Comment on Elon Musk sells X to his own xAI for $33 billion in all-stock deal
humanspiral@lemmy.ca 1 week ago
He said the deal values xAI at $80 billion and X at $33 billion.
Not sure Musiks ownership level in both. xAI being worth $80B is a stretch, in that it certainly doesn’t have profits or revenue to justify it, and has competition that could end in it being a loser. X value is also high though. Whether it is an unfair transaction depends on which is more overvalued. Transaction is same as if xAI were value $8B and X 3.3B.
humanspiral@lemmy.ca 1 week ago
follow up on this… xAI appears to have raised $18B in funding rounds. But November 2024 was at $50B, December 2024 was $40B. X’s ownership of xAI, caused its interest expense on high debt levels to rise to $1B/year (debt levels approaching close to $20B estimated)
It is a major stretch to value xAI higher than the $50B peak. Chinese open source models released have depressed overall US AI stocks, and xAI has major cash burn in implementing its model, and Musk has ever increasing brand hatred culminating in government persecution threats to anyone who could say something negative about him or his companies that becomes propaganda fuel for actual damage to his vehicles/dealerships.