A few years after buying Twitter for $44 billion, Elon Musk announced that his artificial intelligence company, xAI, had acquired the social media platform X (formerly Twitter).
He described the deal as an all-stock transaction, valuing xAI at $80 billion and X at $33 billion, including $12 billion in debt from the original takeover. Musk believes this merger will unlock huge potential by combining xAI’s AI expertise with X’s massive user base.
The deal comes after X lost about $11 billion in value since Musk’s 2022 purchase. However, X’s CEO, Linda Yaccarino, remains optimistic, saying, “The future could not be brighter.”
Musk has been trying to turn X into an “everything app” but hasn’t succeeded yet. Since launching xAI in 2023, he has closely linked the two companies. He claimed that X’s vast data would give xAI a competitive edge and even integrated xAI’s chatbot, Grok, into the social media platform. Recently, Grok expanded beyond X and is now available on Telegram as well.
This move is similar to a previous business decision by Musk when Tesla acquired SolarCity in 2016, a company where Musk was the largest shareholder and his cousin was CEO. That deal led to Tesla dropping “Motors” from its name. In a recent meeting, Musk mentioned he already had 17 jobs, making it unclear whether this new merger adds to or reduces his workload.
Although Musk has big plans for X to manage people’s financial lives, he didn’t mention that aspect in his announcement. However, he reaffirmed his vision of X as the “digital town square.” Earlier reports showed that xAI employees also worked for X and had access to its code, but some expected investments in xAI by X’s investors had not yet happened.
X’s value had dropped significantly since Musk’s takeover, though it has recently rebounded. Meanwhile, xAI’s valuation has skyrocketed, following the trend of other AI companies like Nvidia and OpenAI. In November, xAI was valued at $50 billion—more than double its worth in early 2024.
Musk expressed his excitement about the merger, stating that xAI and X will now officially combine their data, AI models, computing power, and talent. He believes this will lead to smarter and more meaningful user experiences, helping to advance knowledge and accelerate human progress. He also acknowledged the dedication of employees at both companies and hinted that this is just the beginning of what’s to come.
