Even the world’s richest man has bad days

Elon Musk’s surprise bid for the nonprofit controlling artificial intelligence behemoth OpenAI did exactly what he wanted it to. Announced as OpenAI CEO Sam Altman and other business and world leaders convened in Paris for a global AI summit, the unsolicited $97.4 billion offer for the nonprofit refocused the world’s attention on Musk and his efforts to block OpenAI’s transition to a for-profit company.

An irked Altman quickly dismissed Musk’s offer and sources close to OpenAI say it’s hard to imagine it going anywhere. But even if that’s the case, Musk has likely caused a headache for Altman, who is orchestrating the company’s transition to a for-profit venture. He’s attempted to forcefully raise the nonprofit price – which would make it harder for OpenAI to justify paying anything less.

Fellas, is it illegal for brands to refuse to advertise on my social media site? If you’re Elon Musk, the answer is yes.

This week, Musk’s social media company X (formerly Twitter) filed an eyebrow-raising lawsuit against an advertising industry group and several major brands, including Unilever (maker of Dove soap), Mars Inc. (maker of lots of candy), and CVS. It argues that the companies coordinated an advertising boycott against X that not only led to “massive economic harm,” but even violated antitrust law because they colluded to specifically target X, making it less competitive in selling digital ads.

Since having to buy the site for a painful $44 billion in 2022, Musk has tried to turn it into a haven of unmoderated speech. Critics have argued that the site, often called a “hellsite” for how toxic it could be even before the Musk era, became an unusable cesspit of vitriol and incoherent porn bots. Advertisers fled, because businesses don’t want to risk their ads showing up next to objectionable or outright illegal content, like child sexual abuse material. This is very bad for X, since, like other social media companies, it would go belly up without ad money. X contends this cessation of business is a “naked restraint of trade” because advertisers collectively forced the site to adhere to their content standards. It even had to lower its ad prices, the filing alleges.

The lawsuit places the bulk of the blame on the Global Alliance for Responsible Media (GARM), an initiative launched in 2019 to establish a standard for brand safety across ad platforms. GARM’s membership, which was listed on the site as of August 6, includes consumer brands, ad agencies, and media companies where ads are served (such as Spotify and, up until recently, X), asking them to commit to a shared understanding of what counts as harmful or risky content that shouldn’t be monetized by ads. Membership is voluntary, and GARM says that individual advertisers ultimately decide how and where they advertise. It did not reply to a request for comment. Just days after the lawsuit was filed, Stephan Loerke, CEO of the World Federation of Advertisers — the larger ad industry association that GARM is part of — told members that GARM would be shutting down, according to an email obtained by Business Insider. The group denies any wrongdoing, but noted that it had limited financial resources as a nonprofit. Loerke made clear, however, his confidence that GARM would be vindicated in court.

None of this has stopped X from portraying its plummeting ad revenue as a matter of criminal injustice. X says in the lawsuit that at least 18 GARM members pulled all ads from X in late 2022, while many more reduced their spending significantly. In a video posted on X, CEO Linda Yaccarino made a grave appeal to X users, arguing that advertisers, not X’s chaotic management, have threatened the financial future of an important platform. “That puts your global town square — the one place that you can express yourself freely and openly — at long-term risk,” she said, echoing the refrain that X is a champion of uncensored free expression despite the fact that it moderates content, even if some say its policies are unclear.