Raphael Thysfrom the what-the-fuck? dept
Back on Christmas Eve of last year there were some reports that Elon Musk was in the process of shutting down Twitter’s Sacramento data center. In that article, a number of ex-Twitter employees were quoted about how much work it would be to do that cleanly, noting that there’s a ton of stuff hardcoded in Twitter code referring to that data center (hold that thought).
That same day, Elon tweeted out that he had “disconnected one of the more sensitive server racks.”
CNBC is running an excerpt from the new Walter Isaacson book about Elon that details what happened with the closing of the data center, and it is way, way, way crazier than even I expected. When Musk talked about how he “disconnected one of the more sensitive server racks,” he meant that entirely literally, in that he literally unplugged it, involving a series of improbable (and ridiculously dangerous and stupid) decisions that resulted with him under the floorboards in the data center pulling the plug, after multiple people warned him not to.
But, let’s take a step back. As the book details, Musk wanted to shut down the data center because he was in drastic “stop paying bills” mania at the time, and the Sacramento data center was costing the company $100 million/year. Also, apparently, the data center (which appears to be run by NTT) had told a Twitter employee that it did not think Twitter would be financially viable for very long.
The article starts out with a vignette that basically says everything you need to know about Musk. He had asked an infrastructure manager about moving the servers in Sacramento to one of the other two US data centers Twitter had, in Portland, Oregon. Then this happened:
Another manager at the meeting said that couldn’t be done right away. “We can’t get out safely before six to nine months,” she said in a matter-of-fact tone. “Sacramento still needs to be around to serve traffic.”
Over the years, Musk had been faced many times with a choice between what he thought was necessary and what others told him was possible. The result was almost always the same. He paused in silence for a few moments, then announced, “You have 90 days to do it. If you can’t make that work, your resignation is accepted.”
The manager began to explain in detail some of the obstacles to relocating the servers to Portland. “It has different rack densities, different power densities,” she said. “So the rooms need to be upgraded.” She started to give a lot more details, but after a minute, Musk interrupted.
“This is making my brain hurt,” he said.
“I’m sorry, that was not my intention,” she replied in a measured monotone.
“Do you know the head-explosion emoji?” he asked her. “That’s what my head feels like right now. What a pile of f—ing bulls—. Jesus H f—ing Christ. Portland obviously has tons of room. It’s trivial to move servers one place to another.”
If it’s making your brain hurt to have someone explain to you some fairly basic issues about infrastructure, the problem may be with you, dude. And, yes, it may have been “trivial” to move servers around the last time Musk ran an internet company over two decades ago, but for a major service relied on by hundreds of millions of people, that also has a ton of sensitive data, it’s… not trivial at all.
But a cousin of Musk suggested to Musk that they just do it themselves, while they were flying from the Bay Area to Austin, and Musk literally had his plane diverted to go to Sacramento and try it out, leading to… whatever the fuck this is:
They were somewhere over Las Vegas when James made his suggestion that they could move them now. It was the type of impulsive, impractical, surge-into-the-breach idea that Musk loved. It was already late evening, but he told his pilot to divert, and they made a loop back up to Sacramento.
The only rental car they could find when they landed was a Toyota Corolla. They were not sure how they would even get inside the data center at night, but one very surprised X staffer, a guy named Alex from Uzbekistan, was still there. He merrily let them in and showed them around.
The facility, which housed rooms of servers for many other companies as well, was very secure, with a retinal scan required for entry into each of the vaults. Alex the Uzbek was able to get them into the X vault, which contained about 5,200 refrigerator-size racks of 30 computers each.
“These things do not look that hard to move,” Elon announced. It was a reality-distorting assertion, since each rack weighed about 2,500 pounds and was eight feet tall.
“You’ll have to hire a contractor to lift the floor panels,” Alex said. “They need to be lifted with suction cups.” Another set of contractors, he said, would then have to go underneath the floor panels and disconnect the electric cables and seismic rods.
Musk turned to his security guard and asked to borrow his pocket knife. Using it, he was able to lift one of the air vents in the floor, which allowed him to pry open the floor panels. He then crawled under the server floor himself, used the knife to jimmy open an electrical cabinet, pulled the server plugs, and waited to see what happened. Nothing exploded. The server was ready to be moved.
The story gets dumber. Musk had a Tesla employee buy Apple AirTags to “track” the servers, and then the process of “moving them” should make everyone cringe:
Other workers at the facility watched with a mix of amazement and horror. Musk and his renegade team were rolling servers out without putting them in crates or swaddling them in protective material, then using store-bought straps to secure them in the truck. “I’ve never loaded a semi before,” James admitted. Ross called it “terrifying.” It was like cleaning out a closet, “but the stuff in it is totally critical.”
At 3 p.m., after they had gotten four servers onto the truck, word of the caper reached the top executives at NTT, the company that owned and managed the data center. They issued orders that Musk’s team halt. Musk had the mix of glee and anger that often accompanied one of his manic surges. He called the CEO of the storage division, who told him it was impossible to move server racks without a bevy of experts. “Bulls—,” Musk explained. “We have already loaded four onto the semi.”
The CEO then told him that some of the floors could not handle more than 500 pounds of pressure, so rolling a 2,000-pound server would cause damage. Musk replied that the servers had four wheels, so the pressure at any one point was only 500 pounds. “The dude is not very good at math,” Musk told the musketeers.
Note the pattern: a willingness to ignore the details of what could go wrong, YOLO it and just test it out, and the assumption that if nothing goes wrong when you do that, it means that everything is fine and nothing else could possibly go wrong.
I might never even ride in a Tesla after this.
And then this:
The moving contractors that NTT wanted them to use charged $200 an hour. So James went on Yelp and found a company named Extra Care Movers that would do the work at one-tenth the cost. The motley company pushed the ideal of scrappiness to its outer limits. The owner had lived on the streets for a while, then had a kid, and he was trying to turn his life around. He didn’t have a bank account, so James ended up using PayPal to pay him.
The second day, the crew wanted cash, so James went to a bank and withdrew $13,000 from his personal account. Two of the crew members had no identification, which made it hard for them to sign into the facility. But they made up for it in hustle. “You get a dollar tip for every additional server we move,” James announced at one point. From then on, when they got a new one on a truck, the workers would ask how many they were up to.
Remember, these are servers full of information, some of it sensitive, and Musk is basically hiring literally undocumented workers off the street and tipping them a dollar for each rack they can move.
And, if you think anyone at Twitter cares about the privacy of your data, think again:
The servers had user data on them, and James did not initially realize that, for privacy reasons, they were supposed to be wiped clean before being moved. “By the time we learned this, the servers had already been unplugged and rolled out, so there was no way we would roll them back, plug them in, and then wipe them,” he says. Plus, the wiping software wasn’t working. “F—, what do we do?” he asked. Elon recommended that they lock the trucks and track them.
So James sent someone to Home Depot to buy big padlocks, and they sent the combination codes on a spreadsheet to Portland so the trucks could be opened there. “I can’t believe it worked,” James says. “They all made it to Portland safely.”
This is… bad. Really bad. Like this could have been a massive disaster for an awful lot of people. This is the kind of thing that the FTC should go after Musk for. He was playing fast and loose with data that could have created very serious problems. And we have no way of knowing that the data was actually safe, despite the “big padlocks” from Home Depot.
Again, because “it worked,” some people will argue that Elon was right to do it this way. But just because your crazily stupid move didn’t create immediate chaos doesn’t mean that it’s the right move.
And, of course, it didn’t really “work.” As we detailed, Twitter toppled over a few days later, and this excerpt admits it was because of the “server move.” The article does note that Musk himself eventually said he shouldn’t have done this and it did cause a fair bit of problems for the site, including the disastrous “Twitter Spaces” where Ron DeSantis tried to launch his Presidential campaign.
“In retrospect, the whole Sacramento shutdown was a mistake,” Musk would admit in March 2023. “I was told we had redundancy across our data centers. What I wasn’t told was that we had 70,000 hard-coded references to Sacramento. And there’s still shit that’s broken because of it.”
Yeah, I mean, maybe if you didn’t tell the person trying to explain stuff to you that it hurt your brain to hear the details, you would have heard them telling you things like this.
Even dumber is that the “lesson” that Walter Isaacson seems to take from this little episode is not that Musk’s impulsivity is a dangerous, out of control wrecking ball that is going to destroy some serious stuff, but that (ex)Twitter’s employees had to learn how to better “manage” the man-baby in charge:
His most valuable lieutenants at Tesla and SpaceX had learned ways to deflect his bad ideas and drip-feed him unwelcome information, but the legacy employees at X didn’t know how to handle him. That said, X survived. And the Sacramento caper showed X employees that he was serious when he spoke about the need for a maniacal sense of urgency.
There’s something to be said for pushing back on needless rules and bureaucracy, but it helps if you actually understand stuff before doing so, rather than doing something like this that had half a dozen ways it could have ended in serious disaster and possible tragedy. The fact that it “only” resulted in Twitter falling over every few weeks for months likely means that Musk and his supporters got the very wrong lesson out of this.
But the lesson I would take from it: have nothing to do with Elon Musk or any product he sells. It’s bound to be stupidly, unnecessarily risky.
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from the poking-the-bear dept
If you read this morning’s story about Elon Musk’s impulsive decision to move servers out of Sacramento and up to Portland in a dangerous and wholly unsecure manner, and wondered if the FTC (who has two consent decrees with the company regarding how it protects users’ private data) was aware of it, we already have your answer. Last night, the DOJ filed a response to Elon trying to get out of the existing FTC consent decrees, and called out this story as one example. (The timing of the story and the filing coming out on the same day is a coincidence: the filing was due yesterday, and the book came out today).
As you may recall, in May of last year (just after Elon signed a deal to purchase the company), the FTC hit then-Twitter with a $150 million penalty for failing to abide by its 2010 consent decree regarding user privacy. It’s always the violation of the earlier consent decree that gets companies in deeper trouble, and beyond the $150 million, there was a new consent decree with even more requirements regarding Twitter keeping data safe and secure.
A few weeks after Elon took over, we pointed out that it appeared that the few people left who remembered the consent decree and understood what it meant all quit in one big statement. And, since then, we’ve been wondering if the FTC would actually do something here. There have been multiple reports saying that Elon’s not at all worried about the FTC, and that he was ready to fight them should they come after him.
Since then, it’s been unclear if the FTC was actually going to do anything. We know that an investigation had begun, but I’d heard some frustration from some people involved, saying that they didn’t believe that Lina Khan was really interested in doing anything. That said, these kinds of things can often take way more time than you’d think, so who knows.
Either way, it appeared that Elon didn’t want to wait, and back in July he had his favorite legal yes man, Alex Spiro (who once said “Musk sends rockets into space, and he’s not afraid of the FTC”), ask to have the consent decree dropped. The filing is all sorts of hilarious. Basically, it takes a “but I am Elon Musk, how could the FTC possibly have any right to question me!” attitude. It kicks off by saying that the investigation into Elon’s handling of the company “has spiraled out of control and become tainted by bias.”
There really is a lot of “how dare the FTC ask info from me, the guy who it’s widely reported doesn’t give a shit about the consent decree or privacy, and who had all the lawyers in charge of complying with that consent decree quit together,” as if that’s somehow unfathomable:
Mr. Musk’s acquisition of Twitter produced a sudden and drastic change in the tone and intensity of the FTC’s investigation into the company. Two weeks after the acquisition, an FTC spokesperson told media outlets that the agency was “tracking recent developments at Twitter with deep concern.” Brad Dress, FTC says it’s ‘tracking the developments at Twitter with deep concern’, The Hill (Nov. 10, 2022, 1:23 PM), bit.ly/3PYGkxj. The FTC took the unusual step of publicly confirming the existence of an investigation and threatening a CEO in his second week on the job: “No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.” Id. That same day, the FTC issued two demand letters seeking information about workforce reductions and Twitter Blue, a recently announced subscription service. See Exs. 7 (Twitter Blue), 8 (workforce reduction). The FTC claimed it sent these letters out of concern that “staff reductions impair Twitter’s ability to protect consumer’s information and comply with the [Consent Order],” Ex. 8, but the demands arrived more than a week before the November 22, 2022 deadline for Twitter to have its Program in place under Part V of the Consent Order. See Koffmann Decl. ¶ 6.
From that date until the present, the FTC has pummeled X Corp. with burdensome demand letters and requests for depositions. X Corp. has made every effort to comply promptly and completely with the FTC’s more than 200 demands for information and documents, and has produced more than 22,000 documents. Koffmann Decl. ¶ 7. But the FTC has continued to ratchet up scrutiny, issuing new demand letters and insisting on further document productions at a rate of nearly one new demand letter every two weeks. Id.. Some of these requests have, at best, tenuous connections to the privacy and security of user data or X Corp.’s compliance with the Consent Order, and many are seemingly issued in response to whatever negative news happens to be published about Twitter that day. Compare Matthew Cantor, Twitter office oddities go up for auction – from bird statues to rotisserie ovens, The Guardian (Dec. 13, 2022, 5:13 PM) (reporting that Twitter planned to auction “surplus corporate office assets” including items ranging from “bizarre decor to high-end cooking equipment”), bit.ly/3XNR43i with Ex. 9 (demanding, in a letter sent that same day, that Twitter “[s]tate whether, as part of its … cost-cutting measures, Twitter is also selling its office equipment”). Another request sought “all communications” sent by any Twitter employee “relating to Elon Musk” in any way, along with every communication sent to or from Mr. Musk since he had acquired control of Twitter
There’s also a lot of “Elon refuses to sit for a deposition, but how dare Lina Khan not agree to personally meet with him.”
The FTC’s unusually combative posture toward Mr. Musk and “Twitter 2.0” came as a surprise. In order to gain a better understanding of the FTC’s concerns, and how Twitter could demonstrate its commitment to user privacy, data protection, and information security, Mr. Musk made several requests to FTC Chair Lina Khan for a meeting. Koffmann Decl. ¶ 11. These included at least three requests conveyed from Twitter’s counsel to FTC staff throughout November and December 2022, as well as at least one voicemail left on his behalf with the Chair’s office. Id.. On January 27, 2023, Chair Khan finally responded but did not agree to a meeting—even in principle. Ex. 13. Instead, she stated that she would “consider scheduling a meeting with Musk,” but only after “Twitter [had] fully complied with all FTC requests,” which at that time totaled well over 100. Id. Ultimately, Mr. Musk was able to secure a meeting with former Commissioner Christine Wilson—ten days after she publicly announced her intention to resign from the FTC
This is the whining of someone used to always talking their way out of trouble by complaining to the manager. Beyond getting rid of the consent decree, the filing is pretty clear that Elon really, really, really does not want to sit for a deposition:
Mr. Musk is the majority owner of X Corp., an executive of the company, the Chief Technical Officer, and the former CEO. Koffmann Decl. ¶ 14. He would also be the very first current employee of X Corp. deposed by the FTC in this investigation. The FTC noticed Mr. Musk’s deposition less than a month after issuing its first post-acquisition demand letters. See supra at 6– 11. The FTC has not shown that he possesses any “unique and first-hand,” non-repetitive knowledge pertaining to X Corp.’s compliance with the Consent Order, which is the issue in dispute. The FTC’s attempt to depose Mr. Musk before anyone else at the company “shed[s] considerable light” on its true purpose: an improper effort to harass and annoy Mr. Musk himself.
Anyway, this week, the DOJ filed its response on behalf of the FTC, and you can almost hear the exasperated sighing.
The 2022 Administrative Order was designed to ensure X Corp. protects its users’ privacy and secures their data. For example, the order requires X Corp. to implement and maintain a privacy and data security program. It also requires the company to provide information about its compliance to the FTC upon request. In seeking “relief” from these obligations, X Corp. does not argue that the safeguards to which it consented have become unnecessary or unworkable. Rather, it complains the FTC asked too many questions after Elon Musk acquired the company. But the FTC asked questions because of sudden, radical changes at the company: within weeks of the acquisition, half of X Corp.’s employees were terminated or resigned, including key executives in privacy, data security, and compliance roles. At Musk’s urging, the company hastily released a new version of a product that it abruptly pulled back within days of its release. And numerous reports detailed alarming site outages, product malfunctions, and issues with data access controls. The FTC had every reason to seek information about whether these developments signaled a lapse in X Corp.’s compliance. X Corp.’s motion does not credibly argue otherwise; in fact, it largely fails to acknowledge the circumstances that catalyzed the FTC’s requests.
Instead, the company’s motion rests on hyperbolic allegations of “witness tampering” and an investigation “tainted by bias.” It supports these accusations by mischaracterizing cherry-picked excerpts from the deposition of a partner at Ernst & Young (“EY”), the firm X Corp. initially retained to assess its privacy and data security program pursuant to the 2022 Administrative Order. Yet X Corp. fails to mention that EY chose to terminate its engagement in February 2023 due to the extensive departures within, and a lack of support from, X Corp. Nor does X Corp. acknowledge that it has since retained a new independent assessor, which renders immaterial the company’s allegations regarding EY, since EY never produced a report of X Corp.’s program or submitted one to the FTC.
It also points out that, um, there are pretty obvious reasons to want to depose Musk, including that Musk himself told a concerned employee he would be “the single person responsible” for complying with the existing consent decree:
After the acquisition, Musk became X Corp.’s Chief Executive Officer as well as its sole director, President, Treasurer, and Secretary. Def. Ex. 5 at 2, 9. Musk also personally assumed supervisory authority over X Corp.’s privacy and information security program under the 2022 Administrative Order. Id. at 9. During his deposition, former Director of Threat Management and Operations Seth Wilson described a meeting with Musk and others on or about November 10, 2022, concerning possible security incidents and compliance with the 2022 Administrative Order. See Wilson Tr. at 74:14-24. Wilson testified he was concerned about compliance since X Corp. had lost both its Chief Information Security Officer and Chief Privacy Officer, and thus sought clarity from Musk on the “escalation point” for incidents. Id. at 72:10- 23, 77:12-24. At this meeting, Musk gave assurances that he was “the single person responsible” and that liability “falls on him.” Id. at 75:20-76:7. In terms of reporting security incidents, Musk told Wilson, “just go straight to me.”
And, uh, all this seems like a pretty good reason why Musk should be at the top of the list of people deposed:
As set forth above, several former employees testified about how Musk exercised granular control of X Corp., at times directing employees in a manner that may have jeopardized data privacy and security. Among other things, those individuals testified about Musk’s personal involvement in: (1) massive reductions in workforce, resulting in numerous gaps in ownership for privacy and security controls; (2) a hasty transport of unencrypted company servers without adherence to X Corp. data security policies; (3) a hurried release and retraction of a Twitter Blue product re-launch; and (4) individuals, including a third-party journalist not employed by the company, receiving broad and apparently unjustified access to X Corp. systems. See supra pp. 7-9. Moreover, Musk has apparently declared that he is the “single person responsible” for ensuring compliance with the 2022 Administrative Order. Wilson Tr. at 75:20-76:7. The evidence belies X Corp.’s characterization that Musk is merely a high-level supervisor without firsthand knowledge of the privacy and security issues at hand.
That (2) bit matches pretty clearly with the story we just posted regarding Elon hastily moving the servers out of Sacramento, where they failed to take even the most basic security and privacy measures seriously. Speaking of those servers, the DOJ filing notes that the servers contained… something sensitive. So sensitive it’s redacted in the filing.
There are other bits in there, like Elon demanding that Matt Taibbi and his rag tag crew be given full access to Twitter internal systems:
Former X Corp. employees testified about several concerning incidents involving Musk. For example, in early December 2022, Musk reportedly directed staff to grant an outside third-party journalist “full access to everything at Twitter. . . . No limits at all.” 3 See Sayler Tr. at 216:19-217:10; Wilson Tr. at 60:22-61:11. Consistent with Musk’s direction, the journalist was initially assigned a company laptop and internal account, with the intent that they be given “elevated privileges beyond just what a[n] average employee might have.” Wilson Tr. at 61:21-63:3; see Sayler Tr. at 216:19-218:17. But, concerned such an arrangement could expose nonpublic user information in potential violation of the 2022 Administrative Order, longtime information security employees intervened and implemented safeguards to mitigate the risks. See Sayler Tr. at 216:19-217:10; Wilson Tr. 63:23-64:3. Ultimately, the journalist did not receive “direct access” to X Corp. systems, but instead “was working with some other individuals within [the company] who were potentially accessing such services on [their] behalf.” Sayler Tr. at 218:10-17.
Wilson also received a screenshot of “a text message from Elon” directing that an executive assistant was to receive access to certain systems “immediately, and anybody standing in the way [was] to be fired.” Wilson Tr. at 64:4-65:10. Wilson thought the access was inconsistent with the assistant’s position. Id. at 66:16-22. To him, this “raised some concerns” that employees would “get pressure from an access standpoint to do things” and “be given access” to systems that “weren’t commensurate with their job responsibility.” Id. at 64:4-65:10. Former Director of Security Engineering Andrew Sayler similarly testified he had “ongoing questions about Elon’s commitment to the overall security and privacy of the organization” because “the manner in which Elon was requesting us to grant access to third parties that had not undergone our regular vetting process struck” Sayler as “having some degree of disregard for the overall sensitivity and security at that level of access.”
The filing also (which will surprise no one) admits regarding Musk’s demands that engineers launch his new “Twitter Blue” offering within a week that, of course, the company did not go through its privacy and security protocols that were mandatory under the latest consent decree. And, also how security engineers pointed out security and privacy flaws… and were ignored:
In another example, Musk insisted on launching the new Twitter Blue user verification service on an accelerated basis, despite staffing limitations. According to Kissner, Musk insisted the service “ha[d] to launch right now,” even though X Corp. was “so reduced in size that [teams were] struggling to keep the service up.” Kissner Tr. 130:22-132:12. Kieran recalled Twitter Blue was implemented so quickly that, “to ensure the speed that the product and engineering team was trying to work at,” the security and privacy review was not conducted in accordance with the company’s process for software development. See Kieran Tr. at 146:13-21. Sayler described how some of the security team’s recommendations went unheeded, including measures for mitigating the risk that people would purchase verification to impersonate other accounts. Sayler Tr. at 155:13-156:3. These concerns were well-founded: Twitter Blue was suspended the day after it was launched, after reports of fake accounts and impersonations
So, uh, yeah, it seems clear why the consent decree should remain and that Musk should sit for the depo.
Since modifying a consent decree requires showing that there were significant changed circumstances, the best that Sprio could cook up was that the FTC’s “harassment” represented changed circumstances. The DOJ points out that’s not even remotely close to how any of this works.
X Corp. contends the FTC’s alleged “harassment campaign” against it “constitutes a ‘changed circumstance’ rendering continued enforcement” of the Court’s Stipulated Order inequitable. Def. Mem. at 9, 14. Specifically, the company claimsthe FTC “impos[ed] new and burdensome [discovery] demands” and made “improper attempts to influence [EY’s] independent assessment,” id. at 14, and that those actions demonstrate “bias and prejudgment,” id. at 18. This argument fails for multiple reasons.
First, X Corp. has offered “no evidence to support [its] contention that the [FTC] has used the consent decree to conduct bad-faith, harassing investigations” that would warrant modification. SEC v. Musk, No. 22-1291, 2023 WL 3451402, at *2 (2d Cir. 2023) (unpublished). 5 Rather, the actions of which X Corp. complains were all taken to “investigate [X Corp.’s] compliance with the decree, as provided for in the parties’ agreement.” Id.
By claiming that the FTC’s investigation “has lost any plausible connection to lawful purposes,” Def. Mem. at 2, X Corp. ignores the obvious: under the 2022 Administrative Order, the FTC had ample authority to investigate X Corp.’s compliance, and the “fundamental transformation” within X Corp. gave it every reason to do so. To name just a few such reasons: shortly after the Musk acquisition, X Corp. laid off or fired at least half of its workforce, supra p. 5, and by April 2023 the company had reportedly lost about 80% of its workforce through subsequent rounds of terminations and resignations. 6 This exodus significantly impacted X Corp.’s privacy, data security, governance, risk, and compliance functions. Supra p. 6. Key compliance officers resigned—including the company’s entire Data Governance Committee—and the company’s former Chief Information Security Officer issued dire warnings about X Corp.’s data security and privacy practices under new leadership. Id. X Corp.’s independent assessor, EY, abruptly resigned due to a perceived lack of timely support from, and dramatic changes within, X Corp
If anything, I’m wondering if Elon’s posturing here actually forces the FTC’s hand and make it more likely to bring a complaint against the company. By making this effort to ditch the consent decree and avoid sitting for a deposition, Musk is making a mockery of the FTC consent decree process.
If the FTC lets him get away with it, it completely undermines the FTC’s authority on things like this and will lead to many others disregarding consent decrees as well. Surely this is more important than whatever this failed lawsuit the FTC brought was?