SpaceX in Merger Talks with xAI | Hacker News Reader

SpaceX in Merger Talks with xAI

reuters.com

88 pointsm-hodges74 comments

They both are privately held by the same owner! So, with whom are they talking? :-)

Two socks and two sets of googly eyes are required for this exercise. Attach googly eyes to socks. Insert hands in socks.

Now I'm imagining Musk in a k-hole just staring at his hands in sock puppets for hours.

But they don't have all the same owners. If I own company 2/3 of company A and it is worth $0, and I own 2/3 of company B I can't force company B to buy company A for $1. The company B shareholders will be upset and could sue.

Maybe this is a good deal for shareholders of SpaceX and xAI. But then maybe it isn't a good deal for one set of shareholders. I have no idea, but I would love to be a shareholder in SpaceX and would not want to be a shareholer in xAI. Totally depends on the price of course.

> Maybe this is a good deal for shareholders of SpaceX and xAI.

Yeah they would totally be doing this if they weren't in dire, desperate need of more money ... pinky promise.

Musk writes a letter from his ceo@spacex.com email and he reads it from his ceo@xai.com account. And viceversa.

The lawyers are the ones talking, and they have to come up with a fair valuation.

If SpaceX pays too much for it, other SpaceX shareholders have a case against SpaceX leadership. If xAI accepts an offer that is too low, other xAI shareholders have a case against xAI leadership. Given that the leadership is basically the same people, they are very well incentivized to come up with a valuation that is as fair as possible.

And this is not just theoretical, Musk has already been sued successfully once on a similar case, when his companies gave out too much free support to the boring company.

Otoh, he is clearly impulsive and doesn’t think the rules apply to him. I am guessing, if one approach benefits him personally the most, there will be enormous pressure to achieve that outcome.

Otoh, he is clearly impulsive and doesn’t think the rules apply to him.

They don't, so why shouldn't he think that way?

Tesla engineers being lent out right after the Twitter buyout to eval the codebase was one of many reasons I won’t work there. So unserious.

There are many valid complaints, but why is engineers working not a serious thing?

It’s “unserious” in the sense that it’s undisciplined. Don’t those engineers have things to do at Tesla, rather than going to poke around at a social media website codebase? If I were a Tesla shareholder I’d be pretty annoyed - how is doing so advancing making a better car?

I was imagining a boardroom reenactment of Geri's Game

https://en.wikipedia.org/wiki/Geri%27s_Game

Musk is the majority owner, but he is not the only owner. So the discussion is probably amongst senior leadership from both companies and probably involves other significant owners.

Elon talking to Musk.

"Have your Grok call my Grok!"

Is this an actual question? Because it seems kinda obvious that one person can have a majority stake in two companies without those companies being the same company.

The better question is whether or not this merger makes any sense.

I'd be quick to assume the ":-)" in this context indicates it is not an actual question.

He's really shuffling the X purchase debt around.

Probably in a desperate attempt to stall margin calls on the debt, which would cause him to have to sell his Tesla stock, which might start the freefall in stock price, creating a negative feedback loop and cratering his empire. See also the news about Tesla shifting manufacturing to robotics.

Yep, it's all just a shell game. He used xAI to move the Twitter debt so it couldn't be taken away for failure to pay debts. He's already been using SpaceX to buy Cybertrucks to prop ups sales and Tesla. Using SpaceX to generate revenue to pay off the xAI debts is just another step in the shell game.

What debt?

Most of the money to buy Twitter came from investors. They were not loans.

He took out $13 billion in loans.

He's not even vaguely close to getting margin called.

Not now, no, he shuffled it around. He was quite close beforehand, however.

> He used xAI to move the Twitter debt so it couldn't be taken away for failure to pay debts.

Exactly. I think it was obvious he was shifting the debt around when xAI merged w/ X right after xAI raised a large funding round and had cash in the bank (which it could use to pay down the X debt).

That makes zero sense. The loans he took out are personal loans. He can't shuffle those into the companies, and all the other purchase money came from investors not as debt.

Buying Twitter was a financially disastrous decision. It had reportedly lost at least 80% of its value [1]. The loans were secured against Tesla shares so there was the real risk of a margin call and a forced sell off.

And then along came xAI where a bunch of people gave Elon money and he "merged" Twitter and xAI, basically siphoning off billions of the investment funds ti bail himself out. If securities law had teeth, he probably should've gone to prison for this.

At the ssame time, why weer people giving this charlatan man-child billions to invest in AI?

The problem is they weren't buying AI. IMHO they were buying a seat at the table and an influence in the administration, a bit like the Saudi sovereign fund's "investment" in Jared Kushner.

Thing is, this isn't the first time he's done this. Elon used one of his companies (Tesla) to buy another of his companies (SolarCity) who was essentially insolvent but owed a lot of money to a third of Elon's companies (SpaceX). There was a lawsuit but it was dismissed. If you're sufficiently wealthy, the law basically doesn't apply to you [2].

I knew before even clicking on this that the justification would be orbital data centers (and it is). They make no sense becaus eof launch costs, cooling and cosmic rays and solar radiation.

Is this the continuation of the Twitter buyout shell game?

[1]: https://www.cnn.com/2024/10/02/business/elon-musk-twitter-x-...

[2]: https://www.bbc.com/news/world-us-canada-50695593

> Buying Twitter was a financially disastrous decision. It had reportedly lost at least 80% of its value [1]. The loans were secured against Tesla shares so there was the real risk of a margin call and a forced sell off.

No there wasn't any risk of a margin call he instantly leveraged Twitter to take on massive amounts of the debt itself. The purchase of Twitter was much more like a LBO than anything else.

> At the ssame time, why weer people giving this charlatan man-child billions to invest in AI?

Because he's basically got the midas touch as far as investors are concerned. His company don't even need to be "successful" for him to figure out some way to 10x their money.

> At the ssame time, why weer people giving this charlatan man-child billions to invest in AI?

The same reason Adam Neumann got another $350M They all know its a game and that game is prop up the valuations. They get rich off of the speculation and hype rather than the substance

He did acquired a lot of power and influence through it though. He can now shape and influence public discourse worldwide by pulling the algorithmic strings, amplifying information he likes and suppressing information he doesnt like.

Why would you pollute SpaceX’s valuation by coupling it with a toxic asset like xAi?

You don't have to spend long looking at Tesla's investors to realize they are exactly the kind of investors you want. You don't have to do anything but make promises, and when those promises fall through, just promise you'll deliver even more in the future.

> Why would you pollute SpaceX’s valuation by coupling it with a toxic asset like xAi?

SpaceX IPO will save the current xAI/Twitter bag holders

The scary people who lent the money to silence Twitter actually need paying one day. Lord knows you aren't doing that with any other product in the portfolio.

Favors can always be offered in lieu of payment. Preferential access to powerful friends or political candidates, a stock tip here and there....

It would take a tremendous amount of favors to cover $20B of loans.

save it from the ai bubble collapse?

> Last year, SpaceX agreed to invest $2 billion in xAI as part of the startup’s $5 billion equity fundraising, the Wall Street Journal reported at the time.

Sometimes you just need to get the founders in a room together to hash things out and magic can happen.

To be fair, it is no small feat to get all of Elon's personalities to agree with each other

I don’t understand the point of this stuff, Musk already has infinite money why does he need to play shenanigans with shuffling things between his various holdings?

He doesn't have infinite money, he is allowed to borrow infinite money thanks to the valuation of his holdings, which lately are weakening on the fundamentals.

Hence the shenanigans.

Some combination of never enough and the necessity of keeping the hot air balloon of his finances airborne.

I'm just waiting on the final merger with Tesla. The Tesla earnings release mentioned a big battery deal with xAI plus the previous Cybertruck deal with SpaceX so you know it's coming.

Musk has a lot of wealth, but to turn that into money he would have to sell his stock in his companies, causing him to lose majority ownership. Merging the money-losing xAI with the profitable SpaceX would allow him to use revenue from SpaceX to fund xAI without diluting his ownership.

to please one or another set of shareholders, to keep up his compensation, and to prop up bad decisions

Maybe he wants to go down in history as the first trillionaire. His wealth exploded during the pandemic, from about $25 billion to over $700 billion today. The trillion-dollar mark is in sight. He might be willing to sacrifice some long-term wealth if it means juicing the number now, so he has what seems like a permanent place in history.

> would give fresh momentum to SpaceX’s effort to launch data centers into orbit as Musk battles for supremacy in the rapidly escalating AI race against tech giants like Google, Meta and OpenAI.

Still haven't seen a successful PoC datacenter in orbit. If you own the rockets, maybe get that done tomorrow? I do assume your investors will want one working before they dump even more cash into the idea. But what do I know.

Imagine being site-engineer managing that infra...

Elon doing some financial engineering to engineer a 1T valuation for himself? :-D

> Reuters could not determine the value of the deal, its primary rationale, or its potential timing.

So, somehow, Twitter will end up being (partially) public again!

What are we doing here

This makes total sense his DC in Memphis will be his Houston. That DC will control all space flights and space robots.

This could happen without a merger

One c suite is much cheaper and easier to control then two. Reminds me of many reversed mergers in oil and gas.

A lot of people are getting very irate over this, but I think this is more or less fine. Everyone in these companies know perfectly well they're just part of the Elon Musk extended universe. He hasn't behaved like they're separate companies for quite some time. Was it a financially wise move for xAI to buy twitter? Well, no, but everyone in twitter was quite happy they got a price that was the same as the inflated original purchase price, so that was quite clear, and everyone involved in xAI is the Elon train so they've got nothing to complain about and if you squint the rationale of training data and distribution kind of makes sense. With SpaceX again, it's a private company, if they want to go along with Elon Musk's non-economic moves because they want to be onboard the Elon train? Sure, why not, they've followed him this far and he genuinely has delivered an incredibly ambitious feat with SpaceX.

I think the only exception is Tesla where it's a public company and Musk has an obligation to the shareholders, but honestly, this seems like it would be SpaceX bailing out Tesla & xAI, not the other way around.

I guess what I'm saying is "Who is actually invested in any of these Elon Musk ventures who isn't happy to give Musk a blank cheque to operate however he wants?"

Tesla invests $2B in xAI, SpaceX merges with xAI. It's just blatant self-dealing all the way down to artificially prop up valuations.

Isn’t this just a ‘rich’ person version of floating a bad check to cover last weeks payday loan?

Oh good, orbital rockets and simulated child porn under the same roof. I hate this timeline.

No roof! Everything is going to be orbiting! Whoooosh. :)

Elon in talks with Elon to save one of his broken companies

Are the talks just Elon with a sock puppet on each hand while Grok runs in the background doing the voices?

So Elon talking to Elon?

Sounds like schizophrenia.

> Deal would support Musk's plan to put data centers in space

What a load of absolute horseshit. At what point do people start opening their eyes?

Will one real/valuable company (SpaceX) be enough to save all the other grift company (X, xAI, Tesla) valuations?

> Will one real/valuable company (SpaceX) be enough to save all the other grift company (X, xAI, Tesla) valuations?

unstoppable force (spacex) meets immovable wall (twitter, xAI, tesla)

It’s a damn shame that SpaceX is being entangled with the absolute trash that is X and xAI.

grifters gonna grift

MechaHitler now has space launch capabilities

Elon Musk in negotiation with himself.

What does the process look like, exactly?

I'm not totally clear, but it probably involves the ol' stranger.

A lot of ketamine is involved.

You do whatever you feel like.

You get sued.

You drown the court in expensive lawyers.

Rinse. Wash. Repeat.

This makes sense based on his recent talk about putting solar powered AI data centers in space. I was expecting this announcement soon and it makes perfect sense if that's the goal.

https://www.wsj.com/tech/bezos-and-musk-race-to-bring-data-c...

https://www.nytimes.com/2026/01/01/technology/space-data-cen...

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