Elon Musk’s Twitter bot claims are being investigated by Texas government

·2 min read
CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing
CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing

The Texas Attorney General has announced that he is investigating how Twitter could be “misleading Texans” about the number of bots on its platform.

“Texans rely on Twitter’s public statements that nearly all its users are real people. It matters not only for regular Twitter users, but also Texas businesses and advertisers who use Twitter for their livelihoods,” said Attorney General Bill Paxton.

“If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans.”

In the announcement of the investigation, the Texas Attorney General said that Twitter had “received intense scrutiny in recent weeks over claiming in its financial regulatory filings that fewer than 5 per cent of all users are bots, when they may in fact comprise as much as 20 per cent or more.”

This criticism comes most notably from Tesla chief executive Elon Musk, who made a bid to buy the social media company for $44 billion in April.

Tesla relocated its corporate headquarters to Gigafactory Texas in December 2021, and has opened a Tesla factory outside of Austin this year. Mr Musk personally lives in Texas, and SpaceX runs a major manufacturing and launch facility there.

In the months following, however, Mr Musk has claimed that  his proposed takeover of the social media platform was “on hold” after he suggested that he did not believe Twitter’s own estimate that less than five per cent of the active accounts on its platform were automated or spam accounts.

Twitter chief executive Parag Agrawal published a long thread explaining how the social media company calculates the number of bots on its platform. In response, Mr Musk tweeted the poop emoji to Mr Agrawal.

Mr Musk waived due diligence when he agreed to buy Twitter at $54.20 per share. Twitter’s board has previously said that it “intend[s] to close the transaction and enforce the merger agreement.”

In the demands made to Twitter, Mr Paxton is asking for Twitter to send “all public statements you have made quantifying the number of Twitter users”, and “documents that contradict Your public statements that fewer than 5% of ‘false or spam accounts’ are included in Your ‘monetizable daily active users’ metric”.

Marc Fagel, a securities law expert who previously served as regional director of the Security and Exchange Commission’s San Francisco office, told CNBC that this investigation is unusual because such matters are not typically handled at the state level.

“States aren’t necessarily equipped to do this sort of sophisticated investigation,” Mr Fagel said. “It’s one thing if you’re dealing with a local company, but if you’re talking about a national, publicly traded company in another state, that’s the province of the SEC.”

Twitter declined to comment.