Elon Musk has sold social media site X to his own xAI artificial intelligence company in a $33 billion all-stock deal, the billionaire announced on Friday.
    • Laser@feddit.orgEnglish
      311·
      21 days ago

      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.

      • gencha@lemm.eeEnglish
        10·
        21 days ago

        To understand Musk/Trump investors, imagine the investment to be an NFT.

      • viking@infosec.pubEnglish
        1·
        21 days ago

        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.

      • sporkler@lemmy.worldEnglish
        1·
        21 days ago

        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.

        • klu9@lemmy.caEnglish
          2·
          21 days ago

          They thought all they were getting was a piece of the latest hype. Now they’ve got leverage over the entire govt of the United Fucking States!

    • alvvayson@lemmy.dbzer0.comEnglish
      13·
      21 days ago

      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.

      • cm0002@lemmy.worldEnglish
        3·
        21 days ago

        The incumbents will go broke.

        Can’t wait! Gonna stock up on some popcorn lmao

      • wewbull@feddit.ukEnglish
        0·
        21 days ago

        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.

        • alvvayson@lemmy.dbzer0.comEnglish
          3·
          21 days ago

          To know how exactly it works, we’d need to know details that aren’t public.

          But just speculating, if the creditors value the combined xAI+X higher than just X, then there is room to transfer the loan to the new company and away from Tesla.

          But whatever the details are, Elon isn’t an idiot when it comes to money. He definitely has advisors who cooked up the optimal way to profit from the AI hype.

          And the essence of that is that Tesla shareholders will be left holding the bag, while Elon utiizes X/xAI to capitalize on the hype.

      • golli@lemm.eeEnglish
        01·
        21 days ago

        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.

        • alvvayson@lemmy.dbzer0.comEnglish
          0·
          21 days ago

          I definitely see Google/Amazon/Microsoft shedding a huge amount of market cap when the time comes to write-off the 100s of billions they invested the past two years.

          They just don’t have any feasible path to recouping those investments.

          Sure, they’ll never go fully broke, that’s just a nice word for emphasis.

          • Kushan@lemmy.worldEnglish
            1·
            21 days ago

            I actually think Google is going to win this one, they’re the only ones making their own hardware to run their own models. Open ai are starting down that road but they’re years behind.

            When you look at the pricing of all the AI companies, Google’s is so much cheaper (orders of magnitude) and they’re not having to pay Nvidia billions to do it.

            • alvvayson@lemmy.dbzer0.comEnglish
              2·
              21 days ago

              I actually agree with you, they definitely have the edge, but I still am skeptical that they will be able to maintain their valuation.

              I just don’t see a world where most people are coughing up more than $10 a month for AI.

              Most people will only use free AI and companies will mostly buy cheap AI.

              Running Deepseek locally is basically free. That’s the competition.

  • halfapage@lemmy.worldEnglish
    17·
    21 days ago

    Funny that people take this news as some kind of technological fusion between companies and not housekeeping of the dipshit’s personal finances.

  • ChicoSuave@lemmy.worldEnglish
    16·
    21 days ago

    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.

    • vxx@lemmy.worldEnglish
      31·
      21 days ago

      X is a private company, there’s no stock. It was secured with Tesla stock.

          • TheFriar@lemm.eeEnglish
            5·
            22 days ago

            He’s an egotist and a man child, while also being the richest man in the world. All he has to do is say he wants something and people have to do it. He doesn’t have to “do” anything to be fully influencing what happens. Look at Twitter, look at the federal government. Sycophants surround these assholes and basically have to bend the knee and do what they say. When capital equals power, this is what happens. Just like when blood line meant power, the kings didn’t “do” anything. But the people who took their orders from them did.

          • thejml@lemm.eeEnglish
            4·
            22 days ago

            So far I’ve seen/heard Elon:

            • Start shitty arguments
            • Be a fascist
            • Fire people they probably needed
            • Cut funding or drop useful projects
            • Spew senseless, poorly thought out catch phases
            • Censor people that were right but didn’t align with his narrative
            • Take credit for other people’s work
            • Pass the blame for failures

            Have yet to see him sign a check… it’s why they lost their boulder office, for instance.

          • Snot Flickerman@lemmy.blahaj.zoneEnglish
            1·
            22 days ago

            I mean, I think that’s their point, that Elon isn’t directly involved, and he’s constantly shitcanning important people who would prevent something like this happening.

          • Arbiter@lemmy.worldEnglish
            1·
            21 days ago

            Yeah, he yells at people to go faster and ignore industry best standards or be fired.

        • Snot Flickerman@lemmy.blahaj.zoneEnglish
          1·
          22 days ago

          And said, chmod 000 came I out of my mother’s LLM, and chmod 000 shall I return thither: the root gave, and the root hath taken away; blessed be the name of the root.

  • merdaverse@lemmy.worldEnglish
    10·
    21 days ago

    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.

  • SunshineJogger@feddit.orgEnglish
    9·
    22 days ago

    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.

    • dmtalon@infosec.pubEnglish
      1·
      22 days ago

      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)

      • _stranger_@lemmy.worldEnglish
        0·
        21 days ago

        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.

  • pelespirit@sh.itjust.worksEnglish
    6·
    22 days ago

    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?

  • Kwyjibo1@lemmy.myserv.oneEnglish
    5·
    21 days ago

    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.