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What is the play here? Using money invested in xAI and its inflated valuation to bail out the X investors?
That and the data that is a part of X can be used by the xAI team. I expect it will be in the TOS if it isn't there already. "xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent."
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.
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?
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.
And then will leverage against that valuation for loans, acquisitions, etc. Self dealing. Nobody cares anymore.
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Company directors are generally given wide latitude in what they can do without breaching fiduciary duty, so such lawsuits were always going to be an uphill battle.
An acquisition is a special case (for the company being acquired) and the scrutiny is somewhat higher. At least in Delaware. I have no idea what corporate law is like in Texas.
Nobody does, really. Texas is relatively new to its 'corporate registration friendly' game, and at least on paper the statutory law is the same. Texas courts don't have to follow Delaware's case history, but it's also not a given that they will rule in a vastly more owner-friendly manner.
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Sam owns Reddit and OpenAI.. how is that new? Google also owns Gmail and all Google Services , as well as its AI.
OpenAI does not own a social network. Google doesn't even own a social network anymore. Neither are valid comparisons to xAI owning X.
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.
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That military apparatus is sworn to uphold the Constitution, not support the current president.
From what I have been told (specific to the US army): - Enlisted swear oaths to the constitution and President - Officers swear an oath to the constitution I’ve only been told this, I don’t claim to know.
- enlisted: https://www.army.mil/values/oath.html
> I, _____, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to regulations and the Uniform Code of Military Justice. So help me God. (Title 10, US Code; Act of 5 May 1960 replacing the wording first adopted in 1789, with amendment effective 5 October 1962).
- officers: https://www.army.mil/values/officers.html
> I ___, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God. (Title 5 U.S. Code 3331, an individual, except the President, elected or appointed to an office of honor or profit in the civil service or uniformed services)
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> Even a sliver of that capability and influence ensures nobody will ever dare to try and slap some cuffs on him After 2028 elections, all of that umbrella cover will go away. Optimistically speaking it could happen as soon as after Nov of 2026 (midterms).
> Optimistically speaking it could happen as soon as after Nov of 2026 (midterms). The midterms could have some meaningful effect a lot sooner than that if we start seeing across-the-board primary challenges of pro-Trump Republicans. Of course, all of this is assuming that the broad Republican constituency have to some extent gone anti-Trump, and I really don't know how much basis there is for that assumption.
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 se…
If I were an investor in xAI I would be furious about this. They're almost certainly overpaying for Twitter and there's definitely going to be litigation.
Edit: It sounds like the combined entity is taking on Twitter's $12 billion of debt from when it originally went private. As of last December xAI had raised "more than $12 billion" in total [1], so the deal attaches Twitter's debt to that ~12 billion pot of VC money. Unless I'm really misunderstanding something this deal looks like a bailout of Twitter and a huge new liability for xAI.
It's definitely possible my hot take is wrong and the xAI investors support the transaction. I hope so because if not there's going to be some brutal lawsuits over this.
[1] https://www.nytimes.com/2024/12/24/technology/elon-musk-xai-...