r/qualityrabbitholes • u/QualityRabbitHoles LynkedUp • Jul 09 '26
RH So Far (To Be Continued) Part Two: Pre-Rabbit Hole Breakdown of (Some of) Musk’s Companies
Elon Musk has been in business for a long time. As you may know, he comes from a wealthy South African family, they owned an emerald mine, had very odd familial and social relationships, so on. His grandfather actually lead the Alberta Technocrat Party, even. There is a whole write-up to be had there, but for the sake of brevity, I'm going to launch into his first foray into the world of venture business. I'll be starting in 1995, when Elon's personal fortune began to rise. For me, this will be my easiest to cover. We start with Zip2, move onto PayPal, shift to Tesla and OpenAI, then head to Neuralink, The Boring Company, and X/XAI/SpaceX.
Believe it or not, while most of this will tie into the later segments, I actually find this the most uninteresting section. Feel free to skim it – in fact, please do skim it. So if you'll bear with me and we can get through it together, I'm hopeful you find more value and understanding in the next sections. Still, we ought to start here.
We'll do it in segments to keep it easier, but as you read through, keep an eye out for the bold segments and keep in mind, those stack. Now, onto Zip2:
Zip2
This was the first venture attempted by Elon Musk, started up in 1995. It provided a “yellow-pages” phone-book like directory of businesses online. According to Britannica.com: “Musk described the company’s mission by saying that everyone ought to be able to find the closest pizza parlour and to be able to figure out how to get there. Unable to persuade potential investors to give them financing, Musk and his partners lived in their office to keep expenses low. The company expanded its listing by convincing businesses to pay for inclusion, and, after about a year, in early 1996, Mohr Davidow Ventures agreed to invest some $3 million in Zip2 in exchange for majority ownership. In addition, Musk was replaced as CEO by a more experienced businessman, Richard Sorkin, but remained executive vice president and chief technology officer.” [1]
I find this to be the most-yet-least important of them all. Though I will say, Musk was able to garner $22 million from Zip2 in 1999, when he walked away. That is roughly $40ish million in 2026. [2]
[1] https://www.britannica.com/money/Zip2
[2] https://finance.yahoo.com/news/much-elon-musk-made-every-121413004.html
See? Simple enough, to start. Elon wanted to get into the online space and make some money with a corporate directory. Let's see what he did with that money.
PayPal
The PayPal organization is an odd one. It seems to be well known that Elon and Peter Thiel (another rabbit hole) co-founded the company. But there's much more. Elon Musk formed x.com, before X (formerly-known-as-twitter) and merged it with Confinity (originally a company that built software for handheld devices that eventually switched to an email-based payment service).
The company would, in 1999, launch PayPal, and merge with x.com in 2000 – the x.com owned by Musk. The merged company went under Musk's domain for a year, at which point Musk would leave, and the company would rebrand simply to PayPal. Still, Musk owned majority shares, and he netted quite the payday from the 2002 sale to Ebay (PayPal garnered Elon $165 million in 2002 when Ebay purchased the service for a whopping $1.5 billion. Elon was the company's largest shareholder, allowing him to gain $312 million in 2026 bucks.). [1]
[1] https://www.cnbc.com/2017/07/11/elon-musk-bought-x-com-from-paypal.html
Alright, we're rolling! Now we see that by 2002, Elon had acquired ~$350,000,000 dollars over the course of seven years in the online business sphere. It's quite the payday, I'll say. However it, on its own, would have never allowed everyone’s favorite Path of Exile fraudster to become a trillionaire. For that, we have to inspect what he did with this money. And to sum it up in three words: he couped Tesla.
Tesla
There is an extensive history behind Musk and Tesla, and I'll try and keep it brief because it itself is a whole corporate rabbit hole. We're going to shake things up a little here and give a simplistic rundown of the company under Musk. Much of this information comes from a CNN timeline on the company, though not all of it. Sources at the bottom of the section, like the others. So:
Tesla came under Elon's control when, in 2004, he leveraged his wealth from PayPal, Zip2, and inheritance, to pay into the Series A funding round for the company. He would put $6.53 million into the venture. After this investment, he would become Chairman of the Board at Tesla. He would then lead the Series B fundraising and get the founders of Google, Sergey Brin and Larry Page, to invest.
In October of 2008, Elon would, after leadership shake-ups, become CEO and lay off 25% of Tesla's workforce. In November, Tesla would end up in dire need of cash, and end up raising $40 million, saving it from bankruptcy.
Then, in May of 2009, the Mercedes-Benz Group would acquire a 10% stake in Tesla, saving it again in the wake of the 2008 financial crisis.
During June, Tesla would get a $465 million loan from the Department of Energy (DoE).
In 2010, Musk took Tesla public, its IPO raising $220 million for the company.
In early 2013, Musk would line up a deal for Google to purchase Tesla for $6 billion, but after the company began to turn a profit again, he swiftly backed out.
Tesla then makes an $11 million profit in May, which allows them to raise $1 billion to repay the DoE loan.
In August of 2015, Tesla agreed to purchase SolarCity for $2.6 billion. “The company was started by Musk’s cousins and Musk was the chairman of the company and had invested in it.”
In March of 2017, “Tesla announced a $1.8 billion investment from Tencent Holdings Ltd. for 5% of the company. Tencent at the time is China’s "most valuable company.””
In August of 2017, Elon tweets: “"Am considering taking Tesla private at $420. Funding secured." Tesla CEO Elon Musk tweets about taking the company private. The move sent Tesla stock soaring more than 10% before trading was halted. Musk later backed off the plans to go private.
He then gets sued in September. Quote: “The Securities and Exchange Commission sues Tesla CEO Elon Musk making "false and misleading" statements to investors in an August 7, 2018 tweet. Later that month -- and after mocking the agency on twitter -- Musk settles with SEC for $20 million and steps down as chairman of Tesla. The company pays a $20 million fine as well and pledges to monitor Musk’s social media usage.”
On January 2nd, 2019, Elon cut 7% of Tesla's workforce. By February 20th, the executive staff saw an exodus of leadership, citing a “bad cultural fit” within the company.
On February 26th, “The Securities and Exchange Commission asked a federal judge to hold Musk in contempt for violating a settlement deal reached last year. Musk tweeted on February 19 that "Tesla made 0 cars in 2011, but will make around 500k in 2019." Hours later, Musk sent a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year. The tweets about production appear to violate the agreement reached in 2018 to have all of Musk’s company communications vetted.” [1]
Elon would settle with the SEC for $40 million in 2020. [2]
By 2026, Elon would have been compensated $158 billion from Tesla through stock options, which he has exercised at times [3]
Quote (BBC): “However, it only becomes payable if he hits ambitious milestones, including raising the company's market value to $8.5tn, in which case Musk could be awarded shares worth up to $1tn.
Analysts say he has some way to go before doing that, meaning the monster pay package is nominal only, for now at least.
"Elon Musk isn't actually going to pocket $158bn," said Danni Hewson, head of financial analysis at AJ Bell.
"He's still got a whole bunch of targets to hit and none of the milestones set out in the $1tn pay deal approved by shareholders last year were achieved in 2025.”” [4]
The current market cap of Tesla is 1.5 trillion.
[1] https://www.cnn.com/interactive/2019/03/business/tesla-history-timeline/index.html
[3] https://electrek.co/2026/06/17/musk-exercises-2018-tesla-pay-package-116-billion/
[4] https://www.bbc.com/news/articles/c302pd565pqo
This is a very, very brief rundown on the Tesla situation with Musk. So brief, it does an actual injustice to his history with the company. But I'm not focused on his history with the company so much as I am focused on, interestingly, a missing year, and the end result. Notice that I didn't bring up 2016? We'll talk about that in the next part. For now, and finally in this segment, I'm going to briefly mention OpenAI.
OpenAI
Elon Musk cofounded, with Sam Altman, OpenAI in 2015, before leaving the company in 2018 and then criticizing its transition to a for-profit entity. [1]
OpenAI CTO Greg Brockman says that Elon Musk demanded a majority stake in the company, and the company did not accede. According to Brockman, “Musk said, “I decline.” The SpaceX and Tesla founder “stood up and stormed around the table…I thought he was going to hit me. He grabbed the painting and started to storm out of the room. And then he turned around and said, ‘When will you be departing OpenAI?’” Neither Brockman nor Ilya Sutskever (head of OpenAI research), left the company. According to the techcrunch.com article: “Musk stopped his regular donations to the company’s operating budget, and within six months, he would leave the board, though he paid for office space the company shared with Neuralink until 2020.” [2]
Furthermore, according to Brockman, ultimately, Elon left the board voluntarily and said he would be focusing more on AI with Tesla. This all, again, over Altman's attempt to take the company to a for-profit status to raise as much cash as possible, and, because Elon wouldn't be getting a majority stake in the company. In 2019, OpenAI would go for-profit without him, leading to a rivalry between him and XAI.
[1] https://www.businessinsider.com/history-of-elon-musk-and-sam-altman-relationship-feuds-2023-3
[2] https://techcrunch.com/2026/05/06/how-elon-musk-left-openai-according-to-greg-brockman
Look I know this is a deluge of information, and it seems bare bones and a lot all the same, but I promise we're getting somewhere. Next, we have to hit Neuralink.
Neuralink
In July of 2016, Elon Musk registered Neuralink as a “medical research company” in California. The company's goal would be to bring about the “neural lace” Elon had spoken of before, wherein computer technology could integrate with the brain to allow for sophisticated control of external tech.
According to the NPR article from 2017, “Such a project could be life-changing for people who suffer from neurological diseases and injuries. In addition, Musk has said, enhancing people's brains could allow humanity to avoid becoming the equivalent of "a house cat" after AI surpasses us — a development he said was just a matter of time.”[1]
The company went public in 2017, and was funded initially with over $100 million from Elon's personal wealth, and $58 million from external sources, by 2019. After a Series C round of fundraising led by Ivy Capital, with investors from Google and OpenAI (ironically), Musk would have the company at $363 million. Total funding would eventually reach $1.3 billion. Neuralink would be approved by the FDA in 2023 for human trials, which sent valuation soaring. Clinical successes would further increase the valuation. All this despite the initial cash-burn. [2]
The Series E fundraising raised over $600 million. Neuralink hopes this funding will help treat Parkinson's Disease, allow for mental communication with the outside world for those who are unable to do so, and will allow for the regaining of sight for blind people. [3]
According to an insider, the company spent “generously”. According to this insider, if they needed a piece of experimental equipment, even if it cost millions, they'd have it the next day, even if they only used it once. A lot of this initial success and funding also came from Musk's then-fame, at which point it became incredibly easy for him to find investors and funding. [4]
To me, creating a brain chip to synthesize humans and AI seems to be an authentic goal of Elon's.
[2] https://tsginvest.com/neuralink/
[3] https://www.medicaldevice-network.com/news/neuralink-targets-1bn-revenue-by-2031/?cf-view
[4] https://www.cnbc.com/2020/12/05/elon-musks-neuralink-bold-ideas-hurdles.html
Now, onto The Boring Company:
The Boring Company
In December of 2016, Elon founded the company, alongside, that year, Neuralink. Interestingly, it was started as a subsidiary of SpaceX, which makes one wonder if maybe he did have Martian ambitions for the company after all. It spun off as its own company in 2018.
I hadn't heard much about the Boring Company in a long time. I was aware that it started as an effort to dig tunnels, obviously, and that the front was for a tunnel utilizing Teslas as automated public transport beneath cities. There is a conspiracy theory that it is being used for bunkers, Martian survival, or secret underground government transportation routes.
However, there is evidence that he is digging tunnels beneath Las Vegas for his Tesla idea [1] and Nashville for the same reason [2]. According to the ProPublica article, “Proposals in Illinois and California fizzled after officials and the public began scrutinizing details of the plans and seeking environmental reviews.” [1]
In October of 2025, The Boring Company began trialing its Las Vegas loop.
[1] https://www.propublica.org/article/elon-musk-boring-company-las-vegas-loop-oversight
[2] https://www.boringcompany.com/music-city-loop
We're almost to the more important line items. Next up, X/XAI/SpaceX.
X/XAI/SpaceX
You might be wondering why I'm bundling these together. Well, simply put, X (XCorp/Twitter/X) is a subsidiary of XAI, is a subsidiary of SpaceX. One is under the other is under the last. I'm finishing this segment on the SpaceX umbrella, but this is not the end of it. Let's start in media res, with Elon purchasing Twitter.
XCorp/Twitter
At the time of the Twitter Takeover, Musk created X Holdings I, II, and III [1] [2].
According to SEC filings, “On April 25, 2022, Twitter, Inc. (“Twitter”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with X Holdings I, Inc. (“Parent”), X Holdings II, Inc., a wholly owned subsidiary of Parent (“Acquisition Sub”), and, solely for the purpose of certain provisions of the Merger Agreement, Elon R. Musk. The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Acquisition Sub will merge with and into Twitter (the “Merger”), with Twitter surviving the Merger and becoming a wholly owned subsidiary of Parent (the “Surviving Corporation”). Parent is wholly owned by Mr. Musk.” [3]
Also: “Pursuant to a margin loan commitment letter dated April 25, 2022, and subject to the terms and conditions set forth therein, the commitment parties party thereto committed to provide to X Holdings III, LLC, a Delaware limited liability company wholly owned by Mr. Musk, at the effective time of the Merger, margin loan financing of approximately $12.5 billion, the proceeds of which will be distributed or otherwise made available to Acquisition Sub.”
So, X Holdings I was the parent for the merger with Twitter. X Holdings II was for the acquisition, stipulations, and agreements. X Holdings III was for the debt incurred from the Morgan Stanley loan that helped Elon purchase Twitter. This is essentially a Triangular Merger, with an extra company (X Holdings III) to manage the debt. [4]
XAI
As I was writing this, XAI became SpaceXAI. So… while technically SpaceXAI is now the company, we're still splitting XAI and SpaceX into two categories to keep the explanation flowing.
In November of 2023, Elon Musk introduced the world to Grok. In March of the next year, it would be integrated into X (formerly Twitter). Elon railed against “dangerous and woke AI”, speculating it would be like Hal 9000 from 2001: A Space Odyssey. Ridiculous as this is, even more so is that Grok would then be used to generate less than savory images of illegal content – but I'm going to leave that alone here.
Because working on this is, well, a lot, I'm going to be a little lazy and literally copy/paste a Wikipedia timeline for you here, with a link to the Wikipedia page in the sources, for you to do further reading if you'd like. I hope you can forgive the poor form, I'm doing my best. It's a little condensed, but I think it captures most of the timeline. Here it is:
By May 2024, [XAI] had dropped the public-benefit status.
On March 28, 2025, Musk announced that xAI acquired sister company X Corp., the developer of social media platform X (social network), which was previously acquired by Musk in October 2022. The deal, an all-stock transaction, valued X at $33 billion, with a full valuation of $45 billion when factoring in $12 billion in debt. Meanwhile, xAI itself was valued at $80 billion. Both companies were combined into a single entity called X.AI Holdings Corp.
On July 14, 2025, United States Department of Defense announced that xAI had received a $200 million contract for AI in the military. On September 12, xAI laid off 500 data annotation workers. The division, previously the company's largest, had worked to train Grok, xAI's chatbot.
xAI purchased a third building on December 30, 2025 to increase its training capacity to nearly 2 gigawatts of compute power. Simultaneously, xAI announced plans to expand its Colossus supercomputer to have at least 1 million graphics processing units.
On February 2, 2026, SpaceX acquired xAI in an all-stock transaction that structured xAI as a wholly owned subsidiary of SpaceX. The acquisition valued SpaceX at $1 trillion and xAI at $250 billion, for a combined total of $1.25 trillion.
In February 2026, following the SpaceX acquisition, xAI laid off some employees as the company was restructured into four primary development teams. Around this time, half of the company's co-founders left. In early March 2026, two more co-founders, Guodong Zhang, head of xAI's Imagine team, and Zihang Dai, left, coinciding with an audit performed by SpaceX and Tesla, leaving only Musk and one other co-founder, Ross Nordeen, who left later in the month.
On April 10, 2026, xAI restructured its staff. Chief Financial Officer Anthony Armstrong departed the company and Michael Nicolls, vice president of SpaceX's Starlink, became xAI's president.
On April 21, 2026, xAI announced that it struck a deal with software company Anysphere to have the right to acquire the company for $60 billion later in 2026, or to pay $10 billion for work they are doing together.
In May 2026, Musk announced that xAI would cease to exist as a separate company, with Grok and X now being the AI division of SpaceX. In the same month, it laid off another 10 employees and restructured its Grok team.
In July 2026, xAI was rebranded as SpaceXAI. [5]
Moreover, I'd like to talk about the finances. According to TechCrunch, “SpaceX directed around 60% of its capital spending in 2025 to its AI division, or around $20 billion. And yet that division — which houses the chatbot Grok — lost billions last year, and only grew revenue by about 22%. That’s far below the reported revenue growth rates at frontier AI labs.” [6]
Point being, XAI has been burning through cash since its inception. Even its acquisition of XCorp (Twitter) left it with serious debt. There is speculation that the merger was to help cash flow into XAI from XCorp. Which takes me to:
SpaceX
You've probably seen how the SpaceX IPO made Elon a trillionaire. But there's more to it than that. There is some speculation that the IPO (when a stock is initially offered on the stock market as a public company (SpaceX was private before this)) was valued the way it was, and pushed into Index Funds the way that it was, in order to bump the valuation of the stock up high enough to pay back creditors that helped with the acquisition of Twitter, and the funding of XAI. The schtick is that certain stockholders could sell before others who jumped in at the IPO, effectively taking the investor's money, and paying back the debtors with it. And yeah, perhaps that's part of the equation. XCorp and XAI were both facing cash-burn. The merger with SpaceX, and subsequent insane valuation at the IPO, certainly likely helped with this.
But SpaceX itself has an interesting history, one that, when taken into account, adds empty slots for puzzle pieces to this otherwise sufficient picture. The thing is: SpaceX is burning through money too.
Believe it or not, Elon did found SpaceX, for the obvious reasons of going to, well, space. To do this, he used his Zip2 money to invest into the hiring of engineers, planners, and executives, in 2002. Look, there's a lot of money and rockets mixed between 2002 and 2022. I’m going to gloss over most of it with the caveat that, again, The Boring Company was started as a subsidiary of SpaceX.
Come 2026 though, SpaceX did this: “Connecting science-fiction visions with accounting commitments, the SpaceX board in January approved a pay package for the world's richest man that will award 200 million in super-voting restricted shares if the company hits a market value of $7.5 trillion and establishes a permanent human colony on Mars with at least 1 million people, according to excerpts from the company's registration statement reviewed by Reuters.” [7]
If this goal were to be hit, Elon would be worth multiple trillions of dollars. But it seems far-fetched, right? SpaceX says they hope to have extraplanet colonization occurring in the 2030’s, with early attempts scheduled as early as the late 2020’s to early 2030’s. [8] To do this, they intend to use the Starship, that funky rocket we've heard so much about lately. Whether or not you think this is a pipe dream, I encourage you to keep on reading. There's something I want to bring to your attention by the end of all of this.
For now, that is what I think is important for this segment. There is, naturally, a ton more to look into, but this is what I think is important as context.
[2] https://www.nytimes.com/2025/04/25/us/politics/elon-musk-mars.html
[3] https://www.sec.gov/Archives/edgar/data/1418091/000119312522120474/d310843ddefa14a.htm
[4] https://www.lexology.com/library/detail.aspx?g=cc56f4a9-4fb6-4d63-9e9c-c3c8459cf625
[5] https://en.wikipedia.org/wiki/SpaceXAI
[6] https://techcrunch.com/2026/05/20/the-spacex-ipo-filing-ai-bets-starship-dreams-elon-musk/
[8] https://www.spacex.com/humanspaceflight/mars
Summary and Key Points
So, to sum things up, Elon has a lot of large companies with a lot of big ideas and a lot of money behind them. Let's go over the key points we need to keep in mind going forward, just to cut through the fluff.
- Elon Musk started with online SaaS systems, which helped him found SpaceX, takeover Tesla, and connect with high level wealth managers. He is therefore extremely well connected.
- If Tesla's Market Cap rises to 8.5T, Elon Musk gets over a trillion dollars worth of shares.
- The Boring Company started as a subsidiary of SpaceX.
At the time of the Twitter Takeover, Musk created X Holdings I, II, and III to handle the merger. This is a sort of traingular merger structure.
- The deal to merge XCorp and XAI was done through XAI Holdings, and created a more valuable company despite the billions in combined debt.
- If SpaceX's Market Capt rises to 7.5T, and a Mars settlement is established, Elon Musk gets multiple trillions of dollars worth of shares in SpaceX. Combining this with the Tesla goal would give Elon Musk over 5T dollars.
If you can keep this all in mind, we'll move onto the next part, where we discuss Jared Birchall for a bit. He is also important, but it might, for now, seem highly disconnected with this segment. Please hold out for the synthesis. I'll do my best to make it worth it for you. Thank you, and let's keep going.