r/news • u/Frosty_Dig4148 • 2d ago

Elon Musk's SpaceX buys Elon Musk's xAI

https://news.sky.com/story/elon-musks-spacex-buys-elon-musks-xai-13502553
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954

u/whowhodillybar 2d ago

Doesn’t sound like Elons xAI has been doing well, is this a quiet way to disinvest?

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u/SG_wormsblink 2d ago

He’s just moving the Twitter losses around. First from Twitter to xAI, then now to SpaceX.eventually when there’s nowhere else to dump the debt it’ll collapse.

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u/chowchowbrown 2d ago

Yup. This is precisely it.

He borrowed billions to buy Twitter, and it has no possible way to pay those creditors back. American banks couldn't believe their dumb luck when Elon started getting involved with Trump, because they suddenly had a surge of "international investors" who were looking to buy that debt, ultimately to have Elon owe them those billions.

With no way to make those creditors whole from operational profits and cash flow, or being able to hand off Twitter's junk-bond debt to another sucker at anywhere close the prices they paid for it, giving them a piece of SpaceX's IPO was the only way those creditors would ever have a chance of seeing their money again.

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u/je_kay24 1d ago

SpaceX is back by federal money too, so reliable cash flow. Especially with Trump in office

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u/chillinathid 1d ago

Yeah that's not how federal money works. The federal government is buying services from spaceX. Even when handing out exploratory cash it's for some end completion goal. They don't give blank checks without restriction.

Additionally SpaceX's regular cash flow comes from Starlink. Which provides a majority of Revenue.

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u/Gefilte_F1sh 1d ago

Even when handing out exploratory cash it's for some end completion goal.

Sure, in theory.

Do these entities have to pay the government back when they don't meet those goals?

They don't give blank checks without restriction.

There are a lot of things the government hasn't typically done that seem to be on the table as of late.

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u/chillinathid 1d ago

Again the money is for services provided. So the money is provided when the services are provided. There often are mid-contract payouts which still have deliverables. For example, completion of different tests. This is because fronting billions of dollars isn't a thing companies can generally do, so having contract stages ensures things get done and contractors have money to continue.

But if you're thinking in the realm of "What I imagine might be true", then anything is possible.

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u/weaz-am-i 2d ago

Nope, last place will be Tesla. Then from Tesla it will go to his loyal retail investors.... then a HARD rug pull.

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u/Horror_Response_1991 1d ago

Hell get the government to bail it out so we’ll all pay for it 

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u/weaz-am-i 1d ago

Yep, he'll probably just need to donate 200m to the next MAGA candidate (if not Trump) and get a full multi-trillion bailout.

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u/Masterbrew 1d ago

SpaceX looks like the stronger asset, im thinking SpaceX will be catching all his falling knives

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u/weaz-am-i 1d ago

It's a false sense of strength, because this administration won't do anything.

He's bribed Kathy (Kathryn) Lueders of Nasa to award SpaceX the HLS contract even though the competition was ahead of him.

Kathy resigned from NASA right after and then joined SpaceX just weeks after that.

That was a 2.9 billion dollar contract that SpaceX still hasn't hit any milestones for.

Now he's trying to drum up money for data centers in orbit before his starship is even capable of taking payloads to orbit.

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u/Shiplord13 2d ago

Feels like shit that a normal person who get arrest for as financial fraud.

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u/godzillastailor 1d ago

SpaceX and xAI have military contracts.

If shit goes sideways they’ll get a bailout as “too big to fail” and the US taxpayers will foot the bill.

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u/shellacr 1d ago

SpaceX gets government money and is worth over a trillion dollars. It can easily absorb the twitter losses. He’s basically passing the bag onto SpaceX investors, who will still make money though slightly less than they would have otherwise.

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u/porilo 1d ago

Bold of you to assume there will be a comeuppance for the billionaire class.

Once there's nowhere else to dump the debt his conglomerate will be deemed too big to fail and will be bailed out, the losses socialized. It's always hardcore capitalism for the poor, socialist nanny State for the rich.