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Elon Musk's xAI (XAAI.PVT) has bought X (formerly Twitter) for $33 billion in an all-stock deal. The new combined entity, called XAI Holdings, is valued at more than $100 billion. Madison Mills and Bullseye American Ingenuity Fund portfolio manager Adam Johnson break down the latest.
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Elon Musk's XAI just bought his social media company X, according to a post from Musk. This is an all-stock deal that values X at $33 billion, not including debt, and XAI at 80 billion. The new combined entity will be called XAI Holdings. This could be seen as a win for shareholders of the social media company which has seen a rocky couple of years, advertisers and users fleeing the platform here. You can see those two valuations compared on the screen here, and we still have Adam Johnson with Bulls Eye here in studio just to discuss. We still got you, we still got you. What do you, what do you make of, of this deal? Elon Musk, I mean, he's got a lot on his plate, he's still deal making, he's running Doge.
Still stuck with me, Madison.
Yeah.
Boy, he's busy. I think it's a brilliant deal, and I'll tell you why. Uh, and I have no vested interest in this. Obviously, you can't own these companies, uh, they're private. But, uh, what I think he's really doing is buying access to real-time data, um, at scale. Right? Think of all these AI models that have to go back and retroactively try to figure out, um, the whys and connect the dots, um, to, to come up with their large language models or LLMs. Well, what if you could actually do that with real-time data? What better place to find real-time data about everything from human emotion, to news, to sports, to celebrities, um, to gossip, you name it. What better platform than Twitter? And it's global. So I think it's effectively a way of training his, um, his AI models, and he can do it internally, and he doesn't have to answer to anyone to do it.
And can the AI model that he potentially works through here beat some of those first movers that have already been in the space that consumers are already used to, given the, the delay?
Yeah. Yeah, I don't know where he's going with AI. I don't think anyone knows. Uh, he may not even know. Mr. Musk may not even know where he's going with AI. I mean, how can we know? You know, we, we think we know what's capable of it, and Hollywood has done a wonderful job at sort of tickling our imaginations, but we don't really know where it's going. How far it can go, how it can change life, um, how it could, it, we, we already sort of know how it can improve daily things like making us write smarter emails or better term papers, but we don't really know where it's going in terms of crunching data that might, uh, help us customize drugs as an example.
Right. Right, or how it will potentially like protect market profit margins and all of those things. Definitely a lot to unpack.