Elon Musk’s artificial intelligence startup, xAI, has completed an acquisition of the social media platform X, previously known as Twitter, through an all-stock transaction. This announcement was made by Musk in a post on the social media platform on Friday.
Musk stated, “xAI has acquired X in an all-stock transaction,” indicating that the merger values xAI at $80 billion and X at $33 billion, the latter amount being adjusted for a $12 billion debt.
He further explained that the futures of the two companies are “intertwined,” emphasizing the integration of data, models, computation, distribution, and talent as a result of the acquisition.
This strategic move positions X, the significant social media platform originally acquired by Musk in 2022 under its former name, Twitter, within the framework of his AI startup, which he established in 2023 to rival OpenAI. While xAI’s offerings, such as its AI chatbot Grok, were already integrated with the X platform prior to this deal, this acquisition deepens the connection between these key enterprises under Musk’s leadership.
Musk highlighted in his post that this agreement evaluates X at $33 billion, a reduction from a previous enterprise valuation of $45 billion due to its debt. When Musk purchased X in October 2022 for $44 billion, the valuation had fluctuated significantly. Fidelity had once valued X at less than $10 billion.
During the period following Donald Trump’s presidency, for whom Musk was an active campaigner, X’s valuation improved markedly due to its perceived increased influence, as noted by investors. Musk mentioned in his Friday post that X boasts over 600 million active users.
Meanwhile, xAI has experienced substantial growth in valuation over recent years. Founded just two years ago, xAI has established itself as a leading AI laboratory, regularly launching AI models and products that compete with industry leaders such as OpenAI, Anthropic, and Google.
In February, xAI was reportedly in discussions to secure an additional $10 billion in funding at a $75 billion valuation. Musk now claims the AI startup has reached a valuation of $80 billion.
A significant benefit for xAI is its access to the extensive data accumulated by X over the years, granting it a notable advantage in acquiring training data for artificial intelligence development. Previously, Musk had enabled the Grok chatbot to access real-time updates from posts on X, suggesting a likely further integration between X and Grok following the acquisition.
This situation is ongoing, and updates will be provided as they become available.
