Elon Musk’s AI startup, xAI, has acquired his social media platform X, previously generally known as Twitter, in an all-stock deal, he introduced in a publish on X Friday.
“xAI has acquired X in an all-stock transaction,” Musk mentioned. “The mix values xAI at $80 billion and X at $33 billion ($45B much less $12B debt).”
Musk went on to explain the 2 firms’ futures as “intertwined.” He added, “At present, we formally take the step to mix the information, fashions, compute, distribution and expertise.”
The acquisition locations X — the extremely influential social media platform Musk bought in 2022 underneath its former title, Twitter — firmly underneath the umbrella of Musk’s AI startup, which he based in 2023 to compete with OpenAI. Whereas xAI’s merchandise, together with its AI chatbot Grok, had been tightly built-in into the X platform earlier than this deal, Friday’s acquisition additional combines two of Musk’s most high-profile firms.
Musk — who additionally leads Tesla, SpaceX, and Neuralink — notes in his publish that this deal values X at $33 billion (lowered from an enterprise worth of $45 billion as a result of firm’s $12 billion in debt). Musk initially bought X for $44 billion in October 2022 and took it personal. Nevertheless, the valuation has swung dramatically in recent times. At one level, Constancy valued X at lower than $10 billion.
Within the months because the inauguration of President Donald Trump — for whom Musk aggressively campaigned and for whom Musk now serves underneath as a particular adviser main DOGE — X’s valuation has risen, largely as a result of buyers imagine the platform extra influential now. Musk mentioned in his publish on Friday that X has greater than 600 million lively customers.
Musk launched xAI in 2023 and has since beefed up the startup with industry-leading AI researchers from Google DeepMind, Microsoft, and OpenAI, and constructed out the large AI information facilities to meet up with different frontier AI builders. To gasoline these efforts, Musk has gone on a historic fundraising marketing campaign, together with a $6 billion funding spherical in December that valued the startup at $45 billion. In line with Musk, xAI’s valuation is now even larger, at $80 billion.
xAI has largely been profitable in its mad sprint to meet up with OpenAI, Google DeepMind, and Anthropic. In February, the startup launched Grok 3, a frontier AI mannequin that’s aggressive with the {industry}’s main AI fashions on benchmarks measuring math, science, and coding.
However xAI’s successes haven’t stopped Musk from meddling with OpenAI, a startup he co-founded with Sam Altman. Musk is presently attempting to thwart OpenAI’s for-profit transition — which it wants to finish to safe future funding — in additional methods than one. The billionaire proprietor of xAI has made OpenAI’s for-profit transition the centerpiece of his lawsuit towards OpenAI. Musk additionally submitted a $97 billion takeover bid for Altman’s startup in February, which OpenAI’s board promptly rejected, however it already could have pushed up the market worth for OpenAI’s belongings.
One of many main benefits that xAI has over OpenAI and different startups is its entry to X. The big physique of posts that X has accrued through the years offers xAI a big benefit within the race for AI coaching information. Additional, X offers Musk’s AI startup an enormous client app to succeed in customers in.
Musk has a historical past of blurring the strains between his many firms, which has landed him in authorized bother earlier than. With xAI’s acquisition of X, the 2 at the moment are successfully one — and the transfer means that X’s true worth could lie in advancing Musk’s broader AI ambitions.
