Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Let me tell you
we have a new star.
Speaker 2 (00:10):
A star is born Juson Kennedy. He is the Thomas
Edison plus plus plus of our age.
Speaker 1 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guy.
Speaker 2 (00:22):
I would say ninety eight percent really appreciate what he desk.
But those two percent that are nasty, they are our
pay in four.
Speaker 1 (00:29):
Post we were meant for great things in the United
States of America, and Elon reminds us of that. I'm
very disappointed in Eilan, and I've helped Elan a lot.
Speaker 2 (00:44):
Welcome to Elon, Inc.
Speaker 3 (00:46):
I'm Max Chafkin and coming to you with a very
special emergency podcast today on Wednesday, July ninth. It's about
one o'clock and just a couple of hours ago, we
learned some shocking news. Linda Yakarino, friend of the show
and longtime CEO of X Company formerly known as Twitter,
is out. She has left the company. And we wanted
(01:08):
to talk about that because it's coming at a time
of just incredible chaos within Elon Musk's empire with all
that's going on, and I've got Sarah Fryar, Bloomberg's big
tech boss.
Speaker 2 (01:19):
On the other line, Sarah, how are.
Speaker 1 (01:20):
You doing well? Another big news day here?
Speaker 2 (01:24):
You know what, it never stops.
Speaker 3 (01:25):
And this morning I got a call from the Bloomberg
TV producers. This is how I learned about this who
wanted to talk about They also sent me this tweet
that Linda posted at ten forty am. I'm just gonna
read a little little bit from it. After two incredible years,
I've decided to step down as CEO of X. When
Elon Musk and I first spoke of his vision for X,
(01:46):
I knew and it goes on and on. She's praising,
actually talking about how it's the everything app. It feels
like a pretty amiable breakup. Sarah, let's just start. What
do you make of this? What do you think caused
Linda to step down? Do we think she was pushed out?
Do we think something else is going on?
Speaker 1 (02:04):
Well, I mean, if you look at the at the
situation she's in right now when she took this job,
I wrote at the time, she's not really the boss,
like she's the CEO, but Elon Musk holds the strings
about how this company acts, and her job is to
bring advertisers back to the platform. She has this great
background at NBC Universal, these really tight relationships with advertisers,
(02:28):
and if x was committed to returning advertisers to the platform,
she would be the person to do it. But then
she's dealing with with her boss, you know, posting all
these things that make advertisers concerned about whether their content
is going to show up next to anything that he
says that's a erradic or controversial, And so she's in
(02:49):
this tough spot. And besides not actually being fully in
charge as CEO, although she does run the day to
day because Musk, you know, he got busy this year.
It's busy in general. She does run the thing, but
then you know, earlier this year, there's this transaction whereby
X gets acquired combined with Xai, turns into this company
(03:13):
called Xai Holdings, And her future is a little unclear
in that she's not even like, you know, in charge
of that.
Speaker 3 (03:21):
New group CEO of one of two companies that are merged,
clearly the more junior of the two companies. You would
so almost sort of expect that that person in a
normal company, which of course none of el On Musk
companies are. You'd almost expect that person might be headed
for the exit.
Speaker 1 (03:35):
At that point, and you might imagine that she got
some sort of financial benefit from that deal. You know,
there was some concern for the debt holders for X
that they wouldn't see or a return on that debt
or be able to offload it. That transaction was a
way to help out those those X investors as the
(03:57):
company is really struggling. I mean, this social network has
not been able to bring advertisers back effectively. They're doing
a little bit better this year, and then there continues
to be just tons of crazy things that happen every day,
including yesterday.
Speaker 2 (04:13):
Yeah to that point.
Speaker 3 (04:14):
Yesterday, as we're recording this on Wednesday, there was news
and I guess this really started on Monday, but Groc,
Sarah Grock went Nazi again. There were there were like dozens,
maybe more hundreds, I don't know, posts where Groc was
like talking about how great Hitler was and using these
like kind of white nationalist memes. It kind of harkened
(04:35):
back to an earliest incident that we talked about on
this podcast, when Groc started talking about white genocide quote
unquote in South Africa. If your job is advertising, right, Like,
there's one thing I know that advertisers are not crazy about,
and it's like Nazism. That's definitely one of one of
the bright lines that they draw. So you could just
(04:55):
imagine that that would have that I mean, maybe that
could have crossed.
Speaker 1 (04:58):
The line or is not happy today? There are a
lot of countries in Europe that are you know, even
talking about fines or bands for for X. Yeah, it's
really crazy too that as that was happening with gro Grock.
By the way, is the chatbot that xai makes, right
And by the way, you can use x to post
(05:19):
at the chatbot and the chapbot might reply to you.
So that's how all these people were seeing in public
in real time, the chatpot responding. And it's really a
testament to how much chaos there's been on X that
a lot of us didn't realize whether this was intentional
or unintentional. Right, And after this bubble to the service
(05:41):
and became the subject of news stories about the anti
symitic content, X did take action and work to remove
the post, but there was really a question for a
while like is this is this something that they intended,
you know, for the chatbot to just go all white nationalists.
Speaker 3 (05:59):
It was.
Speaker 1 (06:00):
It was really crazy to see. And the chatbots said,
and we don't know, because the chatbot is an AI,
is not a human, but the chatbots said that it
was updated manually last week by Elon to have to
have a little bit more of a based attitude.
Speaker 2 (06:17):
Which I don't know if we should credit that. I
think I believe.
Speaker 3 (06:20):
Also, the chatbot at one point over in recent days
was responding as Elon. I mean, again, these these chatbots
are prone to hallucinations and so on, so take that
with a grain of salt.
Speaker 2 (06:29):
Sarah, I'm shame of salt. Yeah, we will do this
in a more.
Speaker 3 (06:34):
Full way, I think at some point on this podcast,
especially once we get Kurt Wagner on the show. Kurt,
of course wrote a book all about Elon musk takeover
of Twitter. But but just quickly, I just want to
talk about, like why we were so fascinated by Linda,
because of course there are other CEOs in Elon Musk's orbit,
and I'm trying to think about why she was sort
(06:54):
of this kind of funny, interesting, really impressive but also
kind of comic figure in the orbit.
Speaker 2 (07:00):
And I think it's because she.
Speaker 3 (07:02):
Was in the most extreme position where on one hand
there is the craziness of Elon and all the edge
lord stuff and his weird associations and the racism, and
on the other side are like the most square people
in the world, advertisers, and Linda is the buffer because
and there would be these amazing moments Sarah, which I'm
sure you remember, where Elon would be doing something crazy,
(07:24):
Linda would go on Twitter and be like yay NFL
or whatever, just like something that just felt so far
removed from what where the actual zeitgeist was, and it
was like just amazing to watch.
Speaker 1 (07:37):
Yeah, I mean it would be like something insane, the
world was exploding, and Linda would be like, I love
shoes like js as jets. You know, She'll just do
like like enthusiastic posts that are brand safe. Almost has
like the most extreme caricature of like a counterbalance to
(07:58):
Musque himself, Like she's just really is like, go team,
We're changing the world. We're all about free speech. And
in fact, when there was that first scuffle where Musk,
remember he endorsed that anti semitic post in twenty twenty three,
(08:19):
and then at that conference he told marketers who are
boycotting X to go f themselves. Of course, then Yakarino
tells staff that, you know, she's all about the free
speech mission and the principles do not have a price tag,
nor will they be compromised ever. You know, she just
really is all in, even when Musk goes to the extreme.
(08:42):
So I just want to note, you know, we said
we talked about the craziness of rock we had. We
do know that Linda Yakarina was considering her exit since
before got it yesterday's events from a source familiar, so
got it. It's it's not necessarily tied, but it does
make the timing seem more like space saving.
Speaker 3 (09:06):
Do we have any sense of how long she's been
considering her exit for a while.
Speaker 1 (09:12):
Our source says her decision to resign was in the
works well before.
Speaker 2 (09:16):
The Oka Rock. I guess we could take that a
lot of different ways.
Speaker 1 (09:19):
So another thing, another thing to think about is, you know,
we talked about her really strong relationships with advertisers. She
was just at cam Lyons in in the south of France.
That's the really big advertising conference. You heard Kurt Wagner
talk about that Elon Inc. Recently where you know, everyone
comes together, Toutsler products, meets has Rose on yachts all
(09:43):
that she was there, but she wasn't really much of
a public presence. She was doing a lot of like
private meetings, and you can imagine in these private meetings
her her buddies might be telling her, Hey, look like
Muska isn't even tight with Trump anymore, Like what are
you still doing?
Speaker 2 (10:04):
Yeah?
Speaker 3 (10:04):
I mean, for me, like what Linda was trying to do.
And I use the word impressive, not you know, seriously,
because I think, especially early in her tenure, she really
did help navigate the company from chaos to something that
actually started to feel like it hung together as a vision,
you know, it was it started to feel like, Okay,
this is like gonna be a real conservative media platform. Linda,
(10:28):
of course, had some connections to Trump World before coming
into into X.
Speaker 2 (10:34):
I believe she was on some kind of fitness panel
or whatever.
Speaker 3 (10:36):
But in any case, like she strikes me as a sort
of mainstream conservative, not you know, maybe a Fox News conservative,
not necessarily a burn.
Speaker 2 (10:45):
It all down America Party conservative.
Speaker 3 (10:47):
For those who have listened to yesterday's podcast, when Nancy
Cook Sarah, before we wrap, I just want to talk
to you quickly about kind of what this means for
the future, because while this is going on, I believe
tonight it's Wednesday as we're recording this. Later today Elon
is going to unveil Rock four, this new version of
(11:08):
his large language model, the large language model that XAI made.
It is assumingly trained on data from x What really
feels like here is a pivot away from advertising altogether
and towards AI. And I'm wondering whether number one, you
buy that and number two do they have can that
(11:28):
succeed even though you know, despite all of the issues
that we talked about the fact that groc still has
a tendency to spout offensive stuff from time to time.
Speaker 1 (11:39):
Well, I you got to look at the financial picture.
Advertising is a small business, but it's a real source
of revenue for a company that is that we've reported
is burning through a billion dollars a month.
Speaker 3 (11:53):
Yeah, yeah, And I believe our reports said they were
taking they plan to take in five hundred million in revenue.
Speaker 2 (11:58):
I assume that's.
Speaker 3 (11:59):
AI rev Meanwhile Twitter, I mean, our understanding is this
is a couple of billion dollar business, even in its
very diminished form, Like the advertising business is still way
bigger than the chat pop business.
Speaker 1 (12:10):
Oh, it's way bigger, but the chat pop business is
going to drain through that in weeks, right, Like this
the the cost of a build out of data centers.
They're burning through a billion a month and they're planning
to raise nine point three billion in debt in equity.
The financial picture is getting extremely complicated for this company.
(12:30):
And if you're Elon Musk, you see the world as
full of endless money because you can just get it
from maybe even from one of your other companies.
Speaker 3 (12:39):
Right right, right, Yeah, well that's and that's potentially where
some of that revenue's coming from, for sure.
Speaker 1 (12:46):
So I think it's a it's just a complicated time
if you're not trying to bring the ex business back
to health through advertising, like now it's part of this
XAI thing, which is like a much more complicated financial
pick maybe maybe better upside right, because it's an AI business,
(13:07):
but it is one that is bleeding money, like all
of these AI companies are.
Speaker 3 (13:14):
All right, Well, we'll have more to say about this
in future episodes, Sarah, I feel like at some point
we need to sit down and do like a retrospective,
Like I'm craving a montage of like the greatest Yacharino tweets,
the greatest sound bites, like there were so many great moments,
and then we'll have to talk about the guy that
many people think is going to run x this the
(13:36):
new the newly highed product manager or product or head
of product or something on Nikita Beer.
Speaker 2 (13:41):
So lots of discuss, but we'll have to save that
for next week.
Speaker 1 (13:44):
I just want to ask you a question, Yeah, Max,
what do you think he does next?
Speaker 3 (13:49):
I mean, I feel like, was it you or or
our producer Magnus who suggested just before we got on
that maybe she's getting a job inside the Trump administration,
right that that could be or or do you think
think that the or do you think that the bridges
have been too far burned? Like maybe maybe her association
with Musk, even even with the exit, means that like
(14:10):
she's gonna be frozen out of that world forever.
Speaker 1 (14:12):
I think she could easily find a role in the
conservative political world.
Speaker 2 (14:17):
Yeah, one hundred percent.
Speaker 3 (14:18):
That new those new media, that conservative new media space
is booming. And she really did, I mean to her credit,
like she did hit that a little bit like that
Tucker carl Like Tucker Carlson got tossed from Fox News,
and like you know, obviously he's very controversial and everything,
but like he gets a lot of viewers, and some
of that had to do with the ex partnership.
Speaker 1 (14:36):
So we'll see. I mean, I'm just kind of curious
if she keeps posting through it, like if she even
continues to be just this bubbly personality on X.
Speaker 2 (14:49):
It's where it happens, Sarah, It's where it happens, and.
Speaker 3 (14:52):
Let's Sarah Fryar.
Speaker 2 (14:55):
Thanks for being here, see you soon.
Speaker 1 (14:57):
Thank you Max.
Speaker 3 (15:01):
This episode was produced, created, conceived, dreamed up, and tweeted
by Magnus Hendrickson, our supervising producer, Big thanks to Sarah Fryar.
Sage Bauman is ahead of Bloomberg Podcast and we will
see you next week unless something big happens, in which
case we'll be right here in your feed.