Tesla’s decline forces Elon Musk to sell X… to xAI

Elon Musk has revealed on X that he has sold his social network X (formerly Twitter) to his artificial intelligence company xAI. Although the exact amount of the transaction has not been officially disclosed, Musk specified that this operation values xAI at 80 billion dollars and X at 33 billion dollars (which is 45 billion minus 12 billion in debt).

Musk explained that this sale was intended to strengthen the synergies between X and its artificial intelligence projects via xAI. According to him, this approach would allow xAI to better utilize X’s data to improve its AI technologies.

Elon Musk had bought Twitter in 2022 for around 44 billion dollars, with the goal of transforming the platform into a multifunctional ‘super-app’, where freedom of speech would be at the heart of exchanges. However, the management of X by the billionaire has been marred by numerous controversies.

The purchase of Twitter was largely financed by loans, with Tesla stocks as collateral. Musk borrowed money from several banks, including Morgan Stanley, while putting up a large portion of his Tesla stocks as security for the transaction.

The guarantee for this loan was based on Tesla stocks, a strategic choice for Musk, who held a large quantity of these stocks. However, the decline in Tesla’s value threatened this guarantee, putting Musk in a vulnerable position with regard to the banks that had lent money for the purchase of Twitter.

Tesla’s stock has recently experienced a significant decline, in part due to Musk’s controversial involvement in politics and some of his behavior, including an apparent Nazi salute performed twice in front of a crowd celebrating Donald Trump’s inauguration.

Although Musk denied this gesture, filmed live, it sparked harsh global criticisms, tarnishing the company’s image and leading to a rapid decline in Tesla’s stock, thus reducing investor confidence.

In addition to the global protests against the billionaire, his controversial actions and provocative attitude in American politics, such as his arrival on stage with a chainsaw to celebrate mass layoffs, have made Musk one of the most hated personalities in the United States.

In a recent interview, Musk stated that the worst enemy of the West was empathy, a statement that shocked many people. 

This statement seems to illustrate his disconnected vision of public concerns, especially in the face of massive cuts he seeks to impose on the government, while receiving billions of dollars in public money for his various businesses.

The billionaire, who presents himself as a staunch defender of freedom of expression, expressed his frustration towards those who publicly rejoice at the fall of Tesla’s stocks. He seems to be questioning the lack of… empathy in the face of his difficulties, claiming that he has only done positive things.