Elon Musk’s synthetic intelligence startup xAI has formally acquired his social media platform X in an all-stock transaction valued at roughly $45 billion. This determine consists of $12 billion in debt, bringing the implied fairness worth of X to $33 billion.
The merger will “mix the info, fashions, compute, distribution and expertise” of the 2 firms, in line with Musk’s announcement on X. “This mix will unlock immense potential by mixing xAI’s superior AI functionality and experience with X’s huge attain,” the world’s richest man added.
Each firms are privately held and managed by Musk, so buyers in X might be compensated with shares in xAI. Some buyers have already invested in xAI, together with Constancy Administration & Analysis, Andreessen Horowitz, Sequoia Capital, and Kingdom Holding Firm. Musk has not disclosed how X’s management staff might be integrated into the AI analysis agency.
Deeper Grok integration and a rebound for X
X and xAI are already linked via the Grok AI chatbot, which is built-in into the X platform. Grok was initially skilled by xAI on public knowledge, with its more moderen iterations refined utilizing xAI’s Colossus supercomputer in Memphis, TN. An xAI investor instructed Reuters the merger will result in deeper integration of the chatbot inside X.
xAI has gained traction within the AI sector, successful that X’s co-investors will now profit from. Musk claims xAI’s post-acquisition worth is $80 billion, which aligns with a projected $75 billion valuation mentioned final month, in line with Bloomberg.
Musk co-founded OpenAI in 2015 however left over conflicts of curiosity with AI improvement at Tesla, in addition to disagreements concerning OpenAI’s choice to turn out to be a for-profit entity. He has since modified his tune on the matter.
X’s trajectory since 2022 has been extra unstable. That 12 months, Musk acquired the platform — previously generally known as Twitter — for roughly $44 billion. He subsequently laid off virtually 80% of employees to chop prices, considerably altered content material moderation processes, and reinstated plenty of banned accounts, together with Donald Trump’s.
These selections triggered an exodus of advertisers, lots of whom deemed the platform too dangerous. Customers additionally started leaving in droves amid considerations over a surge of hate speech and misinformation.
Nonetheless, X has bounced again considerably since then, partly resulting from its AI associations with Grok and xAI, and partly resulting from its improved revenue margins. Constancy valued its X stake at $13.30 million in February 2025, and the platform has since re-obtained its $44 billion valuation.
Political energy meets company enlargement
Some X customers are returning to the platform due to Musk’s rising affect within the White Home as head of the Division of Authorities Effectivity. This place additionally grants him the facility to doubtlessly affect regulatory oversight of the merger.
SEE: Will Musk’s Ties to Trump & DOGE Result in Lengthy-Time period Issues for Tesla?
When he was introduced as a senior authorities adviser in January, critics raised considerations that his intensive involvement in non-public enterprises, together with Tesla and SpaceX, created important conflicts of curiosity, doubtlessly leading to lowered oversight of his firms or biased selections in awarding authorities contracts. Nonetheless, he has steered that he’ll step away from DOGE on the finish of Might.
Musk has merged two of his firms prior to now, with the acquisition of photo voltaic set up firm SolarCity by Tesla in 2016. Tesla shareholders disputed this, arguing that the deal primarily benefited Musk personally as he was the biggest shareholder in each firms and accusing him of utilizing Tesla’s sources to bail out a struggling enterprise based by his cousins.
