A Cover Story for xAI

Oh… not another tech “partnership” press release…

They’re a dime a dozen.

Most are nothing but marketing fluff – with no substance or actual investment behind them.

They’re designed to give the appearance of something far more substantive happening and to increase the credibility of one or all parties involved.

For those of us who have worked in industry for decades, we can pick these out in seconds. They’re easy to spot.

But it really doesn’t take much for someone with little to no experience to figure it out.

It can be easily done by asking a few specific questions:

• Is there a clear business model between the related business parties as part of the announcement?
• Have the parties involved invested funds in the partnership or joint venture?
• Have the parties involved developed a new product that will be sold or licensed?
• Have the parties involved integrated technology from each of their businesses into one, cohesive offering that can be licensed or sold?

If the answers are no, it’s marketing fluff. There’s no substance to it. It’s not newsworthy, and it certainly shouldn’t positively influence our outlook on a company’s share price.

And this was immediately what I thought when I saw a press release recently…

No Sense at All

It was titled: “xAI, TWG Global and Palantir Unite to Redefine Financial Services through Enterprise AI.”

Immediately, it made no sense whatsoever.

And the deeper I dug, the worse it got…

• xAI, as my readers know well, has built a best-in-class frontier AI reasoning model.
• xAI, through its acquisition of X, now owns a subsidiary company, X Payments LLC, which is registered with FinCEN and has now received a license to transmit money in 43 states. For anyone curious to keep tabs on xAI’s progress on those licenses, they are publicly published here.
• Palantir’s core moat is really around providing artificial intelligence and machine learning to the U.S. government and its intelligence agencies, as well as defense and intelligence agencies of U.S. allies (i.e., its strategic moat has nothing to do with financial services).
• Palantir has developed an enterprise AI product, but it is not targeted at financial services. It’s primarily used for a wide range of industries. In its SEC filings, it highlights utilities, automotive, oil and gas, pharmaceutical, supply chain, and health administration as key areas of enterprise focus.
• And whatever small portion of its enterprise business is related to financial services, it is designed for governance and augmenting decisions with artificial intelligence and machine learning.
• In Palantir’s first quarter 2025 earnings call held on May 5, there wasn’t a single mention of its enterprise business as it applies to financial services, nor was there a mention in the shareholder’s letter, or even the earnings call presentation.
• If anything, in the May 5 business update, the focus was on Palantir’s defense business and the clear trend that is firmly underway – re-industrialization of America – which was highlighted in a slide from the update shown below.

Palantir Q1 2025 Business Update | Source: Palantir

And those things aren’t the strangest part about the announcement.

The weirdest part about the press release was the involvement of TWG Global, supposedly an AI firm.

TWG Global didn’t even exist several months ago.

“The Money”

Consider this:

• TWG Global was recently established by two billionaires in the process of raising $15 billion to acquire and invest in artificial intelligence firms “across the financial services, sports, and defense sectors.”
• Seed funding for TWG Global appears to have come from Mark Walter, Chief Executive of Guggenheim Partners, an asset management firm with more than $345 billion of assets under management, and Thomas Tull, the former chairman and chief executive officer of Legendary Entertainment, a film production company. Neither one of them has any actual experience in technology or artificial intelligence, or, for that matter, any operating experience in a technology company. They’re simply known as “the money.”
• TWG Global is simply a holding company for the assets that it acquires, and nothing more. It’s not a tech firm, it has no technology products, and it doesn’t sell or license artificial intelligence or any “financial services” products as we would understand them.
• TWG Global has taken in $10 billion from Mubadala, the sovereign wealth fund of Abu Dhabi, and TWG has in turn taken 5% of the equity in Mubadala. The knot has been tied.

What?

Palantir and TWG are not the companies to redefine financial services.

And Elon Musk is the wealthiest person in the world, and the most incredible technology builder in a generation. He doesn’t need the money or Palantir’s tech support. Musk and his team of choice would run circles around them.

If this was really about “redefining financial services,” Musk would either go at it alone with xAI, or partner with an existing disruptor that already has a large footprint in the banking system, some company that would provide immediate access to financial services technology systems.

And not to mention that Musk has a grand vision for X and consumer payments, not enterprise financial services, which he started over two decades ago with PayPal. That vision is X Money, and I cover that whole incredible story here.

And as for TWG, the press release states that they’re lending their “operational expertise” to the partnership. Expertise in what? It’s a holding company, not an operating company. Its purpose is to allocate the capital of its limited partners. Not to mention, of the two co-chairmen, one is an asset manager and the other is a film producer.

If you’re like me, the more you hear about this announcement, the less it makes any sense. Perhaps no sense at all…

And if you’re up for a laugh, and a painful experience, have a listen to this 10-minute CNBC interview from May 6, conducted with Palantir CEO Alex Karp and TWG Global Co-Chairman Thomas Tull – you can view it here.

Source: CNBC

Nothing but fluff, corporate speak, and tech babble.

There was zero specificity about what the partnership was all about.

They provided nothing the entire 10 minutes…

Normally, after an experience like this, I’d drop something like this quickly. But the involvement of Palantir and xAI, thus Musk, with potentially big money in play, was worthy of some deeper thinking.

There just might be something much bigger going on.

This next part is just me connecting the dots, but my gut tells me the announcement was just a cover story…

A smokescreen for something they just couldn’t talk about openly.

W.W.U.S.D.? (What Would Uncle Sam Do?)

Let’s think about what we have here:

• The leading frontier model in reasoning AI models, soon to be agentic, designed as a maximum truth-seeking AI – that’s xAI. Palantir has nothing like what xAI has. No comparison.
• Palantir’s artificial intelligence and machine learning systems are tied into the entire U.S. defense and intelligence industry and that of its allies.
• $10 billion of money from Mubadala – Middle Eastern money from the UAE.
• And after some digging, I found that Thomas Tull took some of his money earned in film production to establish a multi-billion, very low-ley venture fund known as the U.S. Innovative Technology Fund. Its website will have you scratching your head as there is nothing there. And yet, the fund invested heavily in AI and defense tech companies like SandboxAQ (cross-section of AI and quantum computing spun out of Google), Shield AI (AI-powered defense tech), Anduril (AI-powered defense tech), Saronic Technologies (autonomous surface vessels), Lambda (cloud-based AI solutions), Celestial AI (AI computing platform and data center tech), and Pryon (tech for accelerating AI adoption).

Now, while the above bullets should have your head spinning right now with possibilities, there is one critical piece missing from the story.

And it’s all about a prediction that I made months ago…

xAI will be the first company to invent an artificial general intelligence (AGI). And it will do so within 12 months.

Under that assumption, it all makes sense.

This isn’t about redefining financial services.

Achieving AGI first is a matter of national security for the United States.

And the moment it happens, what will the U.S. government want to do?

It will want to implement AGI in its defense and intelligence agencies as quickly as humanly possible.

And it will want to extend at least a subset of that technological capacity to its allies around the world.

Tying a New Knot

Here’s what the parties will actually bring to the table:

• xAI will bring both agentic AI and AGI.
• Palantir has all the “hooks” into the allied defense and intelligence systems and databases around the world.
• TWG Global had hundreds of billions of dollars of “connections” and influence around the world through Guggenheim, as well as large equity positions in some of the most important private defense tech and AI companies through Tull’s venture fund.

But we have to pause a moment to consider the current reality we live in:

96% of press coverage of Elon Musk is negative. 92% of the press coverage of Trump is negative. 100% press coverage of Secretary of Defense Pete Hegseth is negative.

There is no way President Trump could announce that the U.S. would adopt xAI’s AGI to protect the U.S. and its allies, given the way the wind blows.

Can you imagine the uproar?

Feeding the U.S. government’s – and its allies’ – most sensitive data to xAI’s AGI?

Musk couldn’t even enter a federal building without spurring riots in the streets.

How do we think “the U.S. government is partnering with xAI” would go?

The truth wouldn’t matter at all. No one would hear it.

Something big is underway, and while this announcement appeared to be nothing but fluff, it’s actually an indication that xAI is making as much progress as I have been predicting it would.

Disguising xAI in this emprise partnership for financial services to give xAI access to all of those “hooks” that Palantir has in defense and intelligence is a very clever play. It made everyone yawn and move on to the next story.

This is clearly bullish for the three companies involved. xAI and TWG Global are private. Palantir (PLTR) is public, however, my analysis is not to suggest investing in Palantir. The company is trading at a $284 billion valuation, which represents 73 times 2025 forecasted sales. Seventy-three times sales and 162 times forecasted EBITDA!

Palantir is a fantastic company that is growing ridiculously fast, but nothing even close to justifying those kinds of valuation metrics.

We’re so much closer to AGI than anyone thinks. The implications are just incredible. And you can rest assured that you’ll be the first to hear about them in The Bleeding Edge.

Jeff