5 ms·

As a SpaceX fan, I am saddened by this news. The only reason for xAI to join SpaceX is to offload Elon's Twitter debt in the upcoming IPO.

by senko 9mo ago

bialczabub 9mo ago
This is just what I was thinking. Twitter (X) owed $1.3B in debt every year in interest since Musk's takeover. This was before re-financing in a higher interest rate environment. The company was losing $200MM+ per year on ~$5B in revenue before the takeover, and there are reports that revenues have decreased by round 50%. Best case scenario if we accept those numbers is that X makes $3B per year and about half of that goes immediately out the door in debt payments before paying a cent for the entire business to function. However, if SpaceX acquires X, that ~$1.5B in interest is a fraction of the $8B In profits SpaceX is allegedly generating annually. Further, they can restructure the debt if it's SpaceX's debt, and not owned by X. Investors will be more likely to accept SpaceX shares as collateral than X.
- dmix 9mo ago
  > The company was losing $200MM+ per year on ~$5B in revenue before the takeover, and there are reports that revenues have decreased by round 50%. X made a profit last year because they cut costs lower than the drop in ad revenue (which is also slowly recovering). The big question is if they will still be profitable in 2026 year without the US election driving big traffic numbers and ads.
  - bialczabub 9mo ago
    How do you "know" this? They're private and don't need to report anything. You also have to be careful about who said it and what they meant by "profit," because there is gross profit, EBIT, EBITDA, and others.
    - dmix 9mo ago
      They report these numbers to their investors who leak them to the press.
      - turtlesdown11 9mo ago
        these are unaudited numbers that anyone should take with a grain of salt
    - Sparyjerry 9mo ago
      Banks released pricing to sell their debt. When the debt gets to valued near market value, it means it is essentially guaranteed to get paid back. The company was making much less money but was more profitable, see the other posters comment on EBITDA.
  - bootlooped 9mo ago
    As far as I understand they did not make a profit in 2025. They posted positive adjusted EBITDA, which is not the same.
    - dmix 9mo ago
      You're right, wrote that from memory. It was EBITDA that surpassed anything Twitter previously had before purchasing it. > Despite a revenue drop from $5 billion in 2021 to roughly $2.7 billion in 2024, the EBITDA margin surged from 13.6% to 46.3% due to drastic cost-cutting measures and restructuring https://x.com/ekmokaya/status/1887398225881026643 https://x.com/ekmokaya/status/1887398225881026643
guelo 9mo ago
As an old twitter fan, same. I was hoping elon would lose twitter to the banks in a bankruptcy.
isodev 9mo ago
[flagged]
jillesvangurp 9mo ago
The Twitter debt is not that big in the grand scheme of things. Twitter has been absorbed into his AI company some time ago. SpaceX is a big business. And despite the decline, Tesla is also still a big business. Both generate quite a few billions in revenue. The staggering amount of money Elon Musk raised for doing AI stuff is quite a bit more than what he ever expended on the Twitter value implosion. I think we can agree that there isn't much left of that. Also, whatever debt was issued for that was issued in dollars. We've had a few years of inflation and dollar devaluation recently. I don't think whatever Twitter debt there was is much of big headache for X at this point. X.ai is controversial mainly because of Musk. But if you can look beyond that, it does actually have a bit of non trivial IP. Grok is not bad as a LLM. It's not necessarily best in class but it's close enough to be useful. Apple needs to license their AI from Google and OpenAI. MS outsources to OpenAI. Amazon doesn't really have their own models at all. So, as trillion dollar companies go, having your own in house developed model training pipeline that actually works isn't all that common yet. Musk for all his failings has a talent for looking beyond the current day to day navel gazing that characterizes VC short term thinking and much of the activity in silicon valley. He clearly looks at space as a bit of underused real estate. Star Link is one of those mad plans that actually seems to make sense now that he has proven that launching thousands of satellites into space isn't that big of a deal and can actually be profitable if you get a few million people to spend billions per month on reliable data connections. AI data centers in space are similarly ludicrous unless you have a newly developed 100+ ton to orbit reusable launch capability at your disposal. Also, the nature of doing stuff in space is that it is a very people hostile environment. So having some in house AI capability isn't the worst idea for a space company with ambition, which like it or not SpaceX clearly has. I wouldn't call X.ai a bar gain. But what's the alternative if you are semi serious about controlling an armada of space craft across the solar system?
- senko 9mo ago
  > The staggering amount of money Elon Musk raised for doing AI stuff is quite a bit more than what he ever expended on the Twitter value implosion. Total investment in xAI are around $30B-40B (including the latest E round). Twitter purchase price at $44B was more than that. Out of that 44B, ~$25B was debt financing. > Star Link is one of those mad plans that actually seems to make sense now [...] AI data centers in space are similarly ludicrous unless you have a newly developed 100+ ton to orbit reusable launch capability at your disposal I don't think these two are comparable. Starlink obviously makes sense if you can put thousands of satellites in LEO cheaply, which (only) SpaceX could. The challenge there was to actually build and put them there. For data centers, even if you can launch for free, the physics and economics don't make sense. Solar is free but the amount of solar arrays (and cooling radiators) required means it's just easier and cheaper to build out the same thing on Earth, and that's without thinking about maintenance of either the data center or the required support equipment. In theory it can be done. In practice, I humbly propose that putting the same engineering brains on solving the hard questions of keeping people alive in space (so they can, eg, get to Mars and back) would align more closely with the SpaceX mission. > But what's the alternative if you are semi serious about controlling an armada of space craft across the solar system? "X Combinator" for space tech (life support, stations, habitats, etc - everything that SpaceX itself isn't focusing on). Refueling depots at strategic locations that are good launching points for deep space (Mars+) missions. Not a friggin' LLM.

As a SpaceX fan, I am saddened by this news. The only reason for xAI to join SpaceX is to offload Elon's Twitter debt in the upcoming IPO.

by senko 9mo ago

As a SpaceX fan, I am saddened by this news. The only reason for xAI to join SpaceX is to offload Elon's Twitter debt in the upcoming IPO.

bialczabub 9mo ago

This is just what I was thinking. Twitter (X) owed $1.3B in debt every year in interest since Musk's takeover. This was before re-financing in a higher interest rate environment. The company was losing $200MM+ per year on ~$5B in revenue before the takeover, and there are reports that revenues have decreased by round 50%. Best case scenario if we accept those numbers is that X makes $3B per year and about half of that goes immediately out the door in debt payments before paying a cent for the entire business to function. However, if SpaceX acquires X, that ~$1.5B in interest is a fraction of the $8B In profits SpaceX is allegedly generating annually. Further, they can restructure the debt if it's SpaceX's debt, and not owned by X. Investors will be more likely to accept SpaceX shares as collateral than X.

dmix 9mo ago
> The company was losing $200MM+ per year on ~$5B in revenue before the takeover, and there are reports that revenues have decreased by round 50%. X made a profit last year because they cut costs lower than the drop in ad revenue (which is also slowly recovering). The big question is if they will still be profitable in 2026 year without the US election driving big traffic numbers and ads.
- bialczabub 9mo ago
  How do you "know" this? They're private and don't need to report anything. You also have to be careful about who said it and what they meant by "profit," because there is gross profit, EBIT, EBITDA, and others.
  - dmix 9mo ago
    They report these numbers to their investors who leak them to the press.
    - turtlesdown11 9mo ago
      these are unaudited numbers that anyone should take with a grain of salt
  - Sparyjerry 9mo ago
    Banks released pricing to sell their debt. When the debt gets to valued near market value, it means it is essentially guaranteed to get paid back. The company was making much less money but was more profitable, see the other posters comment on EBITDA.
- bootlooped 9mo ago
  As far as I understand they did not make a profit in 2025. They posted positive adjusted EBITDA, which is not the same.
  - dmix 9mo ago
    You're right, wrote that from memory. It was EBITDA that surpassed anything Twitter previously had before purchasing it. > Despite a revenue drop from $5 billion in 2021 to roughly $2.7 billion in 2024, the EBITDA margin surged from 13.6% to 46.3% due to drastic cost-cutting measures and restructuring https://x.com/ekmokaya/status/1887398225881026643 https://x.com/ekmokaya/status/1887398225881026643

guelo 9mo ago

As an old twitter fan, same. I was hoping elon would lose twitter to the banks in a bankruptcy.

isodev 9mo ago

[flagged]

jillesvangurp 9mo ago

The Twitter debt is not that big in the grand scheme of things. Twitter has been absorbed into his AI company some time ago. SpaceX is a big business. And despite the decline, Tesla is also still a big business. Both generate quite a few billions in revenue. The staggering amount of money Elon Musk raised for doing AI stuff is quite a bit more than what he ever expended on the Twitter value implosion. I think we can agree that there isn't much left of that. Also, whatever debt was issued for that was issued in dollars. We've had a few years of inflation and dollar devaluation recently. I don't think whatever Twitter debt there was is much of big headache for X at this point. X.ai is controversial mainly because of Musk. But if you can look beyond that, it does actually have a bit of non trivial IP. Grok is not bad as a LLM. It's not necessarily best in class but it's close enough to be useful. Apple needs to license their AI from Google and OpenAI. MS outsources to OpenAI. Amazon doesn't really have their own models at all. So, as trillion dollar companies go, having your own in house developed model training pipeline that actually works isn't all that common yet. Musk for all his failings has a talent for looking beyond the current day to day navel gazing that characterizes VC short term thinking and much of the activity in silicon valley. He clearly looks at space as a bit of underused real estate. Star Link is one of those mad plans that actually seems to make sense now that he has proven that launching thousands of satellites into space isn't that big of a deal and can actually be profitable if you get a few million people to spend billions per month on reliable data connections. AI data centers in space are similarly ludicrous unless you have a newly developed 100+ ton to orbit reusable launch capability at your disposal. Also, the nature of doing stuff in space is that it is a very people hostile environment. So having some in house AI capability isn't the worst idea for a space company with ambition, which like it or not SpaceX clearly has. I wouldn't call X.ai a bar gain. But what's the alternative if you are semi serious about controlling an armada of space craft across the solar system?

senko 9mo ago
> The staggering amount of money Elon Musk raised for doing AI stuff is quite a bit more than what he ever expended on the Twitter value implosion. Total investment in xAI are around $30B-40B (including the latest E round). Twitter purchase price at $44B was more than that. Out of that 44B, ~$25B was debt financing. > Star Link is one of those mad plans that actually seems to make sense now [...] AI data centers in space are similarly ludicrous unless you have a newly developed 100+ ton to orbit reusable launch capability at your disposal I don't think these two are comparable. Starlink obviously makes sense if you can put thousands of satellites in LEO cheaply, which (only) SpaceX could. The challenge there was to actually build and put them there. For data centers, even if you can launch for free, the physics and economics don't make sense. Solar is free but the amount of solar arrays (and cooling radiators) required means it's just easier and cheaper to build out the same thing on Earth, and that's without thinking about maintenance of either the data center or the required support equipment. In theory it can be done. In practice, I humbly propose that putting the same engineering brains on solving the hard questions of keeping people alive in space (so they can, eg, get to Mars and back) would align more closely with the SpaceX mission. > But what's the alternative if you are semi serious about controlling an armada of space craft across the solar system? "X Combinator" for space tech (life support, stations, habitats, etc - everything that SpaceX itself isn't focusing on). Refueling depots at strategic locations that are good launching points for deep space (Mars+) missions. Not a friggin' LLM.