The Musk factor
Less than a week out from Election Day, both campaigns and their supporters are pulling out all of the stops. Few are doing as much as Elon Musk.
The tech billionaire is a force behind Donald Trump, putting both his prominent social media platform and millions of dollars to work bolstering the former president. It’s now becoming increasingly clear how much sway he might have in a potential second Trump administration and how his businesses could benefit.
Musk has become perhaps Trump’s biggest booster. His X account in recent days has been full of posts and reposts that either bolster Trump or denigrate Vice President Kamala Harris. In person, he’s showing up onstage at rallies, including the big one at Madison Square Garden in New York over the weekend.
Musk has also poured millions into pro-Trump super PACs, including one behind the $1 million giveaways to registered voters that has drawn legal opposition. 404 Media reports that another Musk-funded group is behind a Facebook ad campaign targeting registered Republicans with ostensibly pro-Harris messages — but actually promotes wildly exaggerated claims.
X is pushing more political content to users, often in support of Republicans. Reports by The Wall Street Journal and The Washington Post found that Musk’s social network is increasingly making election-related messages more prominent — even if the users haven’t shown any interest in seeing them, The Journal found.
A lot of what was shown to accounts that The Journal created for its report tended to be pro-Trump content from accounts including @catturd2, a prominent right-wing commentator. (That said, Musk has written that X itself would remain politically neutral, even if he isn’t.)
And Musk is also being promoted as a major influence on Trump policy. The tech billionaire’s businesses, including SpaceX, already have huge government contracts, and Tesla might benefit from a second Trump term — especially if Musk is given a government role.
In recent days, his pledge to help cut $2 trillion in federal spending if Trump wins has surged to the fore. Trump has promised to make the Tesla chief the head of a “government efficiency commission,” an initiative that Musk has called a Department of Government Efficiency. (Yes, it alludes to a meme.) And the financier John Paulson, a contender for Treasury secretary, said he’d help Musk with this task.
But even right-leaning commentators doubt the feasibility of Musk hitting his full target. That would probably require steep cuts to political third rails like Social Security, Medicare and military spending. “There’s a long history of the fantasy that one smart businessman will just identify trillions in waste, but that’s just not how it works,” Brian Riedl, a senior fellow at the Manhattan Institute, told The Post.
Musk himself has acknowledged that it would cause a lot of economic pain, at least in the short term. When an X user flagged that possibility, the mogul responded, “Sounds about right.”
In other political news: Here are some of the new conflicts Trump’s businesses might pose if he’s re-elected. Joe Rogan said he rejected conditions the Harris campaign had sought for an interview on his podcast. And while Trump spoke at Madison Square Garden, the Harris campaign will advertise on the Sphere, the Las Vegas venue owned by M.S.G.’s controlling Dolan family.
HERE’S WHAT’S HAPPENING
Boeing holds talks with striking workers. The aircraft maker and the International Association of Machinists and Aerospace Workers — along with the Biden administration’s top labor official — met for the first time since striking workers rejected a contract offer last week. Kelly Ortberg, Boeing’s new C.E.O., has said ending the strike would be a key first step to turning around the company.
Volkswagen profits plunge on high costs and weak demand in China. Europe’s biggest carmaker said third-quarter earnings fell 42 percent year-on-year, adding fuel to management’s push to radically overhaul the company. The slowdown comes as the European Union imposed tariffs of up to 45 percent on Chinese-made E.V.s, escalating a trade war over accusations that Beijing unfairly subsidizes its car makers.
David Ellison will control his family’s Paramount stake after the Skydance-Paramount deal goes through. The Ellison family changed a filing with the F.C.C. to show that the head of Skydance Media and son of the tech billionaire Larry Ellison would control their voting rights. An earlier filing had showed that Larry Ellison would be the controlling shareholder after Skydance combines with Paramount.
Is Google’s A.I. play starting to pay off?
Alphabet shares were up nearly 6 percent in premarket trading on Wednesday, after Google’s parent company reported solid earnings that allayed investor concerns about the huge sums it is spending on artificial intelligence.
Revenues of $88 billion in the third quarter were bolstered by its cloud business, and the results have helped lift the wider S&P 500 to within a whisker of another record high.
Here are the big Google takeaways:
Third-quarter profit rose 34 percent to $26.3 billion, outpacing Wall Street forecasts.
The closely watched cloud business, which sells computing power to other companies including A.I. firms, stood out, growing 35 percent on an annualized basis. That was taken as a sign that the vast resources being spent to commercialize its A.I. offering could be starting to pay off.
A.I. is increasingly embedded into its search and smartphones, and is also generating more than a quarter of the company’s new code to build new products.
Google, which ramped up investment to catch up to Microsoft and OpenAI, said it spent $13 billion on capital expenditures, including data centers and chips, up 62 percent from a year earlier.
Alphabet’s bumper results come after a run of bad news. The company is battling two antitrust cases, and a new generation of chatbots threatens its dominance in search. But the results showed that Google’s core search business is benefiting from the A.I. push, after the company introduced A.I. Overviews at the top of results pages.
“That should help Google investors sleep well at night,” Gene Munster, managing partner at Deepwater Asset Management, wrote on X.
But the regulatory challenges loom large. “The D.O.J. overhang doesn’t go away and thus negative regulatory catalysts could still lie ahead,” Brad Erickson, an analyst at RBC Capital Markets, wrote in an investor note on Wednesday. “But bigger picture, we believe the stock still has a wall of worry to climb.”
RBC raised its price target on the stock to $210, and maintained its “outperform” rating.
The next Big Tech test comes on Wednesday. Microsoft and Meta report, with investors looking for more evidence that their efforts to commercialize A.I. justify their lofty valuations. Last quarter, Meta’s Mark Zuckerberg said the company would spend up to $40 billion this year to bolster its position in strategic areas.
In other tech news: Elon Musk’s xAI is reportedly in talks to raise new funding at a $40 billion valuation. And shares in Reddit soared after the company reported that A.I. licensing deals and robust ad sales helped it notch its first quarterly profit as a public company.
Alphabet’s C.E.O., Sundar Pichai, will join Andrew in conversation at this year’s DealBook Summit on Dec. 4.
“We plan to engage with shareholders, including Starboard, and consider any good ideas that create long-term shareholder value, but I don’t think that the statement ‘something needs to change’ is really pragmatic because it’s coming 15 months late.”
— Albert Bourla, Pfizer’s C.E.O., in his first public comments about Starboard Value since the activist investor began a campaign to shake up the drug maker. Helping Bourla’s case was Pfizer drastically beating third-quarter earnings estimates on Tuesday, thanks in part to increased sales of Covid-19 treatments.
A star of the corporate defense bar jumps ship
One of the biggest white-collar legal stars is on the move. Barry Berke, who also played roles in the impeachments of Donald Trump, is leaving Kramer Levin for Gibson Dunn, where he will serve as a global co-chair of the law firm’s litigation group.
Berke is one of the country’s top cross-examiners. Since joining Kramer Levin in the 1990s, he has been involved in some of the most prominent legal battles related to corporate America. He represented CBS in its successful arbitration dispute with Les Moonves, its former C.E.O., and Michael Steinberg, then an executive at SAC Capital Advisors, in an insider trading case that was ultimately dropped.
More recently, Berke had another starring role: He built the investigative framework and drafted the articles of impeachment against Trump in 2019 and served as special oversight counsel to prosecute the case. He also advised on Trump’s second impeachment in 2021.
Berke was partly attracted to Gibson Dunn because of its commitment to its litigation practice. Many firms now use the business more as a broader service for corporate clients. Gibson Dunn has its own high-profile track record in litigation, having successfully defended same-sex marriage for Californians before the Supreme Court and Walmart in a gender discrimination lawsuit.
“The firm was very clear to us how important their litigation trial practice is,” Berke, 60, told DealBook. He was recruited by Orin Snyder, one of the top litigators in the country. Among the lawyers he will work with is Ted Olson, one of the country’s leading appellate and constitutional law lawyers.
Berke is also bringing four lawyers with him from Kramer Levin: Dani James, Michael Martinez, Darren LaVerne and Jordan Estes.
Having both Berke and Snyder will help cement Gibson Dunn’s spot as a top litigation shop, and will solidify its leading position for firms doing pro bono work.
Berke may soon be back in the spotlight. His arrival at Gibson Dunn comes days ahead of a presidential election that some Republicans have threatened to contest in the courts. “It is fair to say that people are very focused — and have discussed with me — the concerns that legal issues may again predominate following the voting on Nov. 5,” Berke said.
Barbara Becker, Gibson Dunn’s managing partner, said the timing was a coincidence. “I don’t view the election as relevant to the decision to have that group join us,” she told DealBook. “But there could be opportunities, depending on how things shake out.”
In other job moves: Will Hurd, a former Texas representative and C.I.A. officer, is joining Chaos Industries, a defense tech start-up backed by Joe Lonsdale’s 8VC, as chief strategy officer.
THE SPEED READ
Deals
Arctos Partners is said to be in talks to buy a minority stake in the N.F.L.’s Buffalo Bills. (Bloomberg)
BlackRock is reportedly in advanced talks to buy HPS Investment Partners as it seeks to expand in the booming private credit sector. (Bloomberg)
Keith Gill, the meme-stock ringleader also known as “Roaring Kitty,” has sold off his shares in Chewy after stirring speculation that he was angling for a bigger stake in the pet-supplies retailer. (WSJ)
Elections, politics and policy
Why Florida accidentally banned banks from selling investments in the state for four weeks. (WSJ)
“Will Silicon Valley’s next member of Congress be tough on tech?” (WaPo)
Best of the rest
Practically everyone in Japan it seems is tuning in to watch Shohei Ohtani in his first World Series live, except traders in Tokyo who can’t watch games on their phones or on TV at work. (Bloomberg)
“At Three Mile Island, a Test of Nuclear Power’s Promise” (NYT)
U.S. efforts to contain China’s ambitions for tech supremacy are faltering. (Bloomberg)
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