6 setbacks for Elon Musk in a brutal 2023

6 setbacks for Elon Musk in a brutal 2023

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Elon Musk has faced dozens of setbacks over the past year, from massive advertising losses on the platform formerly known as Twitter to repeated allegations of antisemitism to public legal battles with the Securities and Exchange Commission (SEC) and various watchdog groups.

Musk’s latest blow came Friday when X lost its bid to block a California content moderation law.

Here’s a look back at the billionaire tech mogul’s somewhat brutal year:

Musk rings in 2023 plagued by advertiser losses following takeover

Musk began the year still reeling from significant advertiser losses on Twitter, the platform that his since renamed X. 

After he acquired the social media company for $44 billion in October 2022 and quickly began implementing significant changes, scores of advertisers pulled back on their spending on the platform.

Musk immediately fired top executives, laid off thousands of employees, rolled back content moderation policies and reinstated previously banned accounts, such as that of former President Trump.

Within a month, half of Twitter’s top 100 advertisers had stopped spending on the platform, according to a report from the left-leaning media watchdog group Media Matters for America.

By January, Guinness World Records reported that Musk had secured the world record for the largest loss of personal fortune in history, after losing about $182 billion between November 2021 and January 2023. 

While much of Musk’s losses were attributed to the poor performance of stock in his electric car company Tesla, Guinness noted that the billionaire’s purchase of Twitter accelerated the decline in Tesla stock value.

In late March, Musk told Twitter employees that the company was valued at $20 billion, less than half of what he bought it for in October 2022.

Musk continues to upend Twitter policies, rebrands to X

While Musk sought to draw advertisers back to Twitter, he also continued to implement controversial changes to the platform.

Twitter officially began to phase out its legacy verification system and transition to a subscription-based service in April after a failed first attempt in November 2022,

The shift sparked confusion as Twitter’s blue check marks — which previously were given to public figures and organizations to denote that their accounts were authentic — now indicated whether a user had paid an $8 monthly subscription fee.

Impersonators sowed chaos. A fake account posing as New York Gov. Kathy Hochul (D) claiming she planned to run as a Republican in the governor’s race and another impersonating Sudan’s paramilitary Rapid Support Forces (RSF) alleging the group’s leader had been killed.

Musk also faced backlash in April when Twitter labeled NPR’s account as “state-affiliated media.” The label had previously been reserved for state propaganda outlets like Russia’s RT and China’s Xinhua.

Twitter eventually replaced the “state-affiliated media” label with a “government funded” label and began applying it to accounts from other news outlets that receive some public funding, such as PBS, BBC and CBC. 

After NPR and other outlets said they would no longer use Twitter, Musk opted to remove the labels from the platform altogether. While PBS, BBC and CBC eventually returned to Twitter, NPR did not.

In late July, Musk’s decision to rebrand Twitter to X also drew widespread mockery and criticism online, as the patchwork rollout left the platform’s original blue bird logo in several locations on the site for weeks.

Analysts at the time suggested the social media company could lose billions of dollars in value from the shift away from Twitter’s iconic bird logo. However, some also acknowledged that the rebrand, a part of Musk’s push to turn X into the “everything app,” could eventually pay off. 

Musk feuds with hate speech, antisemitism watchdogs 

Musk’s changes to X also drew criticism from watchdog groups that monitor hate speech and antisemitism online, prompting public disputes and legal challenges.

X Corp., the parent company of the social media site, sued the Center for Countering Digital Hate (CCDH) in early August, alleging it had “embarked on a scare campaign to drive away advertisers from the X platform” and was responsible for the loss of “tens of millions of dollars” in ad revenue.

The lawsuit came after a CCDH report in June found that the platform had failed to act on 99 percent of hate speech posted by subscribers to Twitter Blue, the paid subscription service that has since been renamed to X Premium. 

Musk also publicly feuded with the Anti-Defamation League (ADL), an advocacy group focused on combating antisemitism that he alleged was “trying to kill” X.

“Since the acquisition, The @ADL has been trying to kill this platform by falsely accusing it & me of being anti-Semitic,” Musk said in a post in early September. 

He claimed that U.S. advertising revenue on the platform was down 60 percent, “primarily due to pressure on advertisers” by the group, and threatened to sue.

“To clear our platform’s name on the matter of anti-Semitism, it looks like we have no choice but to file a defamation lawsuit against the Anti-Defamation League … oh the irony!” Musk added.

However, Musk and the ADL appeared to signal a truce in early October, with the advocacy group saying they would resume their own ad spending on the platform. 

“We appreciate X’s stated intent over the last few weeks to address antisemitism and hate on the platform,” the ADL said in a statement at the time.

“This has been useful; more needs to be done; and, as we have with other companies, in the spirit of collaboration, we are hopeful that we can continue to engage with X on this important matter,” it added.

SEC sues Musk to force testimony on Twitter purchase

Musk has also become embroiled in a legal battle with the SEC in recent months after he failed to comply with a subpoena from the agency. 

The SEC has been investigating Musk’s initial purchase of Twitter stock and offer to acquire the company since April 2022. Musk was meant to sit for a deposition in September, but the agency sued the billionaire in October to compel his testimony after he refused to appear.

Musk responded by calling for a “comprehensive overhaul” of the SEC, arguing there needed to be “punitive action against those individuals who have abused their regulatory power for personal and political gain.”

However, a federal judge earlier this month appeared inclined to side with the SEC, warning that Musk would be forced to testify if he doesn’t agree to voluntarily answer questions.

X faces backlash over content moderation amid Israel-Hamas conflict

Following the Oct. 7 attack on Israel by the Palestinian militant group Hamas and Israel’s subsequent bombing campaign and ground invasion of Gaza, X has faced heavy scrutiny over what critics call a lack of sufficient content moderation.

While other social media platforms similarly struggled to contain violent content and misinformation online amid the ongoing conflict, experts suggested that the various changes Musk made to X over the past year have amplified the issue.

Old and unrelated photos and videos — and even video game footage — were misrepresented as current and genuine content from the conflict on X, and accounts posing as official news outlets spread false claims.

The European Union (EU), which previously warned X about its response to the conflict and began a preliminary investigation into the platform, announced earlier this month that it was opening “formal proceedings” into X to determine whether it violated the bloc’s new online regulations.

The formal proceedings, which are the first to be brought under the EU’s Digital Services Act, will focus on X’s “risk management, content moderation, dark patterns, advertising transparency and data access for researchers.” 

Musk allegations of antisemitism, outburst at advertisers spark exodus from X

Musk faced renewed allegations of antisemitism in November after he appeared to endorse a post promoting an antisemitic conspiracy theory.

After one X user claimed that Jews have been encouraging “dialectical hatred against whites” and referenced the “hordes of minorities that support flooding their country,” Musk suggested that the poster had said “the actual truth.

The original post echoes an antisemitic conspiracy theory often espoused by hate groups that accuses Jews of wanting to flood Western countries with nonwhite immigrants.

Musk’s problems multiplied in the days that followed as the media watchdog group Media Matters for America released reports saying it had found ads for mainstream brands placed next to pro-Nazi and white nationalist content on X.

The scandals prompted several major companies to halt their ad spending on the platform. Musk, in turn, sued Media Matters.

He appeared to attempt to do some damage control with a trip to Israel in late November, in which he met with Israeli Prime Minister Benjamin Netanyahu and toured a kibbutz that was attacked on Oct. 7. 

However, upon returning to the U.S., he lashed out at advertisers that halted spending on X.

“If someone is going to try and blackmail me with advertising, blackmail me with money, go f— yourself,” he said at The New York Times DealBook Summit. “Go f— yourself. Is that clear? Hope it is.”

It remains to be seen what impact Musk’s outburst had on the company. However, some experts warned that the billionaire’s comments could mark a turning point for advertisers, who may no longer see advertising on X as worth the risk.

X did not respond to the The Hill’s request for comment.

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