Ah, Mr. Musk I see you have a strong data game

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

The sink too
xAI buys X.com
Badger Man

If that’s enough to get the X-something for sale, read on…

AI Collision 💥

It’s 26 October 2022. Elon Musk walks into the headquarters of the social media company known as Twitter, carrying… a sink.

This gag was the last roll of the dice for Musk to complete the purchase of Twitter for $44 billion. So, he threw in the kitchen sink…

Get it?

It worked. The next day he closed on the deal and out of nowhere Elon Musk owned one of the largest social media companies in the world… along with all his other companies.

In the years since, he’s completely changed the function and operations of Twitter, now X.com. And it was instrumental in the decisive victory of Donald Trump in the 2024 election.

What X.com has also become is one of the richest sources of real-time data in the world.

And that’s where xAI comes into play.

No, I don’t just mean by xAI offering Grok within X.com. I mean that’s where xAI comes in and buys X.com.

Please, make it make sense!

Over the weekend, xAI bought X.com for $33 billion in an all-stock deal. This move puts xAI at a cool $80 billion valuation. That’s an impressive number itself considering the relatively early stage that xAI is still at.

This isn’t just a business transaction though. This is a clear data play – and a move to make AI far more heavily involved in how and where information is gathered and distributed.

That could be great, or lead us down a dystopian track…

The announcement from Elon more or less explained the reason for the deal.

In his post he said:

Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.

I think the end game here is to develop X.com into that “everything app” that it’s now widely agreed Elon is trying to develop.

This integration also comes before the launch of Xmoney later this year, the payments, remittance and (as I expect) crypto elements of X.com as an entire financial system.

I think AI will play a significant role in the processing and operations of Xmoney as a kind of prototype test for how the wider US economy could be structured.

Also, xAI is financially travelling pretty well, while X.com was levered up with a fair amount of debt as the overhang from the initial purchase.

Now, Musk can lean on xAI’s sky-high valuation to shore up X’s books, turning a cash-strapped platform into a leaner, meaner machine. It possibly indicates that he could float and list xAI this year (or next) too by launching an IPO – another hugely exciting opportunity for the market.

The timing of this could coincide with a reversal of attitude from the Trump administration towards the market, the economy and their current global tariff and trade wars.

The big takeaway here is that nothing Elon does is random. He’s a chess player, with a direct line into the most powerful man and economy on earth (yes, Trump has even more power than Elon).

I think this combination, at this point in time, in the current geopolitical and economic climate, is a very strong signal that things will turn for the better, longer. Follow Elon’s moves, and I think you’ll find the best indicator for the market. And this is his most bold move since the original purchase of Twitter.

Record-breaking IPO?

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Capital at risk.

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Boom 📈

Predictive Oncology (NASDAQ:POAI) up 36%
Apple (NASDAQ:AAPL) up 1%
IBM (NYSE:IBM) flat 0%

Bust 📉

Vertiv (NASDAQ:VRT) down 22%
iRobot (NASDAQ:IRBT) down 21%
BigBear.ai (NYSE:BBAI) down 19%

From the hive mind 🧠

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