Several of the largest tech firms have remained among Twitter's top advertisers this year — including Apple, Amazon and IBM — despite the rise in hate speech on the service as well as a wide range of incendiary tweets from owner Elon Musk, Axios' Sara Fischer and I report.

Why it matters: Musk's project to remake Twitter into what he calls a free-speech zone, and what critics see as an increasingly toxic environment, will prosper or fail depending on the choices both advertisers and users make to stay or go.

Driving the news: As early as December researchers documented a significant rise in hate speech on the site after Musk assumed ownership at the end of October.

• Twitter has also changed some of its policies since then, including eliminating the part of its hate speech rules that prohibited the targeted misgendering or deadnaming of transgender people.
• Musk himself has spread conspiracy theories and posted anti-transgender content while also engaging with accounts tied to hate speech.
• This week alone, Musk tweeted comments about George Soros that many saw as antisemitic. He also repeatedly questioned reports that the suspect in the Allen, Texas, mall shooting earlier this month was a white supremacist — discounting as "psy-ops" credible reports that the suspect had Nazi tattoos and wore a "right wing death squad" patch.
• In a CNBC interview, Musk essentially dared advertisers to pull back, telling the network's David Faber: "I'll say what I want, and if the consequence of that is losing money, so be it."

Meanwhile, Apple and Amazon were among the top advertisers on Twitter from January to April, per MediaRadar — as were IBM, Hewlett-Packard Enterprise and Comcast.

Between the lines: Conversations with people at some of these firms suggest a range of reasons for continuing to advertising — including fear of incurring Musk's wrath, existing business relationships with Musk and/or Twitter, and the fact that Twitter can be effective for certain types of advertising.

The big picture: Advertising remains Twitter's primary source of revenue, despite Musk's push to drive paid subscriptions. He recently named former NBC ad executive Linda Yaccarino to be Twitter's CEO, focused on the business side of the company.

• Musk isn't making her job any easier. "It's just amazing that [Musk] can't take a break from race commentary to give his new CEO some space to do the one job he needs her to do," former Twitter executive Jason Goldman tweeted this week.

Be smart: Unlike other advertising crises around hate speech, marketers have yet to face large-scale boycotts over advertising on Twitter, one source noted.

• That may be because there's already been so much data and reporting about advertisers' own skepticism.

Still, the absence of a boycott movement — like the one that Facebook faced in 2020 over its decision not to fact-check posts by then-president Trump —has also made it easier for advertisers to continue spending on Twitter without fear of being called out.

• "Any company cutting a check to Twitter is endorsing the surging racism, disinformation, and hate Musk has encouraged on his platform," Accountable Tech executive director Nicole Gill told Axios.

Yes, but: Even without an organized boycott, Twitter's overall ad outlook has been bleak.

• A March 2023 forecast from Insider Intelligence suggests Twitter will bring in roughly $2.9 billion in ad revenue for 2023, after initially forecasting in October 2022 that it would earn $4.74 billion, Axios has reported.

What they're saying: Only one company offered a response to Axios inquiries about their choice to continue Twitter advertising.

• "We meet our stakeholders where they are, and they continue to actively engage with us on Twitter," Hewlett-Packard Enterprise spokesperson Adam Bauer said in a statement.
• IBM declined to comment, while representatives at Amazon, Apple, Comcast and Warner Bros. Discovery have yet to provide a response.
• Twitter's press relations email account responded to Axios with its standard reply: a poop emoji.
• Many media companies, including Axios, also continue to run paid ad campaigns on Twitter. An Axios spokesperson declined to comment further.

The Supreme Court on Thursday ruled Twitter is not subject to claims it aided and abetted terrorism for hosting tweets from ISIS, and dismissed a related case involving YouTube, a major legal win for the two social media platforms, Axios Pro's Ashley Gold reports.

Driving the news: In Twitter vs. Taamneh, the court unanimously ruled that Twitter's hosting of terrorist speech did not make it legally responsible for terrorist attacks, and claims could not be brought under the federal Anti-Terrorism Act.

• In a separate lawsuit involving Google and YouTube, the court said it would not address whether Section 230 of the Communications Decency Act, which largely shields online platforms from lawsuits around content, can be applied to such claims.
• In that case, Gonzalez v. Google, plaintiffs argued YouTube should not get Section 230 liability protection for "recommendations," the way it sorts videos and shows users relevant results.

Why it matters: For major tech platforms, this means Section 230 remains unchanged for now — and their legal protection against being sued for what people say on their sites is still intact.

What they're saying: "This is a huge win for free speech on the internet," Chris Marchese, director of litigation for tech group NetChoice, said in a statement. "The court was asked to undermine Section 230 — and declined."

The U.S., Japan and U.K. have announced major chip and quantum computing investments ahead of this weekend's G7 leaders summit in Hiroshima, Japan, Axios' Ryan Heath reports.

Why it matters: These investments accelerate the tech decoupling between democracies and China and consolidate America's pivot to active industrial policy for the first time since World War II.

What's happening: Micron said it would invest $3.6 billion in advanced memory-chip making in Japan.

• IBM and Google announced a $150 million investment in quantum computing research in the U.S. and Japan, in a deal shepherded by U.S. ambassador Rahm Emanuel.
• The U.K. said it would put up to $1.2 billion toward semiconductor research and design over the next decade.

Between the lines: In response to China investing heavily in strategic technologies, "there'll be more and more Buy America provisions in different bills, and the U.S. government will be a bigger and bigger player in the overall supply chain," Craig Silliman, Verizon executive vice president, told Axios.

Meanwhile, as leaders of the world's biggest democratic economies gather in Japan, leading AI CEOs are meeting behind closed doors in Lisbon, Portugal, at the uber-elite (and secretive) Bilderberg conference.

• Those attending include OpenAI's Sam Altman, Microsoft's Satya Nadella, DeepMind's Demis Hassabis and former Google CEO Eric Schmidt.

Trading Places

• Scale AI has hired John Brennan to be general manager of its federal division.

ICYMI

• OpenAI released a free iOS app for ChatGPT, with plans for an Android app soon. Meanwhile, New York Public Schools are dropping their ban on ChatGPT. (Axios/Chalkbeat)
• Five TikTok creators are suing Montana's attorney general, saying a recently approved statewide ban on the popular Chinese-owned social media platform would violate the First Amendment. (Axios)
• Debt collectors are seeing a big opportunity to use AI-powered chatbots to hound those who owe money. (Vice)

If all that BlackBerry talk earlier this week got you feeling nostalgic, the maker of the Pebble watch created this modern day Raspberry Pi-based recreation of the classic monochrome email pager.