Comment by paxys
13 hours ago
Tesla is still very profitable, as is SpaceX I assume. Twitter/X has been a $44 billion dollar failure, and xAI is a vanity project so Musk can go around saying he is a player in the AI space. Investors in both X and xAI need to be bailed out, hence this announcement.
Tesla has a P/E in the hundreds and a ~0.3% market cap to profit ratio. In what world is this "very" profitable?
In the world where it makes $8-10B in profit on $90-95 billion in revenue every year. Whatever price investors choose to trade the stock at is irrelevant to those numbers.
It's actually down to $3.8B in profit now, and will be losing money within a year at the rate its been losing profitability.
2% net return on assets is garbage
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The $44B Twitter/X buyout was not a failure. For example Fidelity has its $19M investment in the buyout - now xAI common shares - marked at $62M (up over 3X) as of 12/31/25. It was certainly valued even higher on 1/31/26 after xAI had an oversubcribed fund raise in January. All before this merger announcement.
The fact that it had to be successively bailed out by xAI (which itself was funded by Tesla) and now SpaceX shareholders is exactly what makes the acquisition a failure.
He spent other people's money (or maybe even imaginary money) he couldn't have used for himself (since selling off major stakes in your company is a big nono)
A "bailout" is when a company rescued from bankruptcy. Common equity holders take large losses or are wiped out. This did not happen here.
We also know the Twitter buyout debt was sold at near par before the merger with xAI which is inconsistent with being near bankruptcy.
> xAI had an oversubcribed fund raise in January
My understanding is that it was not oversubscribed and would not have closed without Tesla’s investment.
It was originally for $15B. They raised $20B of which $2B was from Tesla.
Your sources might be shady (Elektrek?).
I think its an effort to position SpaceX as an AI company in order to justify some ridiculous valuation at IPO.
I think it's more so that the upcoming new public shareholders of SpaceX bail out his X/xAI misadventure.
[dead]
Do you genuinely not think that "Elon" (xAI) is player in the AI space?
You don't have to think they have the best models of course, but they are clearly a very significant, and some might argue, leading player in the AI race.
> and some might argue, leading player in the AI race
What is this argument exactly? What are they leading?
It is a real model, real datacenters, and deployed heavily on their social media platform.
That's the full stack? Only other player that vertically setup is facebook, google and microsoft.
xAI’s models are really not pioneering at all. They weren’t the first to do MoE. Not the first to do open weighting, not the first to have memory or multi-modal vision.
So no, I wouldn’t say Elon is a major player in the AI space. People use his models because they are cheap and are willing to undress people’s photos.
saying they aren't pioneering is very different than saying they aren't a major player in the space. There're only like 5-7 players with a foundational model that they can serve at scale. xAI is one of them