TEXAS 一 Tesla CEO Elon Musk on Monday announced he may pull out of his $44 billion deal to purchase social media giant Twitter because, according to him, the company won’t disclose information on the number of its spam bot accounts.

What You Need To Know

  • Texas Attorney General Ken Paxton on Monday announced he is investigating Twitter for potentially underreporting its number of spam bot accounts

  • This comes after Tesla CEO Elon Musk announced he may not go through with his $44 billion deal to purchase Twitter because, according to him, he has not been provided with information about the number of bots

  • Paxton said that if Twitter is misrepresenting its number of spam accounts it may be “misleading Texans” and doing so in violation of the Texas Deceptive Trade Practices Act

  • Paxton has given Twitter until June 27 to respond to his Civil Investigative Demand

Later that day, Texas Attorney General Ken Paxton announced he’s investigating Twitter over the number of its bots, claiming the company may be “misleading Texans.”

“I have a duty to protect Texans if Twitter is misrepresenting how many accounts are fake to drive up their revenue,” Paxton wrote in a tweet.

In an investigation announcement, which makes no mention of Musk, Paxton says Twitter’s potential false reporting of the number of bot accounts may violate the Texas Deceptive Trade Practices Act.

“Twitter has received intense scrutiny in recent weeks over claiming in its financial regulatory filings that fewer than 5% of all users are bots, when they may in fact comprise as much as 20% or more. The difference could dramatically affect the cost to Texas consumers and businesses who transact with Twitter,” the announcement reads.

Paxton has issued a Civil Investigative Demand that calls on Twitter to turn over documents “related to how it calculates and manages its data and how these numbers relate to Twitter’s advertising business.”

Paxton gave Twitter until June 27 to respond.

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

A letter from Musk’s attorneys says he has repeatedly asked for information about the number of bot accounts since May 9, a month after he offered to buy the company, in order to evaluate how many of its roughly 229 million accounts are fake.

Musk in December 2021 moved Tesla headquarters from California to Texas and recently opened Giga Texas, a large Tesla manufacturing plant, in the Austin area.

The Associated Press contributed to this report.