Tech entrepreneur Elon Musk has announced that his artificial intelligence startup, xAI, has acquired his social media platform, X, in an all-stock deal valued at $33 billion.
This transaction boosts xAI’s valuation to $80 billion while X remains valued at $33 billion.
Both companies are privately held under Musk’s leadership and share key investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.
Established less than two years ago, xAI is focused on developing artificial intelligence models with the goal of understanding “the true nature of the universe.”
The company positions itself as a competitor to OpenAI, which Musk co-founded in 2015 but later parted ways with due to strategic differences.
In June 2024, xAI revealed plans to construct a supercomputer in Memphis, Tennessee, to train its AI chatbot, Grok. By September, Musk confirmed that part of this supercomputer, known as Colossus, was already operational.
However, the project has faced scrutiny from environmental and public health groups, particularly concerning its reliance on natural gas-powered turbines and its expansion plans involving a graywater facility.
Following the merger, Musk emphasized the synergy between xAI and X, highlighting their shared data, computing capabilities, and distribution channels.
He stated that the combination would accelerate AI advancements while staying true to their mission of truth and knowledge.
“@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 centers 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 recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning,” Musk stated.
With this merger, Musk aims to integrate artificial intelligence more deeply into X’s ecosystem, setting the stage for a more AI-driven digital experience.
