cointelegraph.com
Elon Musk’s sale of X to xAI just made fraud lawsuit a ‘lot spicer’
Elon Musk has sold his social media platform X to his AI startup xAI, sparking controversy as it coincides with a US judge rejecting his bid to dismiss a lawsuit tied to the social media platform. The transfer of ownership means the class-action lawsuit against Musk, accusing him of defrauding former Twitter shareholders, has become more complex. Musk said the deal values xAI at $80 billion and X at $33 billion, factoring in $12 billion in debt. The acquisition may open xAI up to more exposure in the lawsuit. A US judge reportedly rejected Musk's attempt to dismiss the lawsuit on the same day as the acquisition. Musk claims the combination of xAI and X will unlock immense potential by blending AI capability and expertise with massive reach. However, some critics argue that Musk used his pumped-up xAI stock to pay multiple times over value for X, taking an $11 billion loss on the transaction. xAI is best known for its AI chatbot "Grok", which is built into the X platform and is valued at $80 billion. The motivation behind building Grok was to create AI tools equipped to assist humanity by empowering research and innovation. The deal has sparked debate among experts, with some calling the valuation of Grok "insanely dumb" and others defending its potential.
