The White House is considering whether to subject some of Elon Musk’s business ventures to national security reviews, including his proposed acquisition of Twitter and his satellite internet company Starlink, a report says.
Bloomberg wrote on Friday that officials in the Biden administration are concerned about the Tesla boss’s plan to buy Twitter in a deal partially funded by non-US investors and his recent threat to plug Starlink’s service into Ukraine and the release of a series of tweets proposing the Ukraine conflict in favor of the Putin regime.
According to the report, US officials were concerned about Musk’s plans to buy Twitter with financial backing from non-US investors including: Saudi Arabian investor Prince Alwaleed bin Talal Al Saud; Qatar Holding, which is part of the Qatar Investment Authority; and Binance, the world’s largest cryptocurrency exchange whose holding company is registered in the Cayman Islands. At the time, Musk’s co-investors had about $7 billion in financial backing.
Musk is working to complete a proposed $44 billion acquisition of Twitter before an Oct. 28 court-imposed deadline, after which he will face legal action from the social media platform to force him to complete the deal .
Bloomberg wrote that one avenue available to the Biden administration to investigate Musk’s operations is through the Committee on Foreign Investment in the United State (CFIUS), which can review deals and recommend that the president suspend or approve a transaction To block.
In response, Elon Musk tagged a tweet on Friday citing the Bloomberg report and saying it would be “hysterical if the government stopped Elon from overpaying for Twitter.” Musk responded with a laughing emoji and the 100 emoji, indicating his support for the post.
It would be hysterical if the government stopped Elon from overpaying for Twitter 😂
— Nik “The Carny” Lentz (@NikLentz) October 21, 2022
It’s not clear on what basis Starlink, part of Musk’s Space X rocket business, is to be scrutinized by the committee.
On Saturday, Elon Musk announced that SpaceX would continue to pay for Starlink’s internet service in Ukraine, a day after he indicated he could no longer fund the project because he said it was losing about $20 million a month. Operating through a constellation of 3,000 small satellites in low Earth orbit, Starlink has become a vital communications link for the Ukrainian army in its fight against the Russian invasion. According to Musk, there are now about 25,000 Starlink ground terminals in Ukraine.
Musk alarmed the government in Kyiv this month when he released a Twitter poll on the country’s future, with options including formalizing Russia’s annexation of Crimea. In response, President of Ukraine Volodymyr Zelenskiy tweeted, “Which @elonmusk do you like more?” and offered two answers: the Musk supporting Ukraine, or the Musk supporting Russia.
The U.S. Treasury Department said: “CFIUS is committed to taking all necessary actions within its authority to ensure U.S. national security. In accordance with law and practice, CFIUS does not publicly comment on transactions, which it may or may not review.”
Join Business today
Get ready for the workday – we’ll snap you up every morning with all the business news and analysis you need
Data protection: Newsletters may contain information about charities, online advertisements and content sponsored by third parties. You can find more information in our data protection declaration. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.
Howard Fischer, a partner at New York law firm Moses & Singer, said he doesn’t expect a CFIUS investigation to get in the way of the Twitter deal.
“I am skeptical that the CFIUS review will be used to halt or significantly disrupt the deal,” he said. “Musk would argue that he is being penalized for his speech, not for the presence of foreign investors in the deal, particularly given the relatively small size of this reported foreign investment.”
Elon Musk has been contacted for comment.