Jackson Jambalaya

Where did the Elon Musk money go?  JJ reported Monday how SpaceX accused its contractor for the Memphis data center projects of bilking the Musk company up to $800 million while buying up racetracks and the International Hot Road Association.  Stephen Cole Smith published a very thorough story on the Hagerty Insurance website about how the contractor, Darryll Cuttell took down IHRA as he imploded, all the while blaming his problems on SpaceX.  Earlier post.  Smith reported: 

Ten owners, 10 attempts to elevate the second-tier IHRA to racing relevancy that might possibly rival the dominant, 75-year-old National Hot Rod Association (NHRA): The current unpleasantness is the most sport-shattering misfire of them all, as the IHRA’s current owner is blaming, by name, the richest man in the world.

Really? Elon Musk is responsible for the collapse of IHRA drag racing?

So says Darryl Cuttell, 61, who bought the IHRA in December of 2024....

Cuttell, himself a master electrician, is the owner of 30-year-old Darana Hybrid, an Ohio company that describes itself as, “a Native American owned and operated international electro-mechanical contractor,” an acknowledgement of Cuttell’s membership in the Tuscarora Nation. In 2024, Darana Hybrid was the lead contractor on Musk’s new data center in Memphis, Tennessee, which Musk calls his “Colossus.”

Musk wanted contractors who would complete Colossus now—he needed massive computing capacity to train the company’s Grok large language models. Most contractors said Musk’s timeline was impossible, but Cuttell and Darana Hybrid signed on. Elon Musk and his company, xAI, say that Colossus was completed in just 122 days. Cuttell says 123. It is not the only thing Musk and Cuttell disagree on.

The $1.25-trillion merger earlier this year between Musk’s Space X and xAI, Cuttell said, was when the problems began. xAI promptly paid the invoices Darana Hybrid sent in. Space xAI, now the curator of Colossus and its data-center siblings, hasn’t. Musk’s properties, including Tesla and The Boring Company, have earned a slow-pay reputation that may or may not be warranted. “It’s what Elon does. He goes out and takes on the small guys and just buries them,” Cuttell told WMC, the Memphis NBC affiliate. “I’ve never been treated so unfair for doing such a good job. That’s the worst part. I overextended myself, gave him everything he wanted, and now I’m getting trashed.”

Typically, Musk and his companies ignore critics. Not this time. Last Thursday, Space xAI filed a federal suit against Darana Hybrid, and the 40-page complaint is just brutal. And if you were wondering what drag racing and the International Hot Rod Association had to do with all this, here it is: Along with Cuttell himself, the IHRA is actually named in the suit. That suit alleges that Darana and Cuttell overbilled Space xAI “by hundreds of millions of dollars while selling out their own suppliers and subcontractors along the way,” and “diverted money to Cuttell’s personal side projects,” which would be the IHRA, the dozen or so racetracks he bought both before and after that acquisition, and a peculiar list of other competitive sports leagues he purchased, including a snowmobile racing series, 10 classes of jetski racing, at least five truck and tractor pulling leagues, 32 classes of Inshore and Offshore boat racing, drag boating, Formula 1 boat racing, and finally, “rodeo and bull riding.” Almost overnight, the IHRA went from being almost out of business to sanctioning 137 different classes of competition.

Among those sanctioning classes was an oval track stock car series which only lasted for a handful of races before the IHRA pulled the plug. That parallels one of Cuttell’s most puzzling purchases: Rockingham Speedway, the (almost) one-mile oval track in Rockingham, North Carolina, in the middle of NASCAR country....

Now, though, it sounds like there’s very little left of the money Cuttell was paid. He told the Daily Memphian that he owes $200 million to vendors and isn’t sure how he will pay them. Presumably that’s in addition to what he owes drag racers and support staff, as well as purses for the other non-drag racing series he bought, plus the notes and taxes due on his racetracks....

By most accounts, Cuttell did very little negotiating for the tracks he bought, often paying well over market value. Freeman said Cuttell bought the long-dormant Heartland Motorsports Park in Topeka, Kansas, for $40 million. “Two years ago,” Freeman said, “I could have bought that place for $6 million.”...

Aside from possibly overpaying for the tracks and series he bought, Cuttell offered race purses that were far richer than the IHRA could ever pay, in any of its nine previous incarnations. In April, I wrote about this particular IHRA’s last gasp, the IHRA Triple Crown. Which turned out to be the Just-One Crown, as the last two legs were cancelled, and racers haven’t been paid for the first leg, with some owed six figures....

Up until then, the money Cuttell was spending was nothing short of astounding, much to the delight of the long-suffering, IHRA-faithful racers. Besides the big purses, he provided multiple perks for all of the competitors, their families and crew members, including free dinners and free deliveries of ice in the morning.

Cuttell typically arrived in style, aboard a newly acquired helicopter or in the Darana Hybrid private jet, a Bombardier Challenger 300 with VIP seating. Once, he sent his jet to pick up drag racing pioneers “Big Daddy” Don Garlits, 94, and his longtime nemesis, Shirley Muldowney, 86, for a personal appearance at an IHRA track. Pro racers were impressed. Sportsman racers—those who do it primarily for love, not money—felt like they’d died and gone to heaven. By mid-season, they changed their tune and figured they’d only got it half right.

Garlits says he is still owed the $5000 appearance fee he was promised....

In January, when he appeared in Memphis to announce his purchase of the moribund Memphis Motorsports Park, Cuttell visited St. Jude Children’s Research Hospital and gave the administrators a check for $10 million. He said there would be more....

So the IHRA is effectively done. Again. There’s nothing left. So many people and companies have not been paid, including the racers who won in that first and only Triple Crown event. Tracks have not been paid. Emergency workers and concessionaires, most all of which fronted the money it took to get to the races and stay for the duration, are out that investment. At last word, the production company that provided the free, high-quality live digital feed of the major races hasn’t been made whole and is owed well into six figures. Even some of the companies that rented Cuttell the mandatory Ferris wheels that spun lazily over every major IHRA event are left standing in line.... Read the rest of the article. There is much more information.