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.
  • merdaverse@lemmy.worldEnglish
    4·
    7 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.

  • Kwyjibo1@lemmy.myserv.oneEnglish
    3·
    7 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.

  • skozzii@lemmy.caEnglish
    2·
    6 days ago

    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.

      • _stranger_@lemmy.worldEnglish
        2·
        7 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.

      • turnip@sh.itjust.worksEnglish
        1·
        6 days ago

        He did it to escape Tesla stock. Because car companies are heavily cyclical.

        He’s succeeding not failing, unfortunately.

  • peteyestee@feddit.orgEnglish
    2·
    7 days ago

    So what is he planning on doing? Make the worlds most corrupt porn Ai service? Or an AI political drama machine?

  • KulunkelBoom@lemm.eeEnglish
    0·
    7 days ago

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

  • SunshineJogger@feddit.orgEnglish
    6·
    8 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.

    • alvvayson@lemmy.dbzer0.comEnglish
      31·
      8 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.

      • wewbull@feddit.ukEnglish
        1·
        7 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
          1·
          7 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.

      • cm0002@lemmy.worldEnglish
        3·
        8 days ago

        The incumbents will go broke.

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

      • golli@lemm.eeEnglish
        0·
        8 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·
          7 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.

          • golli@lemm.eeEnglish
            0·
            6 days ago

            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.

            • alvvayson@lemmy.dbzer0.comEnglish
              1·
              6 days ago

              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.

  • ChicoSuave@lemmy.worldEnglish
    4·
    7 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
      1·
      7 days ago

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