Elon Musk’s artificial intelligence startup, xAI, has finalized a landmark acquisition of social media platform X, formerly known as Twitter, in a deal valuing the company at $33 billion.
The transaction, which includes $12 billion in debt, positions the combined entity at a total value of $45 billion, with xAI’s valuation pegged at $80 billion. Musk described the merger as a strategic alignment of data, talent, and technology to accelerate AI development.
“xAI and X’s futures are intertwined,” Musk wrote on X, emphasizing the integration of X’s user-generated content and real-time data streams into xAI’s AI models, including its chatbot Grok. Representatives for X and xAI did not respond to requests for comment on specifics, including leadership restructuring or regulatory implications.
Saudi Arabian investor Prince Alwaleed bin Talal, whose Kingdom Holding Co. is among X’s largest stakeholders, hailed the deal as a value booster, projecting his investments could reach $4 billion to $5 billion. Analysts noted the $45 billion figure narrowly surpasses Musk’s $44 billion takeover of Twitter in 2022.
An anonymous xAI investor characterized the move as Musk consolidating control over his ventures, streamlining collaboration between X’s platform and xAI’s Grok chatbot. Musk reportedly bypassed shareholder approval, informing investors post-decision that deeper integration would enhance AI capabilities.
The acquisition arrives as xAI accelerates its rivalry with OpenAI, Microsoft’s flagship AI partner. Musk’s startup, valued at $75 billion after a recent $10 billion funding round, unveiled its Grok-3 model in February. The merger grants xAI access to X’s vast data trove, critical for training advanced AI systems.
xAI is also expanding infrastructure, notably its “Colossus” supercomputer cluster in Tennessee, billed as the world’s largest. Meanwhile, Musk’s legal battle with OpenAI continues; a judge recently denied his injunction to block the ChatGPT maker’s transition to a for-profit model.
X’s turbulent trajectory under Musk marked by workforce cuts, advertiser exodus, and rebounding revenue, faces fresh scrutiny. Seven banks holding $13 billion in X debt sold their stakes last month, capitalizing on renewed investor interest in AI and X’s improved performance, sources confirmed.
Separately, a U.S. judge rejected Musk’s bid to dismiss a lawsuit alleging he delayed disclosing his initial X investment, defrauding former shareholders. The ruling adds to legal challenges overshadowing the merger.
As regulatory and competitive pressures mount, the xAI-X union underscores Musk’s gamble to dominate AI innovation, leveraging social media’s data firehose in an industry where scale and speed increasingly define success.
