Elon Musk sells X to his own xAI for $33 billion in all-stock deal
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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/
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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.
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So what is he planning on doing? Make the worlds most corrupt porn Ai service?
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Coincidence? I think not!
Omg I just realized 88 is also how old his melting body looks.
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That's how I've been pronouncing it in my head when I read it.
I still say "Twitter" though because that and the gulf of Mexico are the only things I feel are okay to deadname.
I've always pronounced it gzitter
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So what is he planning on doing? Make the worlds most corrupt porn Ai service?
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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
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So... computer programs can now own property. Interesting. Is this the first step in giving computers the vote?
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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.
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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.
I love it when you talk dirty 🤪
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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..
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YAAASSSS!! I love to think of him losing money without money his influence plummets
He did it to escape Tesla stock. Because car companies are heavily cyclical.
He's succeeding not failing, unfortunately.
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So... computer programs can now own property. Interesting. Is this the first step in giving computers the vote?
AI dystopia
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So what is he planning on doing? Make the worlds most corrupt porn Ai service?
Companies are no longer requires to disclose that they are owned by a shell. This is the beginning of his ultimate grift.
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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.
As i understand it most of the money they are investing goes into new datacenters. So when a model gets outdone by a new one they still have those, unlike e.g. OpenAI that use other companies resources (i think microsoft and oracle mostly?). In a way companies that use those external clouds to train their own models are financing the investments needed for the big players.
AWS, GCP and Azure are all growing 30%+ yoy, are profitable and if anything supply constraint in that they can't build more capacity fast enough to meet demand. So it seems to me that to some degree they are already recouping some of those investments. I don't see a drop in demand for compute, and even if using/training ai would become less resource intensive, Jevons paradox would just lead to more demand.
Of course they also burn a lot of money as anytime a new model gets trained and beats the older ones, it kind of renders the resources spend on the previous one worthless. But to me that seems like the cost of doing business.
The current investments they can afford. What would actually lead to shedding huge amounts of marketcap is, if they'd let a rival establish themselves. Similar to how the movie studios didn't get into streaming early (mostly to not hurt their cable business) and gave Netflix enough time to establish themselves.
To comment on something you mentioned in another reply below:
I just don’t see a world where most people are coughing up more than $10 a month for AI.
I think the big money will be in the business world, where salaries for actual people are high enough that saving a person even a few hours/week or replacing a single employee saves so much money that even expensive subscriptions would easily be worth it.
On the consumer side as you say running smaller models locally will likely be the norm. But that means it would be free for both the likes of Deepseek and Google. And then it'll just come down to who has access to personal information and is better embedded, which would be likely be whoever also controls other aspects of a users life, such as Goole with Android, gmail etc. Money here will be made just as it is done with other free services.
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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.
We enter hostile takeover territory around $115
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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.
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As i understand it most of the money they are investing goes into new datacenters. So when a model gets outdone by a new one they still have those, unlike e.g. OpenAI that use other companies resources (i think microsoft and oracle mostly?). In a way companies that use those external clouds to train their own models are financing the investments needed for the big players.
AWS, GCP and Azure are all growing 30%+ yoy, are profitable and if anything supply constraint in that they can't build more capacity fast enough to meet demand. So it seems to me that to some degree they are already recouping some of those investments. I don't see a drop in demand for compute, and even if using/training ai would become less resource intensive, Jevons paradox would just lead to more demand.
Of course they also burn a lot of money as anytime a new model gets trained and beats the older ones, it kind of renders the resources spend on the previous one worthless. But to me that seems like the cost of doing business.
The current investments they can afford. What would actually lead to shedding huge amounts of marketcap is, if they'd let a rival establish themselves. Similar to how the movie studios didn't get into streaming early (mostly to not hurt their cable business) and gave Netflix enough time to establish themselves.
To comment on something you mentioned in another reply below:
I just don’t see a world where most people are coughing up more than $10 a month for AI.
I think the big money will be in the business world, where salaries for actual people are high enough that saving a person even a few hours/week or replacing a single employee saves so much money that even expensive subscriptions would easily be worth it.
On the consumer side as you say running smaller models locally will likely be the norm. But that means it would be free for both the likes of Deepseek and Google. And then it'll just come down to who has access to personal information and is better embedded, which would be likely be whoever also controls other aspects of a users life, such as Goole with Android, gmail etc. Money here will be made just as it is done with other free services.
You could have made this same analysis in 2000 and it would be equally valid.
Yes, the business world is willing to pay big bucks to reduce labour costs and that business case is solid.
But we already see that success is not determined by the size of the model, but by the data and providing and processing that data in a smart way to the AI. And the companies that are successful in this area are model agnostic. They can, and will, switch to cheaper to run models that are good enough for their purposes.
So the dogma that whoever has the biggest model wins, just doesn't apply. AI is already hitting diminishing returns.
Once the investment money pumping the hype is gone, there will be a glut of capacity and a heavy price competition, which will drive down margins.
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so... Who are xai's investors?
I can see its products but I don't see the investors on wikipedia
