Elon Musk said on Friday that he had sold X, his social media company, Xai, his launch of artificial intelligence, in an unusual arrangement that shows financial maneuvering inside the business empire of the richest man in the world.
The All-Stock Agreement appreciated the XAI to $ 80 billion to $ 33 billion, Mr. Musk said at the price of X. X dropped from $ 44 billion that Musk had paid for social media in 2022, but more than $ 12 billion that some X investors recently assigned. The last XAI award, in the December round of funds, was about $ 40 billion.
Both companies are privately held and already share significant sources such as engineers. Chatbot called Grok, manufactured by XAI, is trained for data published by X -user and is available in X. Bankers for X told investors that some of the social media incomes come from XAI.
Mr. Musk wrote in his post that “Futures Xai and X are interconnected.”
“Today,” he said, “we officially take a step towards combining data, models, calculation, distribution and talent.” He added: “The combined company will provide a smarter and more meaningful experience of billions of people, and at the same time will remain faithful to our main mission to seek the truth and develop knowledge.”
The agreement shows how Mr. Musk can play with different parts of his business empire. In this case, he composed a company that lost value, X, into a company that gained value, XAI. Mr. Musk performed a similar maneuver in 2016 when he used his shares of his company Electric Car Company Tesla to buy Solarcity, a pure energy company, where he was the largest shareholder and his cousin Lyndon Rive was the CEO.
While Tesla is a publicly traded company that has to publish their finances and other information to shareholders, most of Mr. Muska are privately held and more opaque. These include SpaceX missiles; boring company, start tunnel; and neuralink, society for the brain interface. Mr. Musk often moves resources and employees between his companies, defies traditional business standards and runs his different companies as one big Musk Enterprise.
Linda Yaccarino, CEO X, wrote about X agreement: “The future could not be clearer.” X refused to comment.
Other executives who control more companies earned in this position by creating cross pollinating emphales, experts said. For years, Eddie Lamert, billionaire of the hedge fund, has been using the valuable property he owned to support Sears, his fighting retail business.
But the IS of this precedent excels in the version of Mr. Musk, said Andrew Verstein, professor at UCLA School of Law.
“It seems that the Elon version really says: I have a company – maybe not bankruptcy, just not my crown gem,” Mr. Verstein said. “I will buy it in a way that will look like success with one of my other companies.”
X and XAI were on various trajectories. X is much more well -known, and Mr. Musk used it as a battle of RAM to develop his political views, a campaign on the President Trump platform, and the flogging of support for his efforts to reduce costs, known as the Ministry of Government Efficiency.
But the financial outlook X has fallen since Mr. Musk has fallen. Most of the web revenue comes from advertising, but the brands will spend on X, because Mr. Musk caused controversy and threw the rules for moderating content in favor of more atmosphere.
In December, the X award dropped to $ 12 billion, according to Fidelity, one of the investors who participated in the acquisition of Mr. Musk.
While some advertisers recently returned to X, they hoped to become kindness when Mr. Musk became a close advisor to Mr. Trump, the company still has to gain financial stability. In January, Mr. Musk told employees that the income was “bland” and that the company “barely broke”.
This month, X continued to intervene its revenue goals, according to the internal e -mail that saw the New York Times. Since 3 March, X X has served $ 91 million this year from ads, the report said significantly under the first quarter of $ 153 million.
“The time to sprint at the finish line is now,” said e -mail, urging the seller to raise the pace.
On the other hand, XAI grew rapidly. In December, AI raised $ 6 billion from investors and appreciated it to $ 35 billion to $ 40 billion, $ 24 billion in May.
The company also postponed the roots in Memphis, where Mr. Musk has built what he says will be the largest supercomputer in the world.
Mr. Musk founded XAI in 2023 to compete with OpenAi, AI laboratory he co -founded, and it does Chatgpt. Mr. Musk left Openi in 2018 and has sued society since then and offered it to obtain it, claiming that only he can responsibly create AI that would destroy humanity.
(The Times sued Openi and his partner, Microsoft, in December 2023 for violating copyrights on the content of intelligence related to AI systems. Openai and Microsoft have claimed.)
Last month, bankers X indulged a large part of the company’s debt, which was a task they considered almost impossible before Mr. Trump’s inauguration. Investors who purchased debt have been said to have improved X -Company’s revenues, partly because XAI paid X for the license of its data and basically ceased funds from one of Mr. Musk’s companies to another.
Given the symbiotic relationship between X and XAI, investors in societies can welcome the transaction, said Eric Talley, professor at Columbia Law School.
“The cook may have been in a position to play quickly and relaxed, steal the ingredients from one and gave them the other and vice versa,” Mr. Talley said. “You didn’t know if you were at the end or the receiving end.”
In some ways, the agreement solves this problem. “Now that everything is together in the same pot, it’s all just mixed,” Mr. Talley said.
However, investors’ satisfaction will depend on how many shares in the new X investors will receive in exchange for their shares.
“If it turns out that the exchange conditions are such that they really stacked the deck in favor of one version of the other, you probably feel that you have a shaft,” Mr. Talley said.
The report on Friday’s Agreement was celebrated inside X.
“It’s an extremely exciting step for all of us,” wrote Mrs. Yaccarino E -mail to the employees who saw The Times.
Ryan Mac contributed by reporting.
