AI Endgame: Elon Musk merges X with xAI - what next?

Newsletter #28

Apr 04, 2025

https://debbiecoffey.substack.com/p/ai-endgame-elon-musk-merges-x-with

April 4, 2025

By Debbie Coffey, AI Endgame

Elon Musk’s xAI artificial intelligence startup has acquired the X (formerly twitter) social media platform, which he also controls.

Musk described the all-stock transaction in a post on X as “The combination values xAI at $80 billion and X at $33 billion.”

The new combined entity, called XAI Holdings, has a value of more than $100 billion. [1]

What about all the messages you’ve posted on X? Musk can now seamlessly combine his two businesses by taking your information from the X social network and feeding it directly into his xAI and its chatbots.

Musk was already using X to promote Grok, a chatbot developed by xAI. Grok was trained, in part, with posts from X users. Combining X and xAI just takes things to the next level.

And, as you may have read in my previous newsletter, Palantir (one of the world’s biggest surveillance companies), is integrating xAI’s Grok into its AI Platform.

In the article “What Could xAI Mean for YOU?” by Andra Watkins, a fellow Substack writer (“For Such a Time as This”), she states “While this could be a financial deal to bolster his portfolio of companies against the fall of Tesla, it could also be a move to consolidate the tools to turn X into a US version of WeChat.”

Elon Musk has said that he wants to transform X into a much larger platform. He’s praised WeChat, which combines chat, dating, payments and social media. Musk said creating something "even close to that with Twitter... would be an immense success.”

Years ago, Mark Zuckerberg also suggested that WeChat should be a case study for Facebook. [2]

What could these guys be thinking?

WeChat

Chinese tech company Tencent is the owner of WeChat. WeChat has over 1.38 billion monthly active users. [3]

WeChat’s services include messaging, voice and video calling, social media, food delivery, mobile payments, games, news and even dating. WeChat is like many apps rolled into one. Even government services are on WeChat. Users can check social security information, pay speeding tickets and book hospital appointments.

WeChat is such a huge part of everyday life functioning in China that it’d be almost impossible to live there without it.

However, it’s dangerous for people to speak out against the government on WeChat. [4]

Human Rights Watch (HRW) notes “…it’s a trap.” WeChat censors and surveils their users, and hands over user data to the Chinese government. [5]

WeChat has real-time, automatic censorship of text and images. This censorship exerts control over political discussions, investigations and any possible exposes of corruption. All discussions are subject to the Chinese government’s approval. [6]

If Musk integrates X with digital payments, a key element of WeChat, he’ll be one step closer to turning X into his own WeChat. [7]

Does Musk want the power of information control and censorship? He was certainly not happy about the “Saturday Night Live” sketch in which Mike Myers parodied him. It seems like the only free speech Musk wants is what he wants to hear.

As an interesting aside, you may know that both Elon Musk and Palantir’s Peter Thiel are from South Africa. Coincidentally, about 34% of TenCent (that owns WeChat) is owned by Prosus, the global internet investment business unit of Naspers. Naspers Limited (until 1998, Die Nasionale Pers), is a South African multinational internet, technology and multimedia holding company headquartered in Cape Town.

OpenSecrets revealed that Die Nasionale Pers funded the National Party (NP) during apartheid. The National Party was initially an Afrikaner ethnic nationalist party, but later became a major promoter and enactor of white supremacy. [8]

Musk’s Starlink is taking over the White House Wi-Fi

While I’m on the topic of Elon Musk, you’ve probably read the news that the White House is adding Musk-owned SpaceX’s Starlink Wi-Fi “to improve Wi-Fi connectivity on the complex.”

The White House's Starlink internet service is reportedly being “donated” by Starlink. [9]

People have noted it’s unusual that the Starlink panels are routing the connectivity over existing fiber lines. Former NSA hacker Jake Williams said “The only reason they'd need Starlink would be to bypass existing security controls that are in place…” [10]

Besides national security issues, I’m wondering if Starlink was “donated” so it would be considered to be a “gift” in order to bypass CFR 54.622 Competitive bidding requirements. [11]

This quick decision to use Starlink wasn’t fair because other companies weren’t given the chance to offer bids. The White House is a federal building, not a private home. Obtaining Wi-Fi at the White House should be a far different process than if I decide to call to set up a Spectrum account.

At any rate, this “donation” is not a gift. It’s just another way for Musk integrate his businesses into our government so that our government agencies become dependent on his companies.

Where else in our government will Musk insert his companies?

Musk, who’s chopping apart our government agencies, has already reportedly collected $38 billion (your tax dollars) in government funding over the years through contracts, loans, subsidies, and tax credits. [12]

As we see the increasingly massive reach of AI companies within, and integrating, multiple industries (and our government agencies), I’m wondering at what point some laws about monopolies might kick in.

Anti-trust laws

We need to make sure high tech companies aren’t skirting anti-trust laws.

Per the Federal Trade Commission (FTC) there are three main federal antitrust laws.

The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." The Sherman Act doesn’t prohibit every trade restraint, only those that are unreasonable. For example, arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids would be illegal.

The Federal Trade Commission Act bans "unfair methods of competition" and "unfair or deceptive acts or practices." All violations of the Sherman Act also violate the FTC Act. This means the FTC can bring cases against the violating companies.

The Clayton Act addresses specific practices that the Sherman Act doesn’t prohibit. For example, mergers where the same person makes business decisions for competing companies. [13]

Beware of any version of “WeChat” under any other name

We don’t want our own restrictive version of WeChat here. Unfortunately, although our First Amendment protects our speech from government censorship (federal, state, and local government), this doesn’t include censorship by private businesses, organizations or citizens. [14]

We could opt out of an xAI version of WeChat here, but only if everything doesn’t become dependent on xAI.

Find links to all past AI Endgame newsletters HERE.

What you can do

Be sure to contact your congressional representatives regarding monopolies, information control, and censorship. Ask them to keep the power of the AI oligarchs in check.

Find out how to contact your Congressional representatives here:

https://www.house.gov/representatives/find-your-representative

Find out how to contact your Senators here:

https://www.senate.gov/senators/senators-contact.htm?Class=1