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He has done this move before with Tesla buying Solar City. When you do a deal with yourself you can assign any value you want to assets, it isn’t a competitive process. In the previous case Solar City was dying but its acquisition by Tesla was pitched as a great synergy.

https://www.businessinsider.com/solarcity-tesla-energy-belea...

There were a few lawsuits from Tesla shareholders about the acquisition regarding self dealing but they didn’t succeed:

https://en.wikipedia.org/wiki/SolarCity

In similar news: my left hand acquired my right hand today in an all stock deal valuing the combined hands at $1T. Praising the announcement my arms noted on the deal: “With these two hands now together, there’s nothing our combined fist of might can’t do.” Competitors, my left and right feet, declined to comment on the merger but are said to be in their own separate talks about a deal.

This move makes it more likely that the internal number for TSLA is not good, and Elon is expecting the price to go down.

He has access to the real revenue number. If it's going well, he wouldn't have to perform this maneuver. xAI was relatively separated from X and TSLA, and wasn't having the backlashes associated with the two. Now he risks having the xAI branding tarnished too. He wouldn't do this unless the TSLA internal numbers are bad and he has to protect himself first, at the cost of xAI brand.

So he just sold himself a company he already owns for a valuation that he himself assigned to that company but that was less than what he paid for it, and he paid entirely using “money” that has a made up value and which he issues himself?

Wild.

Seems to me he's just scammed xAI investors, who thought they were investing in an AI company, into bailing him out of his failed Twitter purchase - they are now the idiots who paid $44B for Twitter (recently valued by Fidelity at $10B), and Musk gets his money back.

Okay, I know Tesla's extremely high P/E ratio is because it's worth is not just tied to cars, and so xAI priced at $20B more than Anthropic does not necessarily mean xAI's AI products are that much better than Anthropic's (e.g. presumably xAI's worth is tied to synergies with Tesla FSD, Optimus, and maybe even Neurolink)...but what products does xAI actually offer, other than Grok being an add-on for premium X subscriptions?

Not only does the Grok API not have access to Grok 3, which was released more than a month ago, it doesn't even have it's own SDK? [0]

> Some of Grok users might have migrated from other LLM providers. xAI API is designed to be compatible with both OpenAI and Anthropic SDKs, except certain capabilities not offered by respective SDK. If you can use either SDKs, we recommend using OpenAI SDK for better stability.

(every code example has a call for `from openai import OpenAI`)

How would using Grok be viable for any enterprise? And if Grok's API is designed to be drop-in replacement for OpenAI's, how are they not able to just use Grok to whip up their own SDK variant based on OpenAI's open-sourced SDK [1] and API spec?

[0] https://docs.x.ai/docs/guides/migration

[1] https://github.com/openai/openai-python

So the real story here is that he was in danger of getting margin called on the loan he took to buy Twitter which he financed with TSLA shares as collateral, and this is him moving money around so he doesn't have to face the reality of actually getting margin called amid a sinking TSLA, right?

What is the play here? Using money invested in xAI and its inflated valuation to bail out the X investors?

The SEC would likely have a field day with this, if there was still a functional SEC.

I was confused when xAI was started as a separate company. Twitter had the data, the delivery surface, the user base. I wondered why a separate entity was created to house the AI part.

I should have had a clue because I was talking to a CEO of a startup and trying to encourage him to invest dev time in AI features. He was reluctant even though he was optimistic about AI. He had too many things to work on, not enough resources. I suggested he raise more capital. He pointed out that raising capital in an older startup would mean people scrutinize your revenue growth. He would be able to raise more money at a better valuation for a completely new AI business than he could possibly raise to inject cash into his existing traditional startup.

So this makes sense of my initial confusion. I am just surprised it happened so fast.

Marc Andreessen made headlines a few months ago during the campaign about some shadowy meeting he was brought in about AI. He claimed the government told him they had picked a few winners of the AI race and no new foundational startups would be allowed to compete. Everyone has been talking about a "Manhattan project" like push for AGI to make sure the US gets it before anyone else. Given how quickly xAI has risen, given it's access to massive GPU resources, I can't help but reach for my tinfoil hat here. A platform with the reach of X/Twitter combined with an AI is a technocratic wet dream.

Can't wait for the Monday issue of Matt Levine's newsletter.

Can we speculate if X's CTO didn't like the reorg? 3 days ago "X’s director of engineering, Haofei Wang, has left the company " https://news.ycombinator.com/item?id=43470613

Is it weird that if I do not have an account on X, I also have no idea what X actually is? If I go to the home page, it just says "Happening now". No idea what that means though. If I then navigate to the tiny "About" link, I'm not getting any smarter. The "About the company" page takes to a 404. So, unless you know already what X is, you have no obvious way to find out what it is either.

With the grok integration into X already being a thing and both being owned by Elon and called X it never really seemed like they were actually two different companies at any point so this is an interesting reminder that they were not.

A story about the most destructive man in the history of high technology (who is currently demolishing the future for most everyone on here) bilking his co-investors out of billions of dollars was allowed to stay up on Hacker News for two hours? Huh!

The only thing worse than investors assigning random made up valuations to their portfolio companies is owners themselves assigning random made up valuations to their companies.

> X is the digital town square where more than 600M active users go to find the real-time source of ground truth

OK, now I know somebody has fast-forwarded the calendar to April 1st.

He’s currently bailing himself out because the collapse of his Tesla stock would likely mean he’s unable to service the loans he took out to buy X.

Honestly surprised the VCs that dumped all the money into xAI are on board. I’m guessing he still must have controlling stake.

Who is he going to merge the US with after he fucks that up?

This is probably a play to make X more invest-able, probably combined with some training data rule he foresees in the future.

Musk's companies have raison d'être, and the mergers (SCTY & TSLA) generally have one too.

X has been bleeding money, but has no access to cash. AI on the other hand he can peddle to sovereign wealth funds, apply for government grants, etc. X then becomes a write off against a larger company. xAI seems to be a pretty small company though; linkedin gives me 11-50 employees, which is pretty small for a DIY scaled LLM company worth (WHAT?!)...

Well some VCs are going to be happy. Or sad. Either way, they'll likely need to mark down their fund.

Just sold my Ford Edge to my wife to $1.3bn - all in stock :)

There's a lot of negativity here, but tbh, it makes complete sense. Grok and X are really tightly integrated already, and it was strange that they were separate enterprises to begin with. That part was odd.

Fixing it isn't odd.

This takes us from "purge the bots" to the polar opposite.

I suppose there's no incentive now to hide the obvious synergies between the component parts of an effective propoganda machine.

But how can X be the everything company if it's merely a subdivision?

if this didn’t happen, how much more would TSLA have to drop for the $12B debt to get margin called given it is collateralized by TSLA? IIUC what has happened here is the debt has been repaid by selling xAI equity? Wasn’t xAI constructed in the first place to poof some magic money from thin air to give to unhappy Twitter investors and keep them happy?

This valuation seems about as justified as a bored ape NFT…

I’m interested in understanding what happened to the debt. My simplistic understanding was that a bunch of the $13B debt raised for the twitter aq was secured by Tesla stock, with some sort of callable mechanism (which got a bit scary when Tesla stock sank).

I assume with this deal some of that debt got converted to equity ($1B?) and any callable mechanisms got repriced but I cannot find details to figure this out.

> xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent.

Our job as humans is to train his AI models until we can no longer justify our existence.

This is Solar City all over again, but at least this time it's not with public investors money.

He can now use the money raised by xAI, to pay off the debt of X, which was bleeding money.

So today in corporate America we have:

- Trump pardoning one of the most obvious scammer of the past 10 years - Trevor Milton

- Trump pardoning some obvious crypto scammers

- Musk using investors money from one of his companies, to bail out his another company, at the valuation he himself set

Unprecedented times. The damage to the rule of law will be hard repair - it will take decades.

It should be noted that the other xAI shareholders are/were supportive of the X takeover and all. So although I personally don’t like Elon, this doesn’t seem like self dealing as many here claim. Solar City worked out well even though it too seemed like self dealing.

There are actually bad things to hate him for but acquisitions fraud is probably not on the table.

What ever happened with the TSLA shareholders suing over xAI knocking the AI wind out of Tesla's sails?

I'm guessing the logic is that an AI company is sexier and given higher equity valuations than a struggling social network.

I'd feel great being someone that financed the takeover of X/Twitter, and being stuck with inflate shares in an also-ran AI play. Obviously there is no rule of law for Musk, and no recourse for them.

He'll keep his ball of twine rolling past TSLA's next earnings date on April 22nd.

Artificial intelligence purchases the largest repository of natural stupidity. Nothing surprising.

This feels like shady accounting. Did the lenders unnecessarily take a cut when they sold some shares recently?

Does the xAI company have investors to be valued at 80 billion? Can someone point me to its investors list or news about a previous funding round?

X users are now officially just training data for Grok.

"... seeking the truth ..."

Hahaha, ha ha, ha...

Maybe more accurate to say "spreading my truth".

I'm curious to know if people on HN still think twitter is doing better than ever

There must be some connection between this and the new equity funding last week, I would think?

March 19: "Elon Musk’s social network X has raised close to $1 billion in new equity from investors" "Musk himself participated in the equity raise" "The deal values X’s equity at roughly $32 billion." https://fortune.com/2025/03/19/elon-musk-x-twitter-equity-fu...

Tangible reasoning: So they raised 40b from xAI and brought X. Since musk owns X, xAI doesn’t need to pay a premium. Investors of X gets xAI share instead.

Non tangible reasoning: Since xAI uses data from X to train, and xAI likely will be used to explain and make new tweets. It makes the entire operation less complex. Elon is positioning X as the interface to the world and xAI will likely help control that. Remember he is gunning X to be an everything app and likely AI will be the core of how that will play out.

Generic, overhyped AI company with no moat acquires a social media mainly inhabitated by bots.

Tesla used to be cool, SpaceX still is. But these two appear worthless to me.

It may be valued 80B, it sure as hell isn't worth it. The AI is nothing special and has tons of competitors. The damaged Twitter brand isn't worth that much either.

Attorney and legal commentator Tristan Snell, via X: "Elon Musk's purchase of Twitter was financed by borrowing money. He used his Tesla stock as collateral. If Tesla stock keeps crashing, the banks/creditors could repossess Twitter."

Elon and Donald are a match made in con artist heaven

How the hell does this work??

I have five dollars in a box, and I buy a different box, also known to have five dollars in it, for the $5 in the first one. Now, according to this logic, I have a portfolio worth $10, since I still have the original box, worth $5 and the new one, also worth $5.

If I tried this at a gas station, I would be arrested if I got caught.

I wonder if Tesla will buy xAI. Doesn't Tesla need the GPU power of xAI? Are they renting it, or do they have their own servers?

What's the ratio between xAI and X valuations? Same as the ratio between leprechauns and unicorns.

This is interesting and may point to X / Twitter becoming more AI-driven in the future (many possibilities). Grok has become my go-to AI -- I personally find it better than (the free version at least) of ChatGPT, paid Gemini, and anything else -- though it does have a lot of problems.

I wish I could 'acquire' my house at a higher valuation and renegotiate financing terms :(

So he bought Twitter for $44bn 2.5 years ago and has run it so badly that even when his own company bails it out using made up figures the best he can do is $33bn. Embarrassing. It's not much more than a pyramid scheme.

How is that legal? Could he also decide to sell a Bic pen he personally owns to XAI for 100 billion dollars? What's the line? Do you need to be able to convince a judge you truly believe it's worth that?

It's this maybe merely a financial move that makes sense in the world of ultra-rich people and banks?

I read somewhere that he used his tesla assets as a security to get a loan to buy X and this provides some buffer or sticks it to someone else in case tesla goes down?

I can't quite put my finger on it, as I'm no financial type, but this almost reeks of fraud or self-dealing. Wasn't X valued at something like 16 billion? What's that $33B in stock for?

I own a pair of pants, and it's valued at $200B. I wear them while strolling through my $1T city, and browsing billion-MAU websites.

You can buy them or not—that’s up to you. But the valuation? $200B - official.

"In Philadelphia, it's worth 50 bucks."

https://www.youtube.com/watch?v=uYlOIKtYsos

Can we get valued changed to "valued"?

I just paid my wife $2.5 million to acquire our 1999 Saturn S-Series. Absolute classic car if anyone wants to buy it. I'll sell it for a clean $3 million.

Does anyone know who xAI's board of directors is now? I can't find reliable information online but it appears to be very small, maybe just two people (one of whom is Musk.)

This feels like letting rich people print their own currency.

As a reminder, the people who held X's debt had written down the company's value to less than $10 billion. So selling your company to yourself for $45 billion dollars is hilarious chicanery.

Musk used his extremely overvalued company to bail out his other way overvalued company that he ran into the ground. It's a thinly-veiled, self dealing ponzi scheme. (It also echos the final fate of Solar City).

The bots on X are built into it now? So influence crowds by diametral extreme positions in an automated manner is a nobrainer now.

Stocks were down in a big way today and this signals that they're expecting a bloody Monday.

For almost every purchase I make, I have to pay a hefty tax to the state. I wonder how much taxes xAI is going to have to pay for this?

I see many people hating Musk too much for political reasons. The same people are pretty convinced that he does not know how to conduct business, that he is operating at a loss and he will tank every business he is involved in.

If that is the case, why don't this people put their money where their mouth is and invest everything they have in shorting Musk owned stocks like Tesla, SpaceX, xAI? They might have the chance to see their dream come true and Musk go broke and homeless.

Valued by who? I have a overvalued company I'll buy with another overvalued company. This should be illegal, but it's a house of cards.

When all is said and done, did the banks that helped finance Musk's original acquisition of Twitter get their money back?

How can xAI be valued at $80B. (Aka Who is dumb enough to purchase it at that price?)

What a sham of a person, companies, and legal and financial system.

How does a loser from South Africa, who has been kicked out of nearly every company, obtain this? Perhaps this is what every loser in America dreams about themselves being able to do.

The Economist is pessimistic

https://archive.ph/XkmDi

Ah yes. Now we know why those articles about X's valuation resurgence have been coming out lately. He "rescued the value" by selling it to another company he owns.

Look, maybe the Twitter dataset and control over the algorithm is worth $45 billion. But I've seen the state of ads on Twitter these days and it is clearly not worth anything close to that from advertising income.

Am I misunderstanding or is this using non-actualised gains to buy actual things? What are the tax implications of this?

Can someone please explain this with more words?

The real important question is: why? And why now?

It's funny to me that ycombinator is basically reddit now, it's nearly 100% Elon hate, calling him a Nazi, etc. I get hating him but he literally just had a child with a Jewish woman, and as far as I know hasn't funded any gas chambers.

> xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent.

Wow

> Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world

Am i behind the moon because i haven't heard of xAI?

Solar City and Tesla saga

And people said Twitter was a bad investment

Happy to see xAI succeed and its fate being intertwined with X. Some paths to ultimate success for the greater good don't take the straightest ways

This is the kind of crap we learned about when studying the "Robber Baron" era in the US public school system. Well, I mean, we were _supposed_ to learn it - evidently a lot of folks did not.

Are some taxes due for this "sale"?

Banger. Truly excellent trolling

"Yup, I'm erasing my debts now. Woosh! And now I'm doubling my money!" it's like watching a kid playing with plastic toys.

xAI's mission is to "understand the universe". Not sure how that aligns with X.

An also runs acquired an also ran.

I for one hope this all ends really, really badly for him and his backers.

Soon Tesla will buy xAI!

xAI is never going to be profitable.

Is our boy getting margin called from his Tesla stakes ?

Must be the most expensive botnet in human history

I see a parallel in him and Trump that they artificially inflate the value of the things they own and get frequently away with it because they're just rich.

I believe musk to be a fool and this reinforces that belief. It should not have taken him 3 years to realize that the value of Twitter was the hot and cold running stream of conversational data.

So, what does this actually mean?

how can this happen??? I thought xAI is subsidiary

Got to keep the grift going.

> X is the digital town square where more than 600M active users go to find the real-time source of ground truth

Lol

Now it is under xAI, could X be rebranded into Twitter again please.

Enron Musk.

wow i forgot about how dumb x was . now we xai ... so what .

The fact that Elon Musk panicked and sold X to xAI means that he is believes Tesla stock, which backed the original X deal, is weak and will fall. It's a very bearish signal for TSLA.

This is highly speculative, but I've been comparing responses from five different AI models lately, including ChatGPT and Grok, and I've noticed something odd: The similarities in phrasing, structure, and political tone between ChatGPT and Grok are striking — much closer than you’d expect from two "rival" companies.

That led me down a rabbit hole, and here’s my working theory:

Despite the public feud between Sam Altman and Elon Musk, I believe OpenAI and xAI are quietly collaborating behind the scenes. Specifically, I suspect Grok is either running OpenAI-derived models or sharing infrastructure, and in return, OpenAI is gaining access to Musk’s massive data/compute resources via xAI and X (formerly Twitter).

Supporting points:

Microsoft is stepping away — They were OpenAI’s primary compute partner but have started signaling they’ll use other providers.

Grok’s rapid development — It came online way faster than would be realistic for a startup AI lab with no prior foundation.

Massive hardware investment by xAI — If OpenAI was looking for non-Microsoft compute, xAI could quietly be the supplier.

Grok's API being compatible with OpenAI’s SDK — suggests architectural overlap.

Recent political shift in ChatGPT’s answers — The model's tone has become more "centrist" or Musk-adjacent in the past year.

And now — Musk just merged X and xAI, combining their compute, data, and models into one company. That move erases corporate barriers and would make a quiet collaboration much easier to conceal.

Why keep it secret? Because the brands are oil and water: OpenAI is publicly "woke"; Musk is toxic in mainstream circles. If users knew Grok was OpenAI-powered, Musk’s fan base would revolt. If OpenAI users knew they were working with Musk, the backlash would be massive.

It’s just a theory, but the pieces fit too well for me to ignore.

Curious if anyone else has noticed this or has data points to support or refute it.

what

Another masterclass stroke from Musk.

I get a kick out of how the link in this story is "twitter.com" instead of "x.com".

Personally, I think everyone should just continue to say "Twitter."

Kudos for the exit, Elon! /s

Does this dork think the entire world is that dumb?

Hillarious. He wrote his own press release to pretend like he didn't just buy his privately held company using his publicly held company shares.

He's an idiot but I'll give him some credit, he just dumped a bunch if shares at their inflated value before they could drop even more. The guys he conned into buying Twitter with him won't have a reason to seek revenge now, and he can make whatever bullshit claims about the value if X he wants, since it's a private sale.

He did roughly the same thing with Telsa acquiring Solar Winds. Musk's Net worth is smoke and mirrors.

"This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress"

You get to pick winners AND be protected by section 230 of the Communications Decency Act from liability for anything said on the platform.

Stockholder privacy is protected by law; they could be Russian, Saudi, Chinese, North Korean crypto-currency hackers; CIA; friends of friends, mom and pop, whomever.

X algorithms and work practices are protected by trade secrets, confidentiality agreements, and binding arbitration.

Even superpower-nation security services are deeply dependent on the willing participation of the telecommunications industry. They would be blind to a unwilling provider, particularly one with their own worldwide network.

Don't blame Elon Musk. We built this system. "If you build it, they will come."

(Edit: I acknowledge the downvote and normally delete if/since judged not helpful. But I would appreciate it if the flaws were pointed out explicitly: a category mistake in ascribing personal responsibility for collective effects? assuming the worst, or fear-mongering? just hyperventilating? I honestly don't want to waste anyone's time. I thought pointing out that legal protections necessary for companies could be so abused would stimulate the policy-minded.)

no thanks

and i value myself at a hundred billion trillion