Saturday, May 31, 2025

Latest

Musk Used AI Firm’s Cash to Keep X Afloat, Documents Show

Elon Musk transferred hundreds of millions of dollars from his artificial intelligence company xAI to prop up social media platform X, according to financial documents shown to investors during this week’s $5.5 billion debt sale.

Banks sold the floating-rate debt at 97 cents on the dollar with an 11% interest rate, the Wall Street Journal reported on Wednesday, exceeding their initial $3 billion target as investors including Pimco and Citadel rushed to participate.

The documents also revealed X now holds a 10% stake in xAI, valued at approximately $5 billion based on the AI company’s $50 billion valuation last year. This ownership structure contradicts Musk’s previous statement that X investors would own 25% of xAI.

The cash transfers from xAI helped X pay its bills and meet debt obligations while advertising revenue was trying to recover. X projects $2.7 billion in revenue and $1.25 billion in adjusted earnings for 2024, down from Twitter’s $5 billion revenue in 2021 before Musk’s takeover.

At Friday’s investor meeting, X CEO Linda Yaccarino and CFO Mahmoud Reza Banki, alongside Morgan Stanley bankers, presented evidence of X’s improving financial health. 

The Journal said that people who attended the meeting described the growing connection between X and xAI as “most striking,” noting the companies share key executives while xAI trains its systems on X’s data. 

The executives indicated growing advertising revenue should reduce X’s reliance on xAI cash transfers in coming months. However, X continues to struggle with break-even operations, with Musk estimating annual interest payments exceed $1 billion.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Alamos Gold Q1 Earnings: The Inside Scoop

Cerrado Gold Q4 Earnings: The Turnaround is Working

B2GOLD Q1 Earnings: Revenue Up, Production & Cash Flow Decline

Recommended

Canadian Copper: The $172M Combined Strategy PEA

ESGold Begins Concentration Tests Ahead Of First Production

Related News

Elon Musk Sells Tesla Stock Again: 22 Million Shares For $3.58 Billion

Tesla (Nasdaq: TSLA) Elon Musk sold a total of 22 million shares worth $3.58 billion...

Thursday, December 15, 2022, 07:00:00 AM

Musk Slashes Tesla’s US Marketing Team: “Ads Were Far Too Generic”

Tesla (NASDAQ: TSLA) gutted its newly formed marketing team as part of broader layoffs across...

Tuesday, April 23, 2024, 11:32:00 AM

Elon Musk Wants “A Very Public Battle In Court” Against EU Over Findings Against X

Elon Musk, CEO of X (formerly known as Twitter), has responded with a fiery outburst...

Monday, July 15, 2024, 04:01:00 PM

From $8 Blue Checks To Paywalls: Elon Musk’s Reported Plans For Twitter

After the brouhaha brought about by Elon Musk’s new $8 per month subscription to Twitter’s...

Wednesday, November 9, 2022, 05:12:00 PM

Twitter Ad Revenue Evaporates As Advertisers Remain Wary of Musk

New estimates show that despite huge discounts and the promise of better control with new...

Friday, April 7, 2023, 03:27:00 PM