Welcome to the TechMeme Right Home for Monday, the final day of March 2025. I'm Brian McCullough. Today, over the weekend, Elon said that XAI has acquired X. Elon does love to blend his companies together. Tensions between SpaceX and Apple. Apple is working on a major health app overhaul. And in this era of cryptocurrency ascendancy, is Ethereum being left behind? Here's what you missed today in the world of tech.
We missed a big one over the weekend. Elon Musk announced that XAI acquired X in an all-stock deal, valuing XAI at $80 billion in X. at $33 billion. XAI was reportedly in talks to raise funds in February at a $75 billion valuation. So this would be more then, quoting CNBC. XAI and X's futures are intertwined, Musk, the world's richest person wrote in a post on X. Today, we officially take the step to combine the data, models, compute, distribution, and talent.
He added that the merger would unlock immense potential by blending XAI's advanced AI capability and expertise with X's massive reach. The purchase price, he said, was $45 billion less $12 billion in debt.
Because both companies are privately held and controlled by Musk, the transaction likely amounts to a stock swap with ex-investors getting paid out in XAI shares. The companies have a number of mutual investors, including venture firms Andreessen Horowitz and Sequoia Capital, as well as Fidelity. Management, Vi Capital, and Saudi Arabia's Kingdom Holding Company.
Musk, who's also CEO of Tesla and SpaceX, acquired Twitter in a deal valued at around $44 billion in late 2022, implementing massive cost cuts and soon renaming it X. Linda Iaccarino, who Musk hired as CEO of X, wrote in a post. after Friday's announcement, the future could not be brighter. Musk launched XAI less than two years ago with a stated goal to understand the true nature of the universe. This isn't the first time Musk has merged two of his entities. In 2016,
Tesla acquired SolarCity for $2.6 billion. The solar installer was founded by his first cousins, Lyndon and Peter Rive, and funded by Musk, who served as board chair. Tesla shareholders later sued, alleging the deal amounted to a SolarCity bailout and a breach of fiduciary duty that enriched Musk personally. Delaware judges who heard the dispute decided in favor of Musk and Tesla and allowed the deal to stand without any remuneration back to the automaker, end quote.
Now, I have to say that some of these numbers are confusing to me. A source told Bloomberg that the new combined entity housing XAI and X is called XAI Holdings and is valued at more than $100 billion but less. than $113 billion since X already owned part of XAI. Again, this is confusing, so see if this is explicable to you.
The combination values XAI at $80 billion and X at $33 billion, the billionaire wrote Friday in a post on X. The value of X is $45 billion when including $12 billion of debt, he said, describing the purchase as an all-stock transaction.
The deal gives the new combined entity called XAI Holdings a value of more than $100 billion, not including the debt according to a person familiar with the arrangement who asked not to be identified because the terms weren't public. Morgan Stanley was the sole banker on the deal, representing both sides, other people said. integrate the system quite nicely.
said Shweta Karajura, a Wolf research analyst who views the deal as a positive for both of Musk's businesses. This gives Grok a unique advantage by providing access to vast amounts of training data while also allowing XAI to control or even cut off that data flow to other countries. Gene Munster.
A managing partner at Deepwater Asset Management and an investor in both companies wrote on X that the deal makes a lot of sense by giving XAI an in-house proprietary data set that other companies don't have access to. Grok brings the brains, X brings the distribution, he posted. OpenAI has the brains and brand distribution, e.g. Apple, but lacks X's proprietary data, long-term edge, XAI, end quote.
Bloomberg intelligence analyst Mandeep Singh wrote Friday that XAI's acquisition of X could set a framework for deals involving other social networking companies. The deal... Might be a sign that rivals including OpenAI, Anthropic, Perplexity, and Mistral will pursue deals to enhance their consumer reach and distribution, Singh wrote. We believe smaller social media players will actively seek alliances with providers of large language models, given the premium valuation for XAI.
$80 billion, which is more than the combined market values of Snap, Pinterest, and Reddit." Amazon's AGI lab this morning unveiled Nova Act, a general-purpose AI agent that can control a web browser and independently perform some simple actions, quoting TechCrunch.
Nova Act, developed by Amazon's recently opened San Francisco-based AGI Lab, will also power key features of the company's upcoming Alexa Plus upgrade, a generative AI-enhanced version of Amazon's popular voice assistant. The version of Nova Act available starting today...
is a little less polished, however. Amazon is calling it a research preview. Developers can access the Nova Act toolkit on a new website, nova.amazon.com, which also serves as a showcase for Amazon's various Nova Foundation models.
Nova Act is Amazon's attempt to take on OpenAI's operator and Anthropics computer use with general-purpose AI agent technology of its own. Several leading tech companies believe AI agents that can navigate the web for users will make today's AI chatbots significantly more useful. Amazon may not be the first to develop this sort of agentic technology, but via Alexa Plus, it may have the widest reach, end quote.
The new SDK is apparently designed to let developers build AI agents that can handle simple user tasks like reserving a table or ordering food from Sweetgreen. The toolkit equips agents with the ability to browse websites, fill in online forms, and interact with elements like calendars. As mentioned, this release marks the first public product from Amazon's AGI Lab, an internal initiative led by former OpenAI researchers David Luan and Pieter Abiel.
Before joining Amazon last year to head its AI agent work, Luan founded the startup Adept, while Abil co-founded Covariant. Amazon says, Nova Act has shown strong results in internal performance tests beating rival systems from OpenAI and Anthropic. On the ScreenSpot Web Text Benchmark, which assesses how well an AI handles on-screen text, Nova Act earned a 94% score. That's higher than OpenAI's Kua at 88%, Ananthropic's Claude 3.7 Sonnet, 90%. However...
Amazon has yet to put Nova Act through broader, more established agent benchmarks like WebVoyager, leaving some questions about how it stacks up outside its own testing environment. But back to Elon news, sources are telling the journal about increasing tension between Apple and Elon Musk's SpaceX. over expanding satellite cell phone services. Apple had discussed linking iPhones to SpaceX satellites, you might recall, at least that was the rumor. Quote,
To build capacity, the companies are competing for valuable spectrum rights, airwaves to carry their signals, which are in limited supply. Apple's outer space investments have drawn Musk's ire. People familiar with the matter said, SpaceX has pushed federal regulators to stall an Apple fund.
satellite expansion effort. The conflict intensified in recent months after SpaceX and its partner T-Mobile sought Apple's cooperation to offer Starlink on iPhones, some of the people said. The companies engaged in tense discussions and eventually reached an agreement that allows the SpaceX and T-Mobile
mobile satellite cell phone service, which will debut this summer to appear seamlessly on newer iPhones. Apple retains tight control over the iPhone's largely closed software ecosystem. Offering greater connectivity in hard-to-reach areas could spur more iPhone sales or greater adoption.
of SpaceX's Starlink. In some ways, the companies need one another to pursue their respective strategies. Globalstar, Apple's partner in offering satellite service, has hired SpaceX to launch the satellites that provide Apple's off-the-grid connectivity to phones. And SpaceX and T-Mobile need...
Apple's help to ensure their product is easy to use on the iPhone. Apple and SpaceX executives have had on and off again conversations about directly linking iPhones with SpaceX satellites, but no such deal materialized.
SpaceX, through its Starlink operation, has access to far more satellites than Apple, and industry leaders believe GlobalStar alone won't be able to satisfy the iPhone maker's needs. Apple has held talks with other satellite providers over the years to secure more spectrum. People familiar with those discussions... said. It explored investments in the Colorado-based satellite operator EchoStar to provide more satellites and spectrum to support iPhone connectivity, the people said, end quote.
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The initiative is called Project Mulberry, and it involves a completely revamped health app plus a health coach. The service would be powered by a new AI agent that would replicate, at least to some extent, a real doctor. Development is now full steam ahead with a release due as early as iOS 19.4. That update is scheduled for spring or summer of next year. The idea is this. The Health app will continue to collect data from your devices, whether that's the iPhone, Apple Watch,
earbuds or third-party products. And then the AI coach will use that information to offer tailor-made recommendations about ways to improve health. The company is currently training the AI agent with data from physicians that it has on staff. Apple is also looking to bring in outside doctors, including experts in sleep, nutrition, physical therapy, mental health, and cardiology, to create videos. Apple is opening up a facility near Oakland, California that
will let the physicians shoot their video content for the app. It is also seeking to find a major doctor personality to serve as a host of sorts for the new service, which some within Apple have tentatively dubbed Health Plus. Food tracking will be a particularly big part of the revamped app. That's an area that Apple has mostly avoided so far, though the current health app does let you enter data for things like carbohydrates and caffeine.
Going big on food tracking would mean challenging services such as MyFitnessPal and, to some extent, weight management apps like Noom. The doctor-like AI agent will help users with the nutrition features as well. Apple is also working on features that would tap into the cameras on the devices such as the one on the back of an iPhone.
The idea is to let the AI agent study users' workouts and give pointers for improving their technique. This could eventually play into other Apple services, including the existing Fitness Plus platform. The project is the priority of Sumble Desai, a doctor who has run... Apple's health team for several years. Jeff Williams, the company's chief operating officer, is also heavily involved. The work is a top priority and almost the entire focus currently of Apple's health group.
Desai is looking to avoid prior flops suffered by the division, such as a failed app for pairing users with doctors to answer simple medical questions, end quote. Finally today, Bloomberg is making the assertion that Ethereum is struggling to keep the interest of investors and developers, having fallen out of step of an industry transformed by the embrace of Donald Trump.
Ethereum is still the second biggest cryptocurrency, with all outstanding Ether worth some $225 billion. But Ether has fallen about 44% in 2025, poised for its worst quarterly drop since the bear market in 2022. Over the past year, while Bitcoin is up 30%, Ethereum is down 45% and it is losing its lead over competitors. The active developers working on Ethereum-related software fell about 17% last year according to a December report from Electric Capital.
By contrast, Solana, the digital token that has been the most direct rival to Ethereum and the host to many popular meme coins, including Trump's, was one of the top ecosystems for new developers in 2024 with 83% year-over-year growth. Standard chartered analysts put out a report this month slashing its year-end forecast for Ether by 60%, noting that its dominance has been waning for some time due to something of an identity crisis.
The ledger or blockchain underpinning Ethereum was designed so that it could handle digital contracts and serve as the infrastructure for a host of decentralized digital applications. Investors bought into that vision and Ether skyrocketed during the crypto booms of 2017 and 2020.
as developers built thousands of applications on top of the blockchain, ranging from silly cat games to more wonky prediction markets and lending programs. Ethereum gained such a following in part because of founder Vitalik Buterin's idealistic, often... gnomic pronouncements and his methodical oversight of the software and network.
While it was a hotbed for rampant speculation, Buterin himself showed little interest in material wealth and lived out of a backpack despite owning a stash of Ether tokens that has grown to be worth hundreds of millions of dollars. His monkish identity has been less of a good fit in the new environment ushered in by the president.
After Trump embraced crypto and pushed the government to begin holding tokens, the leaders of many projects rushed to donate and otherwise show support for Trump, with many attending the inauguration and posing for photos with the president. Buterin, in contrast, has kept a steady distance. Just after the inauguration, he said on social media that he had no interest in making the sort of vibes pivot to what he referred to as the bronze-aged mindset.
The hyper-masculine philosophy has become popular with both crypto enthusiasts and the Trump crowd. The clash became most apparent after Trump and his business associates issued the Trump meme coin, which began spinning off millions in fees.
Buterin quickly took to X to slam, quote, politician coins as a perfect bribery vehicle and risky to democracy. Now the most powerful people in the world are cheering on the idea of anyone creating tokens for anything at any scale, he wrote. Buterin and Ethereum have, not surprisingly, been far from the action as Trump has moved forward with his efforts to create a more friendly environment for cryptocurrencies in Washington. Buterin and his community were conspicuously absent when Trump
brought together several industry leaders at the White House for a summit in early March. The son of Steve Witkoff, one of Trump's closest business and political associates, tried to reassure the Ethereum community that he would represent their interests at the event. Ethereum's lack of a strong voice in Washington is a
result of Buterin's longer-term push to make the network and the community as decentralized as possible to stay in tune with the original ideas that gave rise to Bitcoin and Ethereum. But what used to be viewed as a strength has become a liability. Vivek Raman.
A cryptocurrency researcher and executive said the new environment created a difficult playing field for Ethereum, which has been very neutral. I think part of the criticism is people expected Ethereum, which is, like the internet, a decentralized network, to step up and be involved in politics and be involved with institutions.
institutions. And that is literally not really possible, Raman said. The problems for Ethereum, though, are not just a matter of politics and lobbying. Not long ago, Wall Street was abuzz with talk about the lending and trading programs being built on Ethereum that were supposed to create a more seamless, efficient financial system. system, the so-called DeFi movement. While critics have questioned the real-life utility of these applications, some have gained traction.
The most notable success has been stablecoins, the asset-backed tokens like Tether and USDC that move across national borders on blockchains while avoiding the volatility of cryptocurrencies. Most popular stablecoins operate on Ethereum in some form.
But problems have plagued the push to build what is referred to as Web3, a new, more decentralized and privacy-focused version of the internet. These applications have been slow to take off, and to the degree that blockchain projects have caught on, it has often been for speculative tokens tied to internet memes. In this realm, the most popular new projects, such as Trump's meme coin, have chosen Solana, which offers faster transaction times and
cheaper fees. Solana had almost twice as many active addresses as the Ethereum ecosystem in February, and more than five times as many transactions according to data compiled by the cryptocurrency company Grayscale. There's a practical reality. People want to go where
they feel there's growth, said Jill Gunter, chief executive officer for Ethereum developer Espresso Systems. That's been a challenge for Ethereum when the whole community for a very long time dismissed any kind of a focus on price, she said, end quote. So I was at a fifth grade birthday party this weekend, and I've got bad news for Warner Brothers. All of the fifth graders were savagely negative about that forthcoming Minecraft movie with Jack Black.
something about it looking stupid and the blending of live action and animation being a bad idea in their almost universal and very straightly expressed opinions. Now, it sounded like they may go see the movie anyway, but if you've lost 10-year-olds, I don't know. Talk to you tomorrow.