US President Joe Biden admitted on Wednesday that an investigation into Elon Musk’s financial and commercial ties to China or Saudi Arabia could prove useful. The challenge? Determine if Twitter’s new owner poses a threat to US national security.
It’s $1.89 billion that makes even Joe Biden uncomfortable. The American president estimated, Wednesday, November 9, that this large sum that was put into the pot of Saudi Arabia to help Elon Musk acquire Twitter is likely to justify “that we are interested in cooperation and commercial relations. [du patron de Tesla] with other countries”.
The goal? Establishing whether the new owner of Twitter is a person under foreign influence and may, as such, represent a “threat to American national security”, as suggested by an American journalist who asked the tenant of White House.
Elon Musk, the friend of China and Saudi Arabia?
This journalist is not the only one. Democratic Senator Chris Murphy also called on October 30 for an investigation into whether Elon Musk’s business and financial connections would allow countries like “Saudi Arabia to have influence on an important political communication platform like Twitter”.
So far, Elon Musk’s relationship with foreign powers seems to be limited to China. The importance of the Chinese market for Tesla’s electric cars prompted some media, in June 2022, to highlight the risk that Beijing could use this lever to persuade the American businessman to make it more compatible on Who’s Twitter.
Elon Musk has shown in the past a desire to please Beijing’s masters. In March 2022, he opened a Tesla branch in Xinjiang, despite Western criticism of the repressive policy carried out in this region against the Uyghurs minority.
A few months later, in August, he signed a column exposing his vision of future innovations in the official magazine of the Chinese administration of internal regulation – China’s chief web censor.
But that was just the beginning. The publication in October of the list of investors who helped Elon Musk raise $46.5 billion to buy Twitter suggested that other authoritarian countries may have offered themselves the right to influence the future of the popular social network .
In fact, there was $1.89 billion from the Saudi investment fund, but Qatar Holding also participated in the acquisition of $375 million while Binance, the Chinese-Canadian cryptocurrency giant, advanced $500 million to complete the acquisition.
“Qatar Holding and the Saudi fund both have direct ties to the government of their respective countries,” said the Brookings Institute, in an analysis of the implications for American national security of the acquisition of Twitter. “These are not states that defend the same concept of freedom of expression as in the West on platforms like Twitter”, underlined Hamza Mudassir, co-founder of the British consulting firm for start-ups Platypodes. eu and professor of strategy. entrepreneurship at the University of Cambridge.
There is no evidence of a threat to national security
Saudi Arabia, in particular, has shown that it has a very specific concept of Twitter’s role. In 2017, the Wahhabi kingdom launched a small army of “bots” to attack the popular social network to carry out a wide-ranging influence operation. A former Saudi employee of Twitter was also convicted in August 2022 of spying on the social network on behalf of Riyadh to obtain data on Saudi dissidents active on the platform.
As such, Elon Musk has brought potentially troubled investors to a company, which has repeatedly been described as important for democratic debate. It contains important personal information (e-mail address, phone number, private message history) on all users of the site, “sensitive data that may be of interest to authoritarian states”, underlined Democratic Senator Chris Murphy.
There are too many disturbing elements that do not however show that Elon Musk “did something inappropriate”, insisted to qualify Joe Biden. to America’s national security, but the financial arrangement for the acquisition is complex enough to require a closer look”, Hamza Mudassir summarized.
Big financial operations like taking over a company the size of Twitter “often require calling a lot of investors”, says this expert. And those related to China, Saudi Arabia or Qatar ultimately represent only 6% of the total cost of the operation.
Safeguards to protect national security?
It is not much but it is enough to weigh the functioning of Twitter, “especially since we do not know exactly what these investors are getting in exchange for their contribution”, underlines Hamza Mudassir. Did the Qataris or the Saudis offer themselves seats on the board of directors or just the right to receive dividends from future profits?
This is one of the points that a possible investigation should clarify. In the United States, they are conducted by the Committee on Foreign Investment in the United States (CFIUS) which can review foreign investments in American companies to determine whether national security is at stake.
The mere fact that a company has personal data on a portion of American citizens – as is the case with Twitter – “may be enough for CFIUS to open an investigation”, says the Brookings Institute.
This federal agency has very broad powers, such as banning foreign acquisitions or investments (even retroactively). But before reaching such a decision, this Committee may decide on measures aimed at limiting the risk.
According to Hamza Mudassir, this prospect is likely if CFIUS considers, after the investigation, that the acquisition of Elon Musk undermines national security. One solution is “to improve state oversight of what’s going on inside Twitter,” he said. CFIUS can require that all personal data be stored on servers located in the United States and they can only leave after obtaining permission from the administration.
Such a solution may be more necessary since Elon Musk took Twitter from the Stock Exchange… A departure that has the effect of making its operation less transparent since the group is no longer obliged to report to the shareholder. An opacity that is not necessarily reassuring for a site that is supposed to promote freedom of expression among Saudi, Qatari or Chinese investors.