NEWSLETTER
Elon Musk said Friday that he had sold x, his social media company, XAI, his artificial intelligence company, in an unusual agreement that shows the financial maneuvers within the commercial empire of the richest man in the world.
The agreement of the entire stock valued XAI at $ 80 billion YXA $ 33 billion, Musk said about the price of x. x was below the $ 44 billion that Mr. Musk paid for the social media company in 2022, but higher than the valuation of $ 12 billion than some of the investors of x have recently assigned. The last XAI assessment, in a December fundraising round, was approximately $ 40 billion.
Both companies have a private property and already share significant resources, such as engineers. A chatbot named Grok, made by XAI, is trained in the data published by the users of x and is available in x. Last month, x bankers told investors that some of the income of the social media company come from XAI.
Mr. Musk wrote in his publication that “the futures of Xai and x are intertwined.”
“Today,” he said, “we officially take the step to combine the data, models, calculators, distribution and talent.” He added: “The combined company will deliver more intelligent and significant experiences to billions of people while staying faithful to our main mission to seek truth and advance knowledge.”
The agreement shows how Mr. Musk can play with different parts of his commercial empire. In this case, he folded a company that has been losing value, x, in one that has been gaining value, Xai. Mr. Musk made a similar maneuver in 2016 when he used shares of his electric car company, Tesla, to buy Solarcy, a clean energy company where he was the largest shareholder and his cousin Lyndon Rive was executive director.
While Tesla is a company that lies in the stock market that must reveal their finances and other information to the shareholders, most Mr. Musk's companies have a private and more opaque property. Those include the Spacex rocket manufacturer; The Boring Company, a new tunnel company; and Neuralink, a brain interface company. Mr. Musk often moves resources and employees among its companies, challenging traditional commercial standards and operating its various companies as a large Musk company.
Linda Yaccarino, executive director of x, wrote in x of the agreement: “The future could not be brighter.” x declined to comment.
Other executives who control multiple companies have taken advantage of that position by creating cross pollination empires, experts said. For years, Eddie Lampert, the billionaire of the coverage fund, used the valuable real estate she owned to prop up Sears, her retail company with difficulties.
But even with that precedent, Mr. Musk's version stands out, said Andrew Verstein, professor at the UCLA Law Faculty.
“Elon's version really seems to say: I have a company, maybe not in bankruptcy, but not my crown jewel,” Verstein said. “I will buy it in a way that makes it look like a success using one of my other companies.”
x and XAI have been in different trajectories. x is much better known, and Musk has used it as an ram to advance in his political views, campaigning on the platform for President Trump and beating support for his governmental reduction of cost reduction, known as the government's efficiency department.
But x's financial perspective has decreased since Mr. Musk bought the company. Most of the income of the site comes from advertising, but the brands have been captivated in x in x, since Musk has courted the controversy and has expelled the company's content moderation rules in favor of a more welcoming atmosphere.
The x assessment collapsed to $ 12 billion in December, according to Fidelity, one of the investors who participated in the acquisition of Mr. Musk.
While some advertisers have recently returned to x, with the hope of Curry in favor of Musk became a nearby advisor to Mr. Trump, the company has not yet recovered financial stability. In January, Mr. Musk told employees that the income was “little impressive” and that the company was barely reaching a balance point. “
This month, x continued to fight to achieve its income goals, according to an internal email seen by the New York Times. As of March 3, x had served $ 91 million ads this year, according to the message, well below its objective of the first quarter of $ 153 million.
“The time to run to the finish line is now,” said the email, urging sellers to accelerate the rhythm.
In contrast, Xai has grown rapidly. The new company of ai raised $ 6 billion of investors in December, valuing it at $ 35 billion at $ 40 billion, compared to $ 24 billion in May.
The company has also left roots in Memphis, where Mr. Musk has built what he says will be the largest supercomputer in the world.
Mr. Musk began XAI in 2023 to compete with Openai, the laboratory of ai that co -founded and that makes Chatgpt. Mr. Musk left Openai in 2018 and since then has sued the company and offered to acquire it, arguing that only he can create ai in a responsible way that humanity does not destroy.
(The Times sued Openai and his partner, Microsoft, in December 2023 for the infraction of the copyright of the news content related to the ai systems. OpenAI and Microsoft have denied the statements).
Last month, x bankers sold much of the company's debt, a task they had seen almost impossible before Trump's possession. Investors who bought the debt were told that x's income had improved, partly because Xai was paying x to license their data, essentially channeling funds from one of Mr. Musk's companies to the other.
Given the symbiotic relationship between x and XAI, investors in companies can welcome the transaction, said Eric Talley, professor at the Columbia Law Faculty.
“The cook was possibly in a position to play fast and loose, stealing ingredients from one and giving the other and vice versa,” Talley said. “You didn't know if you were at the point of giving or at the end of that.”
The deal, somehow, solves that problem. “Now that everything is together in the same pot, everything is moving together,” Talley said.
But investor satisfaction will depend on how many shares in the new company x investors obtain in exchange for their shares.
“If it turns out that the terms of exchange are such that they really stacked the deck in favor of one in front of the other, you probably feel that you got the axis,” Talley said.
The news of the Friday agreement was held within x.
“This is an extremely exciting step for all of us,” Mrs. Yaccarino wrote in an email to employees that was seen by The Times.
Ryan Mac Contributed reports.
(Tagstotranslate) x (previously twitter)
