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.
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.
He called the tesla models S3XY, and the 3 is only because Ford was gonna sue him if he used E.
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 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.
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.
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.
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.
