So get this, Elon Musk has officially merged xAI (his AI startup) and X (formerly known as Twitter, now known as “still hemorrhaging ad dollars”) into one glorious, Muskified Frankenstein. Translation: Funding secured LOL—If it hasn’t been evident before, it is now: This is Elon’s world and we’re just living in it. In short, the all-stock deal values xAI at $80 billion and X at $33 billion. Yes, that’s the same X he paid $44 billion for in 2022 before setting it on fire with a flamethrower made of layoffs, free speech (thank the lawd), and Grok memes. 

(Source: Giphy) 

But what in the actual hell is going on here? Well, xAI is now the parent. X is the acquired. And the justification is about as subtle as a Tesla Cybertruck in a Whole Foods parking lot: Musk wants exclusive access to one of the largest living, breathing, unfiltered data sets on the internet. Because when your AI chatbot is trying to “understand the true nature of the universe,” it helps if it’s been trained on 400 million people shilling their “FREE” newsletters, discords, or the next big memecoin in real time. 

Additionally, yes, it’s also about compute, scale, and “synergy”---but it’s more so about control. More specifically, more control over data, distribution, and dominance. Meaning, if OpenAI and Google are playing the AI chess game, Elon just flipped the board and built his own game (presumably Diablo). Which is why now, the combined entity—likely called something like “XAI Holdings” because branding is for cowards—is now worth over $100 billion (not counting debt). That’s right, a hundred billion-dollar juggernaut cobbled together from an AI startup launched in 2023 and a social network that’s been in a Wild Wild West since Elon took the reins. What a time to be alive. 

(Source: CNBC) 

What’s more, is that it’s starting to become clear as to why Musk has spent the better part of the last two years buddying up to the new administration, dropping $300 million into GOP pockets, and getting himself appointed as judge, jury, and executioner for federal jobs everywhere (read: DOGE). Simply put, he’s setting up regulatory insurance. And it could be the cheat code that lets him run roughshod over the kind of red tape that typically slows down companies trying to build natural gas-powered supercomputers in Memphis.

And before you ask, yes it’s a real thing. Colossus, the AI training facility xAI is building in Tennessee, already partially online, is powered by gas turbines and may soon have its own graywater facility. Translation: Elon’s about to be burning fossil fuels at scale next to a barbecue joint and a Cracker Barrel. ‘Merica, baby. 

(Source: Axios) 

Now to be fair, xAI is nothing to scoff at here. It’s already been valued at $50 billion in previous funding rounds, and Grok—the company’s flagship chatbot—is live inside X, spitting out answers with the chaotic energy of a Reddit thread and the confidence of a Robinhood trader who just piled his “BTFD” energy into Tesla calls. And with OpenAI closing in on a $260 billion valuation and Anthropic flirting with $60B, Musk clearly sees his window to take a swing.

But still, this is risky AF. The $33B valuation for X is… generous. That’s $11 billion less than what he paid, and that’s before factoring in the $12 billion in debt still hanging around its neck like a weighted blanket of bad decisions. And while the deal technically looks like a stock swap, it’s less “acquisition” and more “moving assets between pockets in the same hoodie.” Still though, the play is as follows: xAI gets exclusive data, a built-in user base, and a global megaphone. On the other hand, X gets a lifeline, a purpose, and maybe, finally, a reason to exist beyond dunking on brands. And finally, investors get to pretend this all makes sense because their LPs are too scared to admit otherwise.

(Source: Giphy) 

Elon’s endgame to all this? Total vertical integration of AI, data, compute, and distribution—all under the control of one guy who thinks blue checks are a personality trait and once named his child X Æ A-12. Boom, mic drop. Is it genius? Is it dangerous? Is it both? Absolutely, yes. But hey, that’s the Musk way. Meaning, keep your eyes on this girthy story, and place your bets accordingly, friends. Until next time… 

P.S. Just when you thought our beloved congressmen couldn’t get any greasier, one Republican lawmaker decided to YOLO $175k into a stock… right before a major FDIC announcement hit. Lucky timing? Insider edge? You be the judge. We broke it all down inside our recent Stocks.News premium article… click here to check it out ASAP. 

Stocks.News holds positions in Tesla as mentioned in the article.