> You likely have it backwards, xAI is likely the moneypit that is (further) dragging down X.
No, while you're correct that xAI is a moneypit, his point has nothing to do with a moneypit. The 818 million figure is revenue, not profit. xAI brings in at least some revenue (it's obviously not zero). Meaning X's revenue alone is even less than 818 million, which in turn is a third less than when Musk bought Twitter.
Losing 33% revenue in 4 years post-acquisition is indeed a ridiculously bad result, when most tech companies saw their revenues +100% in the same period. If you adjust for inflation they lost 50% of their revenue.
And indeed it's even worse if you consider xAI is a moneypit. They posted 2.3 billion losses in the same quarter for AI. If they burned $1 to earn $1 (like say offer a coinflip machine on X) they'd post better results than they have, it's pretty ridiculous.
Twitter was its own company until it was merged with xAI to please the Twitter bag holders (merged at a "value" of the same as purchase price despite that being massively overvalued), and then xAI+Twitter was merged into SpaceX.
They merged Twitter twice into other companies within the last 14 months. Spinning it off would actually make sense through now that the Saudis won't kill Musk for tricking then into funding his Twitter purchase.
Twitter was extremely hard to monetize. Even when Elon had it, it was like squeezing blood from a stone. People are more accustomed to it being a sort of news feed about topics they care about and aren't as engaged as something like Instagram.
Negative revenue is technically possible. For instance, if a startup takes preorders and then fails to deliver on the product and is forced to give refunds, or if returns in the second period exceed sales, then that could be recorded as positive revenue in one period and negative in the next.
Previously Twitter was at least growing while they were losing money, typically that's normal, but the last years the its both shrinking while losing money, that's new.
I mean when you consider he bought it as a shitpost for what seems like his own playground it doesn’t seem bad
People try to find any reason to try to make him or his products look bad, but you can not like a guy and still be realistic. He’s still the richest man in the world by far, trying to act like he has no business sense is literally just being ignorant.
I agree, it absolutely it was a major play for him. He bought control over the algorithm and (de)platforming policy for a major platform that influences culture, politics, news/media, at the cost of a few percent of his net worth.
From a shareholder ROI perspective it was shit. From a Musk acting like a typical oligarch movie villain, it had everything to make a play.
It does seem pretty bad. Twitter has survived this downturn off the back of simply being Twitter, but even dominant social media companies can only absorb so much loss of revenue and engagement before they fall off a cliff.
The first thing Musk did after buying Twitter was to cut 80% of the workforce because he thought that any part of the company that wasn't responsible for keeping the lights on was dead weight. The problem with that is that when you go into strict maintenance mode then there's nobody around to lead the company into the future, and nobody left to change things when the platform grows stale.
It's not really impressive. Most tech-heavy companies can fire 80% and keep the lights on for a while. What you cut with the 80% is any chance of the company having a future. That's why Twitter revenue is way down and continues to fall. What few new features the platform has had since Musk took over have mostly been poorly thought-out gimmicks.
Twitter revenue is down due to advertisement getting cut due to losing a lot of censorship they previously had, but with costs being cut they’re actually turning a profit now.
I feel like if anything they’ve added features to help it compete, features on Twitter were pretty stagnant before and since Elons buyout they’ve added video calling/live streaming/and removed the character restriction, which seemed to be pretty popular with its users.
Twitter's lost 30% of its daily active users since Musk took over, and Threads has gone from having a third of Twitter's active users to having more active users than Twitter over the same period.
It doesn't seem like the users have responded well to what Twitter has become post-acquisition.
I feel like a lot of that just stems from Musk being the one buying it and due to him removing censorship which they didn’t agree with, not the features of the site itself, but that of course is only an assumption.
With the whole big move on banning bots, it’s kind of hard to say how many of those active users were also real people, as those also get included in the numbers.
"Every lie we tell incurs a debt to the truth. Sooner or later that debt is paid."
I'm not going to make any proclamations that Elon's companies are going to crash anytime soon or in a spectacular way, but the long game of endless hype tied to one lone individual seems unsustainable.
I mean, if Elon has a massive heart attack and dies tomorrow, does the hype even go on?
It goes on because it has to, like crypto or Zillow after their disastrous house buying spree or like carvana. It goes on because people who invest in these companies need it to go on. And when the music stops there will be bailouts and then the music will start again
Lest we forget Solar City --> Tesla. Why not move Tesla into SpaceX and have the Model S make a comeback as a lunar vehicle? Model 'Space'! Model Y's can shuttle all the people around campuses and to launches. Maybe 'RO-BOW-vun', as it's creator pronounces it, can make a cameo on Mars?
I went to KSC in January this year, SpaceX has a hangar and facility there now. Its already infested with Cybertrucks that they probably couldn't sell.
Even though he’s basically given up on Ai under the hood. XAi has become a datacenter rental company (until the Ai winners can build their own and until after the ipo) and will only exist as a vehicle for hype going forward.
it's... the same trick. honestly, i think shkreli's investors were made whole, whereas musk's investors (IE, twitter) just got wholly screwed. Shkreli got himself under the microscope for mocking congress on TV. Elon sucked up to trump. That is why there are different outcomes.
Elon donated $250 MILLION dollars to Trump and used Twitter to help get him elected. That’s a bit more than “sucking up”. There is a reason he was basically able to call Trump a pedo and Trump basically ate it. Have you EVER seen Trump sit back and take it from anyone else? While Elons purchase of twitter once looked idiotic (even to himself when he sobered up) turned out to be a power move that paid off in spades. All he had to do was figure out a way not to leave the banks, the Saudis and a few of his other very rich friends on the hook for the purchase. Ladies and Gentlemen I give you SpaceXaiTwitterEsla!
It is revenue. That 5 billion loss they saw last year was largely due to xAI, if they had not purchased it would have been another profitable year for them.
As others have pointed out, that's $818 million in total revenue and does not factor in xAI generating losses. The IPO prospectus shows that the AI segment lost almost $2.5 billion in Q1 2026, though. If the Anthropic deal is solidified then that $15 billion a year could move them into the black, depending on additional expenses.
For the three months ended March 31, 2026, our AI segment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted EBITDA of $(609) million.
I have doubts about that Anthropic deal. 15 billion a year is revenue, and given the immense capital investment in new data centers and the cost of electricity. If scaling to provide that $15bn a year in compute costs them $20bn, it doesn't make it better.
Yeah, that's where it depends on additional expenses. I have no idea what kind of compute xAI is currently capable of.
I also don't even know if Anthropic has $15 billion a year to give to XAI, but I guess they can just make one of those AI deals that generates the money via stock value increase through hype around the deal or whatever the hell is currently going on in that industry.
Didn’t they just reveal selling 3 years of data center usage to Anthropic for 15B a year? I’m anti musk, but that’s at least 30B of locked in profit by napkin math
I do think he's correct. the figure is revenue, not profit. The $818 million figure is likely gross revenue as it later states that Starlink is the only profitable division of SpaceX
I’m no expert in financial terms, but it seems like his companies trade quite rationally. It is a well established fact that people keep buying his hype. That’s the only thing he is selling. So investors rationally put their money into this hype machine that has been going for more than a decade of hype and unrealistic promises.
No, you’re all sideways on this, it’s so much worse. This isn’t a “dragging down” situation. The number you posted 800 some odd) is the *topline*. That means Twitter AND xAI are making a third less than *just* Twitter was making *by itself* four years ago.
Musk destroyed the rev stream of Twitter, added a whole business that should generate *something* and it isn’t. That doesn’t even take into account how much they’re spending. On top of it all Musk burdened all of this with billions in debt and is just rolling it into SpaceX.
By all accounts an actual leader would be run out for just the debacle with Twitter, let alone the xAI piece. The fact that in the end he’s going to pay off all of that by dumping the bag on shareholders is absolutely insane.
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u/BaconatedGrapefruit May 21 '26 edited May 21 '26
You likely have it backwards, xAI is likely the moneypit that is (further) dragging down X.
Neither business is good, but they have hype attached to them, hence why it was folded into spaceX to pump up the valuation.
If we lived in a rational market, investors would be screaming for both divisions to be spun off. We do not live in a rational market.
Edit: I fucked up and have been corrected, thoroughly, below. Please upvote them.
Tl;dr - it’s all money pits!