Elon Musk announced on Friday that xAI, valued at $80 billion, has acquired X for $33 billion in stock. This marks the second large-scale shuffle in Musk’s portfolio. He first took over Twitter in 2022 for $44 billion.
He later changed Twitter’s name to X and carried out drastic cost cuts. Over time, he introduced xAI to compete with OpenAI. Many saw hints of a union once xAI released its Grok chatbot on X.
This all-stock deal pegs X’s worth at $33 billion, factoring in $45 billion minus $12 billion in debt. Venture funds like Sequoia Capital and Saudi Arabia’s Kingdom Holding back both companies, making the transaction easier to finalise.
Why Does xAI Want To Bring X Under Its Wing?
xAI strives to match heavyweights such as Google and Microsoft in artificial intelligence. Musk’s team has developed large language models and a chatbot, Grok, which already runs on X. Many believe this arrangement is a logical way to speed up research.
xAI’s massive Colossus supercomputer in Memphis has prompted unease among locals. They say it runs on gas turbines that could harm air quality. There have been calls for deeper oversight, though xAI has pressed ahead with minimal public comment.
Musk sees a close link between xAI’s advanced resources and X’s user base. He believes they can speed up chatbot development while tapping X’s global audience. Onlookers think this step may let xAI stand out in the busy AI field.
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Musk tweeted, “[@]xAI has acquired [@]X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).
“Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centres at unprecedented speed and scale.
“X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.
“The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.
“I would like to recognise the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning. Thank you for your continued partnership and support.”
Is Privacy More Of A Factor Now?
X has long been a place for public conversation. Users fear that deeper ties with xAI could allow more extensive data tracking. Musk’s recent statements have not answered these questions in detail.
In Memphis, local campaigners have challenged xAI’s build-out of Colossus. They say the project advanced without proper community input. xAI was funded last year at $50 billion, and that figure soared soon after, fueling bigger ambitions.
Musk also holds a post in President Trump’s second administration, supervising the Department of Government Efficiency, or DOGE. He has pressed for fewer regulations, which people think might benefit his enterprises. Skeptics of that policy doubt if public interests rank high.