Billionaire investor Elon Musk recently sold his social media platform X to his AI startup xAI, sparking controversy. The controversy is because the sale is coming off the back of the verdict delivered by a United States judge, rejecting his bid to dismiss a lawsuit tied to the social media platform.

According to Cinneamhain Ventures partner Adam Cochran in an X post, the transfer of ownership of X to xAI means that the lawsuit, which accused Musk of defrauding former Twitter shareholders, has become spicier. “This lawsuit just got a whole lot spicer though, as now he has opened up his AI entity to exposure here too and it’s a much bigger pie,” Cochran said

Elon Musk was the subject of an investigation carried out by the Securities and Exchange Commission in 2022 after he purchased Twitter for $44 billion before rebranding it to X. The SEC filed a lawsuit on January 14, noting that Musk failed to disclose his purchase of Twitter shares within the required 10-day window after surpassing the 5% ownership threshold. The agency mentioned that he failed to disclose the acquisition for 11 days, which ultimately allowed him to purchase shares at low prices, saving him an estimated $150 million.

Elon Musk’s X sale opens xAI to more exposure

Cochran, in his X post, mentioned that the deal has opened Musk’s AI startup xAI to more exposure, noting the coincidence in the acquisition and the US judge’s verdict. According to Musk, the deal values xAI at $80 billion and X at $33 billion, noting the $12 billion in debt from the $45 billion valuation. “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said.

According to Musk, the integration is expected to unlock the full potential by adding xAI’s capabilities and the massive reach of X. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” he said. He also added that the integration will not only enable the firm to build a platform that reflects the world, it will help to actively accelerate human progress.

In other words, Musk used his pumped up xAI stock to pay multiple times over value for X, but still take an $11B loss on the transaction, while screwing over xAI investors, and X investors and to sell your data to his own AI company.

Also Grok at $80B is an insanely dumb… https://t.co/LTN8A6GmRd

— Adam Cochran (adamscochran.eth) (@adamscochran) March 28, 2025

However, Cochran has claimed that Musk pumped up xAI stock to pay multiple times over for the value of X. “In other words, Musk used his pumped up xAI stock to pay multiple times over value for X, but still take an $11B loss on the transaction,” he said on X.

He also added that Musk is screwing over xAI investors, and X investors and to sell your data to his own AI company.

Cochran disagrees over the value of xAI

Meanwhile, Cochran has also shown his displeasure at the valuation of xAI, noting that the company cannot be worth the $80 billion that was quoted. “Also Grok at $80B is an insanely dumb valuation. The one thing Grok does well is live time from access to Twitter data. But otherwise, it’s not a breakthrough model and it’s terribly monetized”, he said.

Grok is the chatbot of Musk’s xAI startup, with the chatbot also built into the X platform. Elon Musk, in November 2023, after the release of Grok mentioned that it could outperform OpenAI’s ChatGPT in several academic tests. He mentioned at the time that the motivation behind building the chatbot was to create AI tools that are equipped to assist humanity by helping with research and innovation.

While Cochran feels that Grok at $80 billion is a dumb valuation, crypto developer Keef disagrees, noting that the chatbot is a top model for various tasks. “This is shady all around but given the day Grok is genuinely probably the top model for various tasks,” he said.

The same sentiment was echoed across the community on X, with most users praising the chatbot and noting that the valuation might be off but it is a good model when it comes to most aspects.

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