Elon Musk’s secret PR machine at X

Last Saturday, someone in X’s “business operations” department sent out an email to journalists at Bloomberg, The Verge, Fortune and more to spread the good news: X has partnered with Paris Hilton as a way to promote the platform’s live shopping feature. 

What X sent out is called a “press embargo” which is a well-worn tradition in the realms of journalism and public relations. It’s an agreement typically between PR and a journalist to release news at a predetermined time (X’s embargo time was Oct. 2, at 11:30 a.m. ET). Embargoes can be for a range of announcements, from product launches to government findings, scientific breakthroughs, and financial results. 

But wait, X, the company owned by Elon Musk, is working with the mainstream media? The same Elon Musk who has repeatedly disparaged the media, telling his fans that he “almost never reads legacy news anymore,” that “citizen journalism,” not the “media elite,” is the future, and literally flinging digital poop at journalists?

Well, X seems to have figured out a clever way to reconcile these two things. You see, the company isn’t calling what it does media communications or press relations—that would mean admitting that X actually craves and goes out of its way to seek coverage of product announcements and other “positive stories” in the mainstream media. Instead, X is calling this kind of work “business operations.” Joe Benarroch, a former director of communications for Facebook’s small business and international advertising business who then did a stint as SVP of communications at NBC, is spearheading X’s don’t-call-it-PR effort.

You won’t find an archive of press releases on X’s website, but Benarroch appears to be busily doing flak-work (as it’s called in the business) behind-the-scenes, emailing reporters embargoed news announcements.

Musk’s disdain or distaste for traditional communications departments is well known. “We need a VP of Propaganda … errr I mean Public Relations!” Musk tweeted, referring to Twitter, in April. He dissolved Tesla’s entire PR department in 2020, and one of his first orders of business after buying Twitter last November was axing its PR department too. At that time, if I needed to get a comment or check a fact for a story, I’d have to send an email to Twitter’s general press email, only to receive a poop emoji in return. That changed when Linda Yaccarino joined as CEO in June, but only slightly. Now the automated response is somewhat more polite: “We’ll get back to you soon.” They will not, in fact, get back to you soon.

While part of PR people’s job is to make mine harder, they are nonetheless considered an integral part of any modern company. They serve as the guardians of brand reputation, as Axios put it, and there are few companies that need their brand’s vulnerabilities protected like X.

Also, Musk really hates the media. He has done quite a bit of work to prove it, too. He ran NPR off the platform after briefly labeling them “state-affiliated media,” he regularly badgers the New York Times as being “woke,” and a quick search of his tweets for the word “media” will provide anyone with enough information about his opinion. Yet, interestingly enough, business operations under Yaccarino relied on the same media Musk disdains to get the word out about a big celebrity partnership.

When it comes to how X functions today, it seems that the right-hand does not talk to the left. Musk runs the product side and Yaccarino, who was considered the most powerful person in the advertising business until June, seems to do everything Musk wants to avoid. Yaccarino has handled some public appearances, wooing advertisers (who bring the revenue X so dearly needs), and other minutiae that seem to make Musk’s skin crawl. That’s typical for his companies, and he’s loud about hating the CEO gig.

So it’s not necessarily surprising that Yaccarino might encourage her cohort to do covert communications work. The company needs it, and the Hilton embargo came only a few days after her disastrous interview at Code, so maybe she needs it too. What’s more, Yaccarino seems to work the janitor shift. Musk blows things up, and Yaccarino mops up the mess. It makes sense that she needs someone else to silently grab a mop too.

Kylie Robison

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Today’s edition was curated by David Meyer.

NEWSWORTHY

OpenAI chips. Reuters reports that OpenAI is considering a move to in-house AI chips. Competitors such as Google and Meta use their own processors alongside industry-standard products (mainly GPUs from Nvidia). The latter are expensive and currently hard to get hold of—OpenAI CEO Sam Altman has publicly complained about this scarcity.

Bing AI-image controversies. Microsoft’s integration of OpenAI’s DALL-E image generator into Bing Chat is proving to be predictably controversial. As 404 Media reports, the free service’s guardrails aren’t enough to stop people generating images of Mickey Mouse or Spongebob Squarepants “doing 9/11,” while Bellingcat reports that the far-right is having a field day creating racist memes and antisemitic propaganda using the tool.

X revenues increase slowly. The former Twitter saw its revenues increase by a “high-single-digit percentage” between Q2 and Q3, according to a Reuters source who heard a Thursday call between X CEO Linda Yaccarino and the company’s long-suffering bankers. Yaccarino reportedly said X will test a triple-tiered subscription model, with higher payments getting users fewer ads. (Bonus read: The SEC is trying to force Elon Musk to testify in the agency’s probe of his Twitter acquisition.)

SIGNIFICANT FIGURES

$200 million

—The size of Canva’s new fund for creators who submit objects into the graphic-design platform’s marketplace, and agree to let Canva train its AI models on their work

IN CASE YOU MISSED IT

Why U.S. Commerce Secretary Gina Raimondo is calling Huawei’s new phone ‘incredibly disturbing’, by Lionel Lim

Slack will pause normal business operations for one week on Monday because employees have fallen behind on internal training, by Kylie Robison

Elon Musk’s $13 billion whip hand against Wall Street: How interest rates and the financial disaster at Twitter put the world’s richest man in the driver’s seat, by Shawn Tully

FTX cofounder testifies he and Sam Bankman-Fried let crypto hedge fund Alameda withdraw unlimited funds from exchange—and then lied about it, by Associated Press

Will AI mean fewer discounts at your favorite retailers? Companies hope the answer is yes, by Megan Arnold

Elon Musk got rid of headlines on Twitter/X. It’s massively backfiring, by Nick Lichtenberg, Paige Hagy, and Chloe Berger

BlackBerry will spin off Internet of Things business, aims to unlock value ‘being masked’ by other struggles, by Bloomberg

BEFORE YOU GO

Tackling space debris. The $150,000 fine that Dish received on Monday from the Federal Communications Commission could mark a “major step toward cleaning up space junk,” despite its modest size. That’s according to MIT Technology Review, which notes how the fine hit Dish’s share price by a whopping 13%.

Apart from forcing companies to face reputational damage, the piece posits that such fines could encourage the growth of the nascent space junk removal business. The amount of stuff in Earth’s orbit continues to grow rapidly, thanks to SpaceX, Amazon, and others sending up thousands of new satellites. Almost 2,000 dead satellites are already making it harder to avoid collisions with the 8,000 live ones.