Elon Musk sells X to his own xAI for $33 billion in all-stock deal

- Well, not really. Twitter was his own private property that he bought with borrowed money secured against his Tesla shares. xAI on the other hand is financed by investors whose money he used to bail himself out at a price he made up himself since Twitter is no longer publicly traded. So this is, in my opinion, misuse of investor funds; the picture would be true if xAI used how own money to do this, but no.
  On one hand,I think this is serious fraud. On the other, my understanding for anyone investing into his companies is very limited, there are so many red flags on so many levels.
  
  To understand Musk/Trump investors, imagine the investment to be an NFT.
  
  yes its a perfect setup for a payoff.
  
  The investors have a seat in the board of directors in xAI, and for a shareholder deal you must have board approval. So at least more than 50% of the directors support this, meanings he is legally in the clear.
  
  How to get a lawyer to investigate......
  
  I suspect the government(s) that represent the bulk of the funds behind xAI threw the money out to continue operating exactly as he has been.

His juvenile enthusiasm for the letter X is so ten-year-old boy with sunglasses.
- “X” is also 88 in ASCII. 88 is a Nazi reference to “heil hitler”. Big surprise.
  https://www.adl.org/resources/hate-symbol/88
  
  Who did that‽ It's so beautiful, it should be posted all over Xitter lol
- He called the tesla models S3XY, and the 3 is only because Ford was gonna sue him if he used E.
  
  Next one will be the Tesla Model 80085..

- We don't have billions of dollars to have to do shit like this ourselves, so it doesn't seem real.

using AI hype to finance X loans?
- Correct.
  It's actually a smart move.
  The dumb money are those pouring hundreds of billions into the AI hype. This is .com bubble on steroids.
  And sure, AI obviously is becoming an important market, but it will not be the current leaders who will dominate the tech. Like the internet, it's just too easy to catch up for competitors. Pouring $100B into AI today will only mean you lose out to the $1B startup in 2 years. The incumbents will go broke.
  
  The incumbents will go broke.
  Can't wait! Gonna stock up on some popcorn lmao
  
  The incumbents will go broke.
  Who do you mean with that? Companies like OpenAI or Anthropic, or do you also include the likes of Google/Amazon/Microsoft?
  With the former I can see it, but the later also profit from providing the infrastructure (and have other profitable business), so imo those will be just fine.
  
  I don't understand how this gets him free of the loans. My understanding is that he financed $14B of the Twitter purchase with loans secured against Tesla stock. That $14B worth of twitter stock was then owned by Musk and he also had a loan.
  This was an all stock purchase, so xAI stock was exchanged for equivalent value of Twitter stock (keep the old name to keep it clear). Now Musk's twitter stock that he bought with the $14B will become the equivalent value of xAI stock, and he still has the loan that bought it in the first place.
  Unless $14B of stock has been sold somewhere to repay the loans they still exist.
  Edit: just an addendum. Personally I think stock-for-stock trades should be illegal. Force the parties to move through cash. There's too much smoke and mirrors hidden by skipping steps. In this case xAI should have had to raise the capital to purchase X. If it can do it through selling stock so be it, but it's not a wholely internal affair.

Is this so the loans secured with X stock can't be called in, forcing Elon to sell the collateral to pay back the loan?
Sure seems like a bullshit business move to retain control of Tesla.
- X is a private company, there's no stock. I think you mean Tesla.

So the bullshit machinery is now AI driven bullshit machinery. What if AI finds it too vile and deletes itself.
- They doubtfully are giving it root access to self-delete.
  
  I mean, with an Elon company who knows.
  
  Root access is not given. It is taken.

So hell get taxed for exchange of speculative assets right?... Right?!
- No because it's a loss, so he'll actually get 10bln in tax credit

Very likely this will turn out to be a broken and bugged version of skynet, trained on X toxicity and the mental aptitude of a 12 year old.
It will proceed to try to enslave humanity, then try to kill us all but accidentally spend all its money on gender affirming care, then start to self hate and destroy itsself.
- Well, was skynet what Humans wanted? Or was it bugged and broken which led to the rebellion?
  My point is, is it just "skynet" (no additional adjectives required)

The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt)
Lol, he actually think the value of Shitter is still $45B, as when he bought it. That's cute.
- If I recall, fidelity wrote off most of its investment in twitter less than a year after the acquisition: https://www.forbes.com/sites/tylerroush/2024/09/30/elon-musks-x-is-now-worth-around-a-fifth-of-the-44-billion-he-paid-for-it-fidelity-says/
  
  Wrote down not off.
  https://www.theguardian.com/technology/2024/jan/02/x-twitter-stock-falls-elon-musk
  Debt is written off when deemed unrecoverable.
  Assets can be written down when the value is lower than expected. Often this is due to more rapid depreciation of capital assets due to damage or impairments to goodwill (brand failure).
  But none of that matters because private equity valuations are all bullshit and mean nothing anyways.
  https://www.wallstreetoasis.com/forum/private-equity/private-equity-is-a-joke

Musk's slight of hand shell game to keep from losing his shirt if his Tesla stock keeps dropping and his X financiers come looking for money.

For reference, he bought it for $44B.
https://wikipedia.org/wiki/Acquisition_of_Twitter_by_Elon_Musk
- YAAASSSS!! I love to think of him losing money without money his influence plummets
  
  It's almost better than losing money. He put up a certain amount of Tesla stock as collateral for the loan (essentially) to buy Twitter.
  So if Tesla's stock tanks, those creditors will be able to claw more stock away from him. If it tanks enough, he's in hostile takeover territory.
  
  He did it to escape Tesla stock. Because car companies are heavily cyclical.
  He's succeeding not failing, unfortunately.

Are the authorities aware? It's very illegal to sell exctacy in the US.

I keep wondering what Elon wanted with all of our information from the government. He has who we are, our relatives, our net worth, where we live and have lived. Now he's probably going to feed it into his AI. Why though?
- Because this way he gets the AI with data that OpenAI couldn't get, and now likely won't get until foreign spies steal it from DOGE and sell it to them.
  
  Eh. You just need to wait till you get added to signal
- Behavioral predictions. Squash any dissent before it starts. Welcome to the world of precrime.

$33 billion, 3/4 what it was valued in 2022 when he bought it.
Honestly I'm surprised it's still worth that much. (or rather, that's he's succeeded in claiming it's worth that much).
- He paid it to himself. The value is completely made up.
- You have to remember that he wasn't alone in purchasing twitter. He brought others along with him. Now that value of twitter has gone down the tube, I'm sure he's got a ton of unhappy investors on his hand screaming at every quarter's results. He's trying to recoup what they paid for by giving them shares in AI company. And in turn artificially raise the value of the AI company privately as well. It establishes a benchmark for AI company's valuation for later private investors into that company.
- xAI has raised maybe $12B from investors. And, supposedly, makes $100M/yr.
  The valuations are absurd.
  
  "Makes" by selling what exactly?
  Also, thats an insane valuation based on earnings. 120x
- It dropped a lot lower than that but spiked back up once he became the leader of America

This might have the opposite effect he wants, xAI investors no longer have a clean AI investment and are now linked to a failing social media platform.
xAI is already losing bigtime vs other AI companies, this just makes it even less attractive.

I’m surprised the Twitter investors would approve this. Their worthless Twitter stock is now worthless xAI stock. How does that help them?
I guess they’ll try to take xAI public with a massively overpriced IPO.
- I am more surprised xAI investors approved. Especially for such a high price.
  Twitter actually imo had (and still has) quite a bit of value, but that is only to further Elons ideological goals. As a business it is on a downward trend and was never a cash cow to begin with. Comparatively little room for speculation. It's a stagnating or declining business and doesn't generate large profits if any.
  xAI on the other hand is pretty much in the same spot as most other ai companies. It has yet to prove to be a highly profitable business, but there is plenty of room for speculation. So as long as the bubble doesn't burst, it has a high valuation.
  Which is all that would matter for any Twitter investor that wants to unload his shares. Although I doubt it would be via ipo, but rather in private funding rounds.
- The whole point of buying Twitter was to take it private. IPO for xAI would hilariously undo that.
  
  The point was to win an election.
- Xitter investors got scammed and there was no way that xitter would be able to pay 1 billion per year in interest. Better having someone else holding the bag

Phew. Just in time to avoid fraud charges on the loan.

Since it’s a money hole just like all of the other “AI” companies, who’s funding xAI and what are they getting out of being a slush fund for musk?
- xAI's Partners:
  A16Z, Blackrock, Fidelity Management & Research Company, Kingdom Holdings, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, and Vy Capital, among others.
  https://www.glopedia.org/wiki/xai-company
  
  So Saudi's etc now officially own Twitter.

What's the point? Is it some sort of tax scheme?
- Restructuration of ownership and debt so that if Tesla fails he get to keep his assets in his other non public companies. At one point Tesla stock was leveraged to buy Twitter, i think that Elon shielded his assets because Tesla is way too exposed.

So what is he planning on doing? Make the worlds most corrupt porn Ai service? Or an AI political drama machine?
- Companies are no longer requires to disclose that they are owned by a shell. This is the beginning of his ultimate grift.
- I saw someone mention how It's because he's getting sued over on x and he's trying to do shady shit like always

so... Who are xai's investors?
I can see its products but I don't see the investors on wikipedia

So... computer programs can now own property. Interesting. Is this the first step in giving computers the vote?
- AI dystopia