Elon Musk’s artificial intelligence company, xAI, has acquired his social media platform, X (formerly Twitter), in a $33 billion all-stock transaction. The deal, announced on Friday, further consolidates Musk’s business empire, which includes Tesla and SpaceX, and is expected to enhance the development of his AI model, Grok.
Musk shared the news on X, stating, “The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt),” and emphasized that the two companies’ futures are “intertwined.” The merger will integrate data, AI models, computational resources, distribution channels, and talent.
While the exact details of the transaction remain unclear—such as how investors will be compensated and the potential regulatory implications—analysts view it as a significant milestone. Paolo Pescatore of PP Foresight described the move as a surprising yet logical step in the ongoing transformation of X. Analyst Gil Luria noted that the $45 billion valuation figure is symbolic, as it surpasses the $44 billion Musk paid to acquire Twitter in 2022, allowing him to share xAI’s value with Twitter’s previous investors.
Musk’s influence extends beyond the corporate world. As head of the Department of Government Efficiency (DOGE) under the Trump administration, he has gained leverage in Washington, potentially influencing regulatory agencies that oversee his ventures.
An xAI investor, who spoke anonymously to Reuters, said the acquisition was expected, characterizing it as Musk strengthening his leadership across his companies. Musk did not seek investor approval, explaining that X and xAI had already been closely collaborating and that the merger would accelerate the integration of Grok.
Founded less than two years ago, xAI recently raised $10 billion in funding, valuing the company at $75 billion. In February, Musk led a $97.4 billion bid to acquire OpenAI, the creator of ChatGPT, but was rejected. He has since sued OpenAI in an effort to prevent its transition from a nonprofit to a for-profit entity, though a judge recently denied his request for an injunction.
As competition in AI intensifies, xAI has been expanding its data center capacity to train advanced models. Its Memphis-based supercomputer, Colossus, is claimed to be the largest in the world. In February, xAI launched Grok-3, aiming to compete with OpenAI and Chinese AI firm DeepSeek. The acquisition of X will provide xAI with a vast real-time data stream, potentially enhancing its AI training capabilities.
Musk initially acquired Twitter for $44 billion in 2022, taking it private and drastically cutting its workforce, which led to an exodus of advertisers and a decline in revenue. However, brands have recently begun returning to X, coinciding with Musk’s growing political influence.
Banks that had extended Musk $13 billion in loans to acquire X managed to sell the debt last month after holding it for two years, benefiting from increased investor interest in AI-driven companies and X’s improved financial performance. Experts suggest that those who purchased the debt will likely profit from the merger.
In a separate legal matter, a U.S. judge on Friday rejected Musk’s attempt to dismiss a lawsuit accusing him of misleading former Twitter shareholders by delaying disclosure of his initial investment in the company.
