Pentagon to pay for the costs of operating Starlink’s satellite internet service in Ukraine, saying his company SpaceX would no longer continue to do so. This raised concerns inside Ukraine, whose military has used the satellite network as a critical means of communication. Musk eventually backtracked publicly, tweeting: “To hell with it…even though Starlink is still losing money…we’ll just keep funding Ukraine govt for free.”

Forbes Valuation

We estimate Musk’s current net worth to be $219.3 billion, making him the richest person in the world.