Elon Musk’s AI startup, xAI, has acquired his social media platform X, which was previously known as Twitter, in an all-stock transaction.

“X has been acquired by xAI in an all-stock transaction,” Musk announced. xAI is valued at $80 billion and X at $33 billion in the combination, which is $45 billion less $12 billion in debt.

Musk subsequently characterized the futures of the two organizations as “intertwined.” He further stated, “Today, we formally initiate the process of integrating the data, models, compute, distribution, and talent.”

X, the highly influential social media platform Musk acquired in 2022 under its former name, Twitter, is now firmly under the purview of Musk’s AI venture, which he established in 2023 to compete with OpenAI.

Despite the fact that xAI’s products, such as its AI chatbot Grok, were already securely incorporated into the X platform prior to this transaction, the acquisition on Friday further consolidates two of Musk’s most prominent companies.

Musk, who also serves as the CEO of Tesla, SpaceX, and Neuralink, indicates in his post that this transaction values X at $33 billion, which is a decrease from the company’s enterprise value of $45 billion, which was influenced by the company’s $12 billion in debt.

In October 2022, Musk acquired X for $44 billion and subsequently privatized it. Nevertheless, the valuation has undergone a significant shift in recent years. At one juncture, Fidelity assessed X at less than $10 billion.

X’s valuation has increased in the months following the inauguration of President Donald Trump, for whom Musk aggressively campaigned and currently functions as a special adviser at DOGE.

This increase is primarily due to the fact that investors now perceive the platform as more influential.

Musk stated in his Friday post that X has a user base of over 600 million active users.
Musk established xAI in 2023 and has since expanded the company by hiring industry-leading AI researchers from Google DeepMind, Microsoft, and OpenAI.

Additionally, Musk has constructed the necessary enormous AI data centers to keep pace with other frontier AI developers.

Musk has embarked on an unprecedented fundraising campaign to support these endeavors, which culminated in a $6 billion financing round in December, which valued the startup at $45 billion.

Musk has stated that the valuation of xAI has increased to $80 billion.
xAI has been primarily successful in its frantic pursuit to surpass OpenAI, Google DeepMind, and Anthropic.

Grok 3, a frontier AI model, was published by the startup in February. It is capable of competing with the industry’s top AI models on benchmarks that assess math, science, and computing.

However, Musk has continued to interfere with OpenAI, a venture that he co-founded with Sam Altman, despite the success of xAI.

Musk is currently attempting to impede OpenAI’s for-profit transition, which is essential for the organization to secure future funding. This is being accomplished in a variety of ways.

The for-profit transition of OpenAI has been the focal point of the billionaire proprietor of xAI’s lawsuit against the company.

In February, Musk also submitted a $97 billion acquisition proposal for Altman’s venture.

The proposal was promptly denied by OpenAI’s board; however, it may have already increased the market price of OpenAI’s assets.

xAI’s access to X is one of its most significant advantages over OpenAI and other ventures.

xAI has a substantial advantage in the competition for AI training data due to the extensive collection of posts that X has amassed over the years.

Additionally, X provides Musk’s AI venture with a substantial consumer application to engage users.