Comment by rubyn00bie

Because X and xAI are both losing money. X needed cash to operate, so Elon rolled it into xAI to use xAI’s cash to help fund it. xAI is likely burning egregious amounts money, but will have trouble raising more capital. By rolling it into SpaceX he further covers up the financial issues because SpaceX is actually profitable. He can then raise more capital without having to worry (for a while) about how awful the burn is…

I, by and large, have a strong dislike of Musk to put it mildly. The one thing I will give him, and I think this is his real gift, is he’s absolutely brilliant when it comes to raising capital. He has proven to excel at raising capital, and deploying it well, for extremely capital intensive businesses. I do however wonder if the chickens are coming home to roost because both X and xAI are extremely unprofitable.

I think it’s almost inevitable we will see Space X and Tesla merge. The conditions of that merger will, I believe, say a lot about whether this move was brilliant or batshit.