Elon Musk's XAI Acquires X: Week in Review

Weekly Tech Roundup: Key Developments

Greetings and welcome to this week’s review of significant tech industry events! Elon Musk has declared that xAI has completed the acquisition of X through a complete stock exchange. Additionally, reports indicate discrepancies in customer figures at 11x, a company supported by a16z. The Lumon Terminal Pro also made an appearance on Apple’s official website, alongside other notable occurrences.

xAI Acquires X in Stock Deal

Elon Musk, the proprietor of X, revealed via the platform on Friday that xAI had finalized the purchase of X, utilizing an all-stock agreement. The resulting valuation places xAI at $80 billion, while X is valued at $33 billion.

“The integration of data, models, computational resources, distribution networks, and skilled personnel is now formally underway,” Musk stated.

Concerns Arise Over 11x’s Reported Growth

TechCrunch’s investigation, based on insights from over 20 individuals – encompassing investors and both current and past employees – suggests that 11x, backed by a16z and Benchmark, has encountered financial difficulties stemming from internal practices.

A former employee disclosed, “Internal growth and churn rates were significantly manipulated to present a more favorable picture.”

Block Announces Workforce Reduction

A confidential message from Block CEO Jack Dorsey, examined by TechCrunch, detailed a workforce reduction of 931 employees, representing 8% of the company’s total staff. This restructuring impacts both Cash App and Square, Block’s primary products.

Dorsey’s communication explicitly denies that the layoffs are a consequence of financial constraints or a move to substitute employees with artificial intelligence.

This is TechCrunch’s Week in Review, a summary of the most important tech news. To receive this as a weekly newsletter directly in your inbox every Saturday, please register here.

Recent Developments

A presidential pardon was granted to Trevor Milton, founder of the now-bankrupt Nikola, following his conviction for fraud. This action, confirmed by the White House to TechCrunch, occurred shortly after Nikola’s Chapter 11 bankruptcy filing.

Concerning data control: A database leak, reviewed by TechCrunch, reveals China’s development of an AI system designed to bolster its censorship capabilities. This system extends censorship beyond established restrictions, such as those surrounding the Tiananmen Square incident.

Innovation takes flight: Rivian’s advanced project team has been established as an independent entity, rebranded as Also, and secured $105 million in funding led by Eclipse Ventures. This allows the team to operate autonomously from its parent company.

Developer focus: Apple has announced the commencement of its Worldwide Developers Conference 2025 on June 9th. Anticipation is building for substantial software updates planned for the iPhone, iPad, and Mac platforms.

Financial challenges: 23andMe, a prominent DNA testing company, has initiated bankruptcy proceedings this week. Simultaneously, Anne Wojcicki, the company’s co-founder and CEO, announced her intention to pursue an independent bid to acquire the company.

From layoff to leadership: Kat Abughazaleh, a former Media Matters employee impacted by layoffs following a lawsuit from Elon Musk, has declared her candidacy for Congress. She aims to demystify the process of running for office.

Pop culture meets tech: A Lumon Terminal Pro, a key element from the television series “Severance,” was identified on Apple’s website by a TechCrunch colleague. This sparked interest among fans of the show.

Security concerns raised: Reports indicate that SpaceX, a contractor for the Pentagon, may have permitted Chinese investors to acquire company shares. These funds were reportedly channeled through offshore locations like the Cayman Islands.

Nintendo’s next generation: Nintendo announced the development of Virtual Game Cards during its Nintendo Direct presentation. These cards will enable players to access their downloaded games across multiple devices.

Copyright Concerns in the Age of AI-Generated Imagery

This week saw the release of a new image generator from ChatGPT, quickly followed by a surge of images mimicking the distinctive style of Studio Ghibli. The resulting discussion centers on the ethical and legal implications of AI's ability to replicate artistic styles.

The Debate Surrounding AI and Artistic Copyright

Opinions are divided regarding the use of AI to generate art in the style of established artists. Some view it as a concerning development, particularly given statements made by Studio Ghibli co-founder Hayao Miyazaki, who has expressed strong criticism of artificial intelligence.

Miyazaki has previously described AI as “an insult to life itself,” a sentiment that underscores the anxieties surrounding the potential devaluation of human creativity.

Navigating the Legal "Gray Area"

While directly copying artwork may not always constitute a legal violation, the process of training AI models raises significant copyright questions. Specifically, the practice of utilizing existing artwork to train these models exists within a complex legal landscape.

The legality of OpenAI’s training methods, which involved “crawling the web and copying” artwork into its databases, remains a point of contention.

Expert Legal Perspective

Evan Brown, an intellectual property lawyer, weighed in on the matter, stating that the situation echoes ongoing debates from the past couple of years.

“What are the copyright infringement implications of going out, crawling the web, and copying into these databases?” Brown questioned in an interview with TechCrunch. This highlights the need for clearer legal frameworks surrounding AI-generated content.

Copyright remains a crucial consideration as AI technology continues to evolve and its capabilities expand.