{"id":10388,"date":"2025-03-29T09:04:39","date_gmt":"2025-03-29T08:04:39","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=10388"},"modified":"2025-03-29T09:04:39","modified_gmt":"2025-03-29T08:04:39","slug":"elon-musks-x-sale-to-xai-adds-intrigue-to-fraud-lawsuit","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/29\/elon-musks-x-sale-to-xai-adds-intrigue-to-fraud-lawsuit\/","title":{"rendered":"Elon Musk\u2019s X Sale to xAI Adds Intrigue to Fraud Lawsuit"},"content":{"rendered":"

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Billionaire mogul Elon Musk has transferred his social media service X to his AI venture xAI, igniting debate as it aligns with a US judge denying his request to dismiss a lawsuit related to that platform.<\/p>\n

The handover of X\u2019s ownership to xAI on March 28 implies that the class-action lawsuit against Musk \u2014 accusing him of deceiving previous Twitter shareholders<\/a> by postponing the announcement of his initial stake in the social media service \u2014 has become \u201ca lot more intense,\u201d Cinneamhain Ventures partner Adam Cochran remarked<\/a> in a post on X on March 28.<\/p>\n

Acquisition could expose xAI to greater \u201crisk\u201d<\/h2>\n

On the very day that Musk announced<\/a> \u201cxAI has taken ownership of X in an all-stock deal,\u201d a US judge reportedly<\/a> dismissed Musk\u2019s efforts to dismiss the lawsuit. Cochran commented that it has \u201copened up his AI organization to risk here as well, and it\u2019s a much larger opportunity.\u201d<\/p>\n

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Source: <\/em>Grok<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

Musk stated the agreement evaluates xAI at $80 billion and X at $33 billion, inclusive of $12 billion in debts from the $45 billion assessment. He initially purchased X, previously known as Twitter, for around $44 billion in April 2022<\/a>.<\/p>\n

\u201cThe futures of xAI and X are closely linked. Today, we officially move forward to integrate the data, models, computing power, distribution, and talent,\u201d Musk stated.<\/p>\n

\"Twitter,
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Source: <\/em>Bryan Rosenblatt<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

\u201cThis merger will unleash tremendous potential by merging xAI\u2019s cutting-edge AI capabilities and skills with X\u2019s extensive reach,\u201d he added:<\/p>\n

\u201cThis will enable us to construct a platform that not only mirrors reality but actively propels human advancement.\u201d<\/p><\/blockquote>\n

Nevertheless, Cochran asserted that \u201cMusk leveraged his inflated xAI stock to pay significantly above value for X, while still incurring an $11B deficit on the deal.\u201d He stated that Musk is \u201cdeceiving xAI stakeholders and X stakeholders\u201d and was positioned to sell user information to xAI.<\/p>\n

Related: <\/strong><\/em>Elon Musk\u2019s \u2018efficiency\u2019 initiative targets SEC \u2014 Report<\/strong><\/em><\/a><\/p>\n

xAI is predominantly known for its AI chatbot “Grok,” which is integrated into the X platform. When Musk introduced it in November 2023, he proclaimed it could surpass OpenAI\u2019s initial iteration of ChatGPT in numerous academic evaluations<\/a>.<\/p>\n

\"Twitter,
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Source: <\/em>Raoul Pal<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

Musk clarified at that moment that the impetus behind developing Grok was to establish AI tools capable of aiding humanity by fostering research and innovation.<\/p>\n

While Cochran described Grok\u2019s valuation at $80 billion as an \u201cabsurdly ridiculous valuation,\u201d crypto developer \u201cKeef\u201d held a contrary view. Keef remarked<\/a>, \u201cThis seems suspicious all around, but considering the circumstances, Grok is arguably the leading model for various tasks.\u201d<\/p>\n

Magazine: <\/strong><\/em>Arbitrum co-founder doubtful about shift to based and native rollups: Steven Goldfeder<\/strong><\/em><\/a><\/p>\n