Elon Musk's xAI Acquires Social Media Platform X for $33 Billion
The acquisition marks a significant strategic move for Musk, intertwining his AI venture with the social media giant.
San Francisco - Elon Musk announced on Friday that his artificial intelligence start-up, xAI, has acquired the social media platform X, formerly known as Twitter, in a transaction valued at $33 billion excluding debt.
The acquisition is described as a fully stock-based transaction.
Musk, recognized as the world's richest person and founder of companies like Tesla and SpaceX, had purchased the social media platform for $44 billion in late 2022 when it was still operating under the Twitter name.
In a statement on the platform, Musk expressed that this merger would unleash tremendous potential by combining xAI's advanced capabilities with the broad reach of X.
The billionaire stated that X has more than 600 million users, though he did not specify their engagement frequency, and claimed that the future of X is 'intertwined' with that of xAI, which he launched two years ago.
'We officially take the step to combine data, models, computing, distribution, and talent,' Musk noted during the announcement.
This merger appraises xAI at $80 billion and values X at $33 billion, reflecting $45 billion minus $12 billion in debt.
Musk described the fusion of his two companies as a means to 'build a platform that not only reflects the world but actively accelerates human progress.'
Founded in 2023 in response to the rise of generative AI technologies, xAI was motivated by the success of ChatGPT—the AI chatbot launched by OpenAI in late 2022, a company Musk co-founded before distancing himself from the other founders.
In February, xAI released Grok 3, the latest version of its chatbot, which Musk anticipates will gain traction in a competitive market that includes ChatGPT and the Chinese company DeepSeek.
He has described Grok 3 as 'terrifyingly intelligent,' equipped with ten times the computational resources of its predecessor.
This acquisition occurs at a time when Musk is serving as a close advisor to U.S. President Donald Trump.
He oversees significant budget cuts in his role as the head of the Department of Government Efficiency (DOGE), where he is responsible for laying off thousands of government employees and dismantling entire agencies.
Musk has also been a major financial supporter of Trump's campaign, which successfully returned Trump to the White House in January.
Analysts at eMarketer recently predicted that ad revenues on X are expected to grow this year, as brands are wary of potential repercussions from Musk, who now holds extensive political connections, if they fail to invest in his platform.
'Many advertisers may view spending on X as a cost of doing business to mitigate potential legal or financial repercussions,' remarked Jasmine Enberg, a senior analyst at eMarketer.
The acquisition is described as a fully stock-based transaction.
Musk, recognized as the world's richest person and founder of companies like Tesla and SpaceX, had purchased the social media platform for $44 billion in late 2022 when it was still operating under the Twitter name.
In a statement on the platform, Musk expressed that this merger would unleash tremendous potential by combining xAI's advanced capabilities with the broad reach of X.
The billionaire stated that X has more than 600 million users, though he did not specify their engagement frequency, and claimed that the future of X is 'intertwined' with that of xAI, which he launched two years ago.
'We officially take the step to combine data, models, computing, distribution, and talent,' Musk noted during the announcement.
This merger appraises xAI at $80 billion and values X at $33 billion, reflecting $45 billion minus $12 billion in debt.
Musk described the fusion of his two companies as a means to 'build a platform that not only reflects the world but actively accelerates human progress.'
Founded in 2023 in response to the rise of generative AI technologies, xAI was motivated by the success of ChatGPT—the AI chatbot launched by OpenAI in late 2022, a company Musk co-founded before distancing himself from the other founders.
In February, xAI released Grok 3, the latest version of its chatbot, which Musk anticipates will gain traction in a competitive market that includes ChatGPT and the Chinese company DeepSeek.
He has described Grok 3 as 'terrifyingly intelligent,' equipped with ten times the computational resources of its predecessor.
This acquisition occurs at a time when Musk is serving as a close advisor to U.S. President Donald Trump.
He oversees significant budget cuts in his role as the head of the Department of Government Efficiency (DOGE), where he is responsible for laying off thousands of government employees and dismantling entire agencies.
Musk has also been a major financial supporter of Trump's campaign, which successfully returned Trump to the White House in January.
Analysts at eMarketer recently predicted that ad revenues on X are expected to grow this year, as brands are wary of potential repercussions from Musk, who now holds extensive political connections, if they fail to invest in his platform.
'Many advertisers may view spending on X as a cost of doing business to mitigate potential legal or financial repercussions,' remarked Jasmine Enberg, a senior analyst at eMarketer.
