Elon Musk's AI startup reportedly in talks for $40 billion valuation

• It also comes as Google reported blowout earnings, which means it may not be the AI pushover that many in Silicon Valley had come to believe.

The big variable: Musk has been promised a "cost-cutting" role in a prospective Trump administration, kind of akin to what Charles Grodin did in the movie "Dave."

• This all might be a campaign lark, particularly given Musk's fuzziness on the math, but at some point the multi-company CEO will be stretched too thin. And that could create added risk for xAI investors, particularly at a $40 billion mark.

The bottom line: These deals are structured like venture capital, have missions similar to project finance, and are valued like large-cap private equity.