The Twitter approach to government efficiency

Donald Trump picked Elon Musk and the financier Vivek Ramaswamy to tackle one of his administration's biggest priorities -- reducing the size of the federal government.

The two have now shed some light on what Trump has called the Department of Government Efficiency plans to do. They appear to be taking a page from Musk's playbook for extreme cost-cutting.

"We won't just write reports or cut ribbons," Musk and Ramaswamy wrote in an opinion piece in The Wall Street Journal, addressing skepticism that their initiative, known as DOGE, can achieve. "We'll cut costs."

How they plan to do it: Musk and Ramaswamy said they would focus on razing agency regulations, laying off government employees and cutting costs, including appropriations for the Corporation for Public Broadcasting and Planned Parenthood. (That said, Congress created the public broadcasting organization and authorizes its budget.)

They'll lean heavily on two recent Supreme Court rulings, West Virginia v. Environmental Protection Agency and Loper Bright Enterprises v. Raimondo, which together sharply curtailed agencies' ability to act. "These cases suggest that a plethora of current federal regulations exceed the authority Congress has granted under the law," Musk and Ramaswamy write.

DOGE will present a lengthy list of regulations to gut to Trump, who they say would then be free to use executive action to halt their enforcement and then move to rescind them.

They're planning on sweeping layoffs, too. DOGE will identify the minimum number of employees needed for an agency to perform its "constitutionally permissible and statutorily mandated functions," Musk and Ramaswamy write. They intend to sidestep federal union protections for employees by carrying out layoffs that don't target specific employees.

Musk and Ramaswamy also want government workers to be in the office five days a week, which they say would lead to a wave of voluntary resignations.

The moves are imported from Musk's management of his companies, The Times's Kate Conger notes. Consider X: When the tech mogul bought the social network known as Twitter, he cut head count by 80 percent, forced workers to be back at the office full time and reduced costs including rent and vendor payments.

Critics say the DOGE plan will face serious roadblocks. Cutting programs that Congress has funded, but whose specific spending authorization has expired, could eliminate services including veterans' health care, NASA initiatives and antipoverty programs, The Washington Post reports.

Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank, also told The Post that eliminating a quarter of all federal employees would reduce federal spending by 1 percent at most.

And federal employee unions are girding for a fight, according to The Journal.

But Musk and Ramaswamy believe that they have an ace up their sleeve: the 6-to-3 conservative majority on the Supreme Court. "We are prepared for the onslaught from entrenched interests in Washington," they write. "We expect to prevail."

In other news, Musk took a jab at Jeff Bezos -- whose Blue Origin rocket company competes against his SpaceX -- on X.

HERE'S WHAT'S HAPPENING

Elon Musk's A.I. start-up is said to raise $5 billion. xAI's latest fund-raising round, which values the company at about $50 billion, is expected to include backers like Qatar's sovereign wealth fund and the venture capital firms Sequoia Capital and Andreessen Horowitz, The Wall Street Journal reports. Musk, one of President-elect Donald Trump's biggest supporters, has seen investor interest in his businesses soar since Election Day.

The Archegos founder Bill Hwang gets an 18-year prison sentence. A federal judge yesterday handed down the ruling over Hwang's role in the collapse of Archegos Capital Management, the family investment firm that caused about $10 billion in damages to big Wall Street banks. In another courtroom, a judge ruled that Gary Wang, a former executive at FTX who cooperated with prosecutors' case against Sam Bankman-Fried, would not face prison time.

Bitcoin hits another record. The digital token was trading around $98,000 this morning, adding to its staggering post-Election Day rally. Crypto bulls are hopeful that the Trump administration will cut regulation on digital assets, propelling the virtual currencies further into the economic mainstream. Separately, MicroStrategy, the software company with immense Bitcoin reserves, has raised more than $7 billion in recent weeks to add to its holdings of the cryptocurrency.

The unclear odds of the Google breakup bid

Late last night, the government formally asked a federal judge to split up Google, including by forcing it to sell its popular Chrome browser.

It's the most ambitious antitrust move by U.S. regulators in a generation. But even leaving aside President-elect Donald Trump's open opposition to a Google breakup, legal observers question whether the Justice Department will get what it wants.

What federal prosecutors asked for, beyond unloading Chrome:

That Google either sell off its Android operating system or be barred from requiring the use of services like search or the Google Play app store on the platform.

That Google be stopped from paying companies like Apple to be the default search engine on their devices, an arrangement that netted the iPhone maker as much as $1 billion a month by 2021.

That Google divest any stakes it holds in artificial intelligence companies whose products could compete with its search business. The tech giant has invested in Anthropic, the maker of a popular chatbot.

"Google's quality reflects the ill-gotten gains of an advantage illegally acquired," the government said in a court filing. "The remedy must close this gap."

The government was aware these are sweeping requests. The Times reports that the Justice Department and group of states that are co-defendants in the antitrust lawsuit were debating what to ask for right up until last night's deadline.

The Wall Street Journal adds that they had considered making the sale of Chrome dependent on whether Google failed to comply with limits on its search business.

But will the courts agree? Kent Walker, Google's president of global affairs, said that the "D.O.J.'s wildly overbroad proposal goes miles beyond the court's decision." The search giant is likely to appeal.

Legal experts say that the presiding judge in the case, Amit Mehta of the U.S. District Court for the District of Columbia, could move cautiously. The last time the government sought to break up a tech giant, in the Microsoft antitrust case of the early 2000s, an appeals court overturned the district court's ruling, and Microsoft remained intact.

Bombshell charges against an Indian tycoon

Shares in Adani Group plunged this morning after the U.S. authorities leveled fraud charges against Gautam Adani, its billionaire founder and a powerful ally of Prime Minister Narendra Modi. Prosecutors accused Adani of orchestrating a huge bribery scheme and lying to American investors.

Adani denied any wrongdoing. But there is growing scrutiny over how the tycoon and his companies operate. And that could cast a pall over Adani's global ambitions and U.S.-India relations as President-elect Donald Trump prepares to take office.

Adani is accused of participating in a more than $250 million scheme to win solar power contracts. Prosecutors say the tycoon and seven others agreed to bribe Indian officials in exchange for renewable energy deals worth billions of dollars.

Adani and others are accused of then leveraging those deals to try to raise billions from international and U.S. investors.

The S.E.C. also accused Adani and associates of violating federal securities laws. In a separate lawsuit, the agency said that Adani and two other executives misrepresented the company's anti-bribery and anti-fraud practices to raise millions from U.S. investors.

The latest fallout: Adani Green Energy canceled a planned $600 million sale of U.S.-dollar denominated bonds.

The charges are another blow to Adani and his companies. Last year, Hindenburg Research, an activist short seller, accused the conglomerate of orchestrating "a brazen stock manipulation and accounting fraud scheme." The accusations wiped billions off the Adani Group's share prices. The group denied the claims and spent months reassuring investors; its companies' stock prices rebounded.

Even before the Hindenburg report, critics said Adani's conglomerate won government contracts because of his connections to Modi.

What happens to Adani's U.S. investment plans now? Adani took to X to congratulate Trump after his victory, and said that his group would spend $10 billion on energy security and infrastructure -- a sign of deepening U.S.-India ties.

But given the arrest warrant issued for Adani, he may not be breaking any new ground in the United States soon.

Nvidia falls back to earth

Nvidia's shares this morning are down in premarket trading.

The roughly $90 billion sell-off has helped drag the broader S&P 500 into the red, after the chip-making behemoth posted third-quarter results that merely beat -- but didn't crush -- Wall Street's sky-high estimates. It's the latest sign that investors may be growing more demanding of the world's most valuable public company and others that have ridden the artificial intelligence boom to stratospheric valuations.

Here are the big takeaways from yesterday's earnings report:

The great: Revenue rose 94 percent year-on-year to $35.08 billion, and profit roughly doubled to $19.04 billion on the back of brisk sales of its high-end chips that power computer gaming systems, crypto mining and A.I.

The pretty good: Executives said they expected sales this quarter of $37.5 billion, an outlook that narrowly bested analyst forecasts. (Some projections were as high as $41 billion.)

Another bright spot: Demand for Blackwell, its newest A.I. chip, "is staggering," Colette Kress, the company's C.F.O., told analysts.

But ... The company said it would take several quarters to ramp up Blackwell production to meet demand. That said, the Blackwell engineering snags that Nvidia had reported in August don't appear to be affecting growth.

Technical and geopolitical challenges loom. That could also be weighing on investors. One question is whether President-elect Donald Trump will ratchet up trade restrictions on China, a key market for Nvidia. Jensen Huang, Nvidia's C.E.O., told analysts that "we will comply with any regulation that comes along."

Analysts are also closely watching so-called hyperscalers. These include Nvidia's biggest customers, including Alphabet, Amazon, Meta and Microsoft, which are spending billions on chips and data centers -- and are increasingly using in-house chips and hardware to reduce their reliance on Nvidia and other chipmakers.

THE SPEED READ

Deals

In sports news: Egon Durban, the co-C.E.O. of the investment giant Silver Lake, is reportedly set to buy a stake in the Las Vegas Raiders; and Dan Gilbert, the owner of the Cleveland Cavaliers, wants to bring an W.N.B.A. team to Ohio. (Sports Business Journal, CNBC)

The deal maker Paul Taubman has become a billionaire on paper after investor expectations for a boom in M.&A. bolstered the market value of his investment bank, PJT Partners. (FT)

Politics and policy

Gina Raimondo's Commerce Department is on a mission to spend as much as it can of the remaining CHIPS and Science Act budget before Donald Trump takes office. (Politico)

"Behind the Scenes at a Secretive Gathering of Rising MAGA Donors" (NYT)

Best of the rest

Will the "all in or all out" approach of Josh Kushner's Thrive Capital pay off? (FT)

"The Technology the Trump Administration Could Use to Hack Your Phone" (The New Yorker)

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