The recent merger between Elon Musk's X (formerly Twitter) and xAI highlights a concerning trend in corporate governance and consumer protection in America. This $33 billion deal, announced casually on a Friday evening, exemplifies how traditional regulatory oversight has become optional for powerful tech companies.
The deal's structure raises multiple red flags that would typically trigger regulatory scrutiny. Morgan Stanley represented both companies while simultaneously being the lead debt holder - a clear conflict of interest. No independent boards evaluated the deal, no competing bids were sought, and minority shareholders appeared to have little say in the process.
Yet despite these issues, the merger proceeded without meaningful regulatory intervention. This mirrors the dismantling of net neutrality protections in 2017, which marked an early signal of weakening consumer safeguards in the tech sector.
The valuation methods used in the deal underscore this regulatory vacuum. xAI, barely two years old, was valued at $80 billion with little substantiation beyond market hype around artificial intelligence. Meanwhile, X/Twitter's $33 billion valuation appeared reverse-engineered to make the numbers work.
This merger represents more than just another corporate deal - it demonstrates how traditional financial and regulatory guardrails have become optional for powerful tech leaders. Where regulators once demanded transparency and protected minority stakeholders, they now appear powerless or unwilling to intervene.
The implications extend beyond this single transaction. As tech companies grow more powerful and concentrated, the erosion of meaningful oversight threatens both market fairness and consumer interests. The death of net neutrality was just the beginning - we're now seeing the full impact of weakened federal consumer protections play out in real time.
This new reality suggests a troubling future where corporate governance becomes increasingly performative rather than protective. Without renewed commitment to robust oversight, consumers and smaller market participants risk being left unprotected in an increasingly consolidated tech landscape.