The Real Reason Elon Musk Is Buying Twitter!

Alright, is Elon Musk buying Twitter or not? What’s the deal here? In all of the weird Elon Musk sagas that we have followed over the past two years, this Twitter situation is proving to be by far the weirdest.

So, after a month of talk that he would purchase Twitter.com and insert himself as the new CEO and completely retool the product into a free speech industrial complex with open source algorithms, user verifications and airtight information security… Elon Musk decided that he wasn’t going to purchase Twitter, actually. Or was he? I don’t know! The story is literally developing as we’re trying to make this video and it’s very stressful.

So, Friday morning Elon tweets, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” And then two hours later he follows that up by Tweeting, “Still committed to acquisition.”

And just for a bit of context for Elon’s headspace at this time - prior to his Twitter bombshell, Elon was pontificating on the state of plastic straws, writing, “Stop the war on straws!” and adding, “The straw war is emblematic of larger social issues.” So… the man was in a philosophical mood.

Anyway, let’s talk about why Elon Musk is so obsessed with Twitter - and if we assume that he actually is going to go ahead and buy this thing - what is Elon going to do with it? There has to be more to this than meets the eye. We have to make this make sense. So let’s go.

The Art of the Deal

Alright, we don’t get too heavy into financial dealings on this channel, so we’re going to try and explain everything in a very simple, straightforward language.

The deal, as it stands, if it stands, is that Elon Musk will buy out Twitter and take it private for the equivalent of 54 dollars and 20 cents per share - that adds up to about $44 billion in total. At the time Elon wrote up his proposal Twitter shares were worth about $45 USD, as of right now on May 12 Twitter shares just sunk like a stone at market open to $40. The all time highest value that Twitter stocks had ever traded was about $77 per share in late February 2021, which was basically the top of the pandemic bull market.

So Elon is paying a bit more than Twitter is currently worth, but not nearly as much as it could potentially be worth. It’s a pretty good deal for both sides  - Twitter stakeholders get a reasonably good price for their shares, especially in the current bear market, and Elon gets full control of a company that should still have a lot of potential to grow and make money.

Now, it’s also important to remember that just because Elon Musk has a net worth of $300 billion, give or take, doesn’t mean he has $44 billion just sitting in his bank account, or hidden inside the walls of his house. In order to pull this off, Elon had to sell 8.5 billion dollars worth of shares in Tesla to get the cash. He also received a commitment from Morgan Stanley and other financial institutions for 6.25 billion in margin loans secured against his Tesla stock. In addition, Elon has lined up around $8 billion in equity from a group of new co-investors. So, that still doesn’t add up to 44, but close enough, I guess, to keep the ball rolling.

The Free Speech Absolutist

But why is Elon Musk doing all of this? For one, the man has more than enough on his plate as it is without throwing a whole new company into his juggling act. And for two, Elon used to say that he would only ever sell Tesla stock to fund his Mars colony - then he sold a bunch of Tesla shares apparently just for the sake of paying taxes, and now he’s selling another bunch to fund his purchase of a website. It’s not doing anything good for investor confidence in his flagship company, that’s for sure. 

According to Elon, he’s doing it all for free speech. Elon calls himself a free speech absolutist - which he’s kind of loosely defined as supporting freedom of expression as it’s written in United States law. Elon disagrees with Twitter making seemingly arbitrary decisions about what is and is not allowed to be said on their platform based on the personal opinions of Twitter staff and management. In Elon’s vision of a free twitter, the only limitations on what users can or can’t say will be defined by the federal law. 

Elon says that if people don’t like it, they can just change the law. Which is… not nearly as easy to do as he makes it out to be. Take cannabis for example - 18 US states have voted to legalize the use of cannabis and another 13 have voted to decriminalize its use, that’s the vast majority of US states saying OK to cannabis. And yet, in the eyes of the federal agencies, you are still a criminal if you possess cannabis. So, clearly the majority opinion does not affect US law at the federal level.

Anyway, the other sticking point with Twitter that Elon identified was the prevalence of bots and fake accounts. This is seemingly the issue that has just thrown a wrench into the whole acquisition process - when Elon tweeted that the deal was on hold, he linked to a Reuters article from May 2nd that reported Twitter’s official estimate on the number of false or spam accounts on the platform, which the company pegs at fewer than 5 percent of its monetizable daily active users during the first quarter of 2022.

Anyone who’s spent time on Twitter knows that there is no shortage of fake accounts out there that are just trying to scam people, usually with some kind of crypto currency based plot. Nor is there a shortage of bot accounts and fake users that clearly don’t have a genuine human being behind them and are just broadcasting inflammatory shit for no reason other than to make people even more upset and divided than they already were - and that’s obviously not good for anyone aside from Vladimir Putin and other nefarious actors who want to see Western democracy destabilize and crumble.

I think this why Elon sees his takeover of twitter as an effort to save democracy - if he can eliminate the noise from all of these bots and scams and illegitimate accounts, then that should in turn boost the signal - which is the genuine thoughts and feelings of the people of the world, the digital town square that so many people imagine Twitter to be. But it’s impossible to have a functioning town square if it’s also full of robots that are just constantly yelling crazy shit and selling snake oil.

So, obviously Twitter is not accurately counting the number of these fake users, and that’s given Elon Musk pause about whether or not he can make this happen - you can’t fix a problem if you can’t identify it first. So before he goes any further, Elon wants to see the real numbers behind Twitter’s infestation of bots and scammers.

That begs the question of what Twitter might be under this new model. If you take away the bots and agitators, would everyone suddenly be nicer to each other? If you take away content moderation, would people actually become more cruel? I don’t know, but it would be a fascinating social experiment.

Twitter’s Place in the Musk Verse

So, maybe Elon Musk is, in his mind, buying Twitter to save the world and rescue democracy. That’s entirely possible, he does have a very strong interest in the fate of humanity, that’s his driving force for going to Mars and extending human civilization to multiple planets.

But we also can’t deny that Elon is a businessman, one of the best corporate entrepreneurs in the entire history of the world, either that or just one of the luckiest human beings to have ever existed. So, it would be naïve to think that there isn’t a genuine business move at play here. But what is it? 

The hottest take out there right now is that Elon wants Twitter for the data - Twitter dot com contains within it the thoughts, feelings, opinions, fears and angers of hundreds of millions of people - and Elon Musk is going to feed all of it into an artificial intelligence neural network.

So, it makes sense that real work AI, like Full Self Driving, needs real world data to train the neural net. If you want the car to behave like a human driver, then it needs to learn from a human driver - these are the FSD Beta testers, the data from their cars, and every other active Tesla on the road, is fed into a giant supercomputer that trains the the Robot brain how to drive. Elon tweeted just the other day, “Without billions of miles of training data, solving self-driving is impossible.”

But we know that Tesla isn’t stopping with robot cars, they’re actively working on a robotic humanoid, the Tesla Bot. And we know that Elon considers this robot to be a top priority for the company - pushing to have a working prototype this year, and follow that with limited production a year after that. And Elon looks at the Tesla Bot in the same way he views colonizing Mars or fixing Twitter - a way to literally save humanity. 

In a recent interview with the Financial Times, Elon mentioned the possibility of Earth’s economy growing 10 times larger. Following that interview, Solving the Money Problem tweeted that the 10 X economy could be thanks to the Tesla Bot - Elon replied by saying, “Literally true. Even 100x is possible.”

Now, in order for the Tesla Bot to work, it needs to essentially become a direct substitute for human labor - at least one to one in terms of value to the economy, in theory a robot worker should actually be more valuable than a person because it will never get tired or sick or need to stop for a lunch break. But in order for these robots to become effective human analogues, they need to be trained to interact with humans and understand what we are telling them to do - in the same way that the self driving cars need to be trained to interact with traffic and road conditions - and that means data, lots and lots of data.

Which brings us back to our digital town square, this infinite well of humanity that is Twitter dot com. People have used Twitter to train AI in the past, Microsoft created their own Twitter bot named Tay as a kind of experiment in ‘conversational understanding’ - the idea was that the more people chatted with Tay on Twitter, the smarter it became - basic neural net training. Except that didn’t work at all, because the experiment was too narrow, and people knew what was going on, so a certain group of users started bombarding the Tay bot with a bunch of racist, Nazi shit and totally overwhelmed any other input to the training algorithm. So, it only took less than 24 hours for Tay to start talking like a 4Chan troll and tweeting a bunch of horrible things that I can’t repeat in this video, I don’t know if we can even show it on the screen.

So, here’s the idea - the first thing Elon Musk does is eliminate the noise from Twitter - the bots, the scams, the fake accounts and boil it down to just real people expressing their real thoughts. And then you remove content moderation to allow those thoughts to flow freely as long as they don’t violate any federal law. For better or worse, you end up with pure, distilled humanity. 

Could that make society better? Maybe. At this point it seems hard to make it much worse, so it’s probably worth a shot, at least.

And at the same time, all of that free flowing collective consciousness is fed straight into an artificial intelligence that is learning how to function in a human society as an artificial version of a human being. For a Tesla Bot to be truly useful it needs to be able to understand and interpret what people are saying and turn that into an action in a near infinite variety of scenarios - and at the same time it needs to know the difference between right and wrong, between safe and dangerous… the sheer depth of language comprehension and conversational understanding and situational awareness that these robots are going to require is just staggering when you really think about it. Imagine if a Tesla Bot was only as smart as an Amazon Alexa? It would be useless. Tesla’s AI needs to have a hundred times better comprehension - a thousand times better comprehension - just to make these robots functional.

And that means Elon Musk needs data. Where does he get that data? Twitter. How much is he willing to pay for it? Apparently $44 billion. That’s too much money just to fix a website, even for the richest person alive. There’s got to be more going on here.