Elon Musk’s artificial intelligence venture, xAI, has officially acquired his social media platform X, previously known as Twitter, in an all-stock transaction. The billionaire entrepreneur announced the groundbreaking deal in a post on X this past Friday.
“xAI has acquired X in an all-stock transaction,” Musk stated. “This merger values xAI at $80 billion and X at $33 billion, factoring in a $12 billion debt adjustment.”
Musk emphasized that this acquisition would further intertwine the operations and objectives of both companies. “With this step, we are consolidating our data, models, computational power, distribution channels, and top-tier talent,” he added.
This strategic move solidifies X as a core component of xAI’s broader mission, positioning the influential social media network under the umbrella of Musk’s AI enterprise. While xAI’s artificial intelligence tools, such as its chatbot Grok, were already integrated into X, this deal cements the union between two of Musk’s most ambitious ventures.
Reports from The Wall Street Journal indicate that shares of both companies will be exchanged for equity in a new entity known as xAI Holdings Corp. Insiders suggest that merging the businesses into a singular corporate structure may facilitate future fundraising efforts, making investment more attractive to stakeholders.
Musk, who also spearheads Tesla, SpaceX, and Neuralink, noted in his announcement that X’s valuation has shifted dramatically over time. Originally acquired for $44 billion in 2022, the platform’s value was later reduced due to financial challenges. At one point, Fidelity estimated its worth at under $10 billion. However, recent developments and investor sentiment have driven X’s valuation back up, with Musk highlighting the platform’s 600 million active users.
Since its inception in 2023, xAI has aggressively expanded, recruiting elite AI researchers from Google DeepMind, Microsoft, and OpenAI. The startup has also invested heavily in constructing advanced AI data centers to compete with industry leaders. In December, Musk’s company secured a historic $6 billion funding round, bringing its valuation to $45 billion—now increased to $80 billion following the latest deal.
xAI has made significant strides in the AI landscape, particularly with the release of Grok 3 in February. This advanced AI model has demonstrated competitive performance in mathematics, science, and programming, placing xAI alongside leading AI developers such as OpenAI, Google DeepMind, and Anthropic.
Despite xAI’s advancements, Musk continues to challenge OpenAI, a company he co-founded alongside Sam Altman. The Tesla CEO has been vocal in opposing OpenAI’s for-profit shift, which is crucial for securing future investments. In February, Musk even attempted a $97 billion takeover of OpenAI, though the bid was swiftly rejected by the board. Nevertheless, this maneuver may have influenced the market valuation of OpenAI’s assets.
A key advantage xAI holds over its competitors is its access to X’s extensive data archives. The vast collection of user-generated content on X serves as a powerful resource for AI training, providing xAI with a strategic edge. Additionally, X offers a direct consumer-facing platform, enabling seamless deployment of AI-driven tools.
Musk has a well-documented history of integrating his various ventures, often sparking legal scrutiny. With the formal acquisition of X by xAI, the two entities now function as a singular force, reinforcing the notion that X’s ultimate value lies in accelerating Musk’s long-term AI ambitions. The merger signals a bold new chapter in the evolution of both social media and artificial intelligence, with Musk once again pushing the boundaries of innovation.
