When does the market realize this is all just a shell game and the emperor really has no clothes?

We saw this on a much smalelr scale a decade ago when one of Elon's companies (Tesla) acquired a second one of Elon's companies (SolarCity) because it was broke and owed a ton of money to a third one of Elon's companies (SpaceX).

Elon was forced to go through with his impulsive Twitter acquisition by a Delaware court, an acquisition that was not only secured by a bunch of Tesla stock but also a bunch of Qatari and Saudi royal money. He then mismanaged Twitter so badly Fidelity wrote down its value by at least 80% [1].

So what did Elon do? Raised even more questionable foreign money into xAI, diverted GPUs intended for another of his companies (Tesla) into Twitter and then "merged" Twitter into xAI, effectively using other people's money to bail him out from an inevitable margin call on his Tesla stock.

Interestingly, Twitter was reportedly valued at $33 billion in this deal [2], significantly more than the less than $10 billion Fidelity valued Twitter at. Weird, huh? With a competent government, this would be securities fraud that would have you spend the rest of your life in jail. And even with all that, $11 billion was lost on the deal.

So here we are and it's time for the shell game to be played again. Now it's SpaceX's turn to bail out the xAI investors.

And what is the argument for all this? AI data centers in space. Words cannot describe how little sense this makes. Launch costs (even if the Starship launch costs get to their rosy projections), cooling in space, cosmic rays (and the resulting errors) and maintenance. Servers constantly need parts replaced. You can just deorbit the satellite instead but that seems like an expensive way of dealing with a bad SSD or RAM chip.

[1]: https://www.cnn.com/2024/10/02/business/elon-musk-twitter-x-...

[2]: https://www.cnbc.com/2025/03/28/elon-musk-says-xai-has-acqui...