When Elon Musk announced that the start of AI, Xai, had acquired the Social Media Social Information Company, X (formerly known as Twitter), in an All-Stock agreement, he set some eyebrows. But in many ways, the agreement made sense. Xai’s Chatbot, Grok, was already deeply integrated with x, X was eating financiallyAnd Musk needed a way to make the $ 44 billion Twitter look less like a impulsive redemption and more like a strategic game for AGI’s dominance.
It also points out something deeper on how the Musk Empire works: investing in any of its companies is not about the rapid performance of the investment. It is the market for mysticism around the calf and the ingestion of the entire narrative of success that goes beyond real numbers.
Some call it a chafeshowing Musk’s story about excessive production and degraded. But the market is increasingly tolerant-tolerate, even narrative investment, especially when the thread connecting the story together is one of the right men of the president.
“All Elon companies today are basically a company,” said Yoni Rechtman, Mr. Slow Ventures, in TechCrunch. “It’s all already Elon, Inc. There are people working in many companies at the same time. They share a capital connection web. They work together and treat them all effectively as a company. [the xAI-X merger] It just ends some of the fiction that the two businesses were separate. ”
Thinking between Musk Bulls such as Ron Baron, the founder of Baron Capital Investment Management Company, is that “Every thing [Musk] Helps anything else it does ”, like Baron made it. Other businesses under the control of Musk include Tesla, SpaceX, Boring Company and Neuralink – some of which Reportedly.
“When [Musk] He bought twitter, did he have in mind that there was the opportunity to have this data, a huge value for licensing? When he decided he wanted to go to Mars with SpaceX, he really thought there was a real opportunity here for the internet around the world and there would be hundreds of billions of dollars of revenue opportunities? When he started with EVS for Tesla, he really thought that this would be merged into self-guidance, where you can make hundreds of billions of dollars per year extra profits […] And you will have cars log in around the world? […] All these businesses are connected. It’s the ecosystem. It’s the elon ecosystem, and I think it’s really interesting when you look at it. ”
Baron Capital has invested in the Musk ecosystem, an example of the investor crossover among the various billionaire companies. Businesses such as 8VC, Andreessen Horowitz, DFJ Growth, Fidelity Investments, Manhattan Venture’s partners, Saudi Arabia’s PIF, Sequoia Capital, Vy Capital and others also hold positions throughout the corporate web of Musk.
This brings us back to the XAI-X deal. Experts have questioned the way in which acquisition could estimate X at $ 33 billion, more than its triple estimate just a few months ago and how Xai could estimate at $ 80 billion taking into account AI company referenced It has no minimum income. But the valuations are not always based on what exists today. On the contrary, they take into account what investors hope – and this is especially true when it comes to Musk businesses.
Just look at Tesla. The electric vehicle manufacturer has been treated as a technological stock for years, despite having a car industry, largely based on the belief that Tesla will unlock an innovative autonomy day in the form of self-guidance and humanoid robots.
‘The reason why [Tesla’s] The 80 -fold brokerage transactions and the Comp Group negotiates 25 times the profits are that people make a bet in the long run and this is not what is happening with the numbers this year, “said Gene Munster, Managing Director of Deepwater Asset Management.
Munster has invested in X, XAI and Tesla. It is precisely the type of all-in musk Backer that is to benefit more than an agreement such as XAi by buying X, assuming that Musk can actually achieve his promise to marry his real-time Data Platform and Distribution Platform with XAI’s infrastructure and know-how.
Of course, consolidated value also comes with increased risk.
Dan Wang, a professor at the Columbia Business School, whose research lies at the intersection of business and society, told TechCrunch that the largest direct risk factor for investors is the continuing lawsuit facing X by the Securities and Exchange Commission (SEC). The suit accuses Musk of misleading investors, delaying the revelation of his previous investments on Twitter. The Securities and Exchange Commission has argued that this allowed Musk to buy more shares on Twitter at artificially low prices.
Wang listed some other risk estimates, such as reactive and concerns about privacy, especially in the way X chose all users in the AI model data collection. The change Opt-in has already increased the rage of a regulatory regulator, Ireland’s DPC, which has recently begun investigating it as a possible violation of Europe’s GDPR law.
“Another kind of danger here is that there is no consensus framework for how the AI market will be regulated, but you already see traces of it in Europe and until recently in California,” Wang said. “Many of these frames have to do with the way in which AI models are developing in terms of information distribution […] They attribute responsibility to companies that create AI models as well as access to these models. ”
Musk can also simply lose interest in a project, Rechtman said.
“I think this is where many Tesla shareholders are feeling right now,” he said, “where for recent months, Elon’s first company was Trump’s campaign and his other projects have faded.”
When asked about some of these risk factors, Munster appeared not rich. He suggested that he was insignificant given the enormous huge proposition of XAI’s proposal and capabilities to become a dominant player at AI.
“We bet the business with the belief that AI will be more transformative than people think,” he said. ‘What is the value […] One of the four brains that people are going to run? ”
Rechtman said that the Musk Bulls are not blindly faithful, per se, but they simply trust Musk’s superpower to “bend the capital markets in his will in a way that allows him to do things and build businesses that no one else can.
“People in these businesses have just passed a long Elon, and will continue to go long Elon,” Rechtman said. “So it’s not surprising to me that they will continue to tell you that the emperor is wearing clothes.”
Not for anything, the market for Musk’s most speculative bets, such as X, is a way to unlock more investment opportunities in Muskverse, Rechtman said.
“Spacex is a real thing and it will never become public,” he said. “So the only way to invest in SpaceX is to access bids and the only way to access the bids is to be at Elon’s good grace.”
