Elon Musk's xAI acquires X for $33 billion

Elon Musk’s artificial intelligence company xAI has acquired X (formerly Twitter) in an all-stock transaction, valuing xAI at $80 billion and X at $33 billion, Musk announced in a social media post. The deal consolidates Musk’s two ventures and positions them for deeper integration of AI and social media. “The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt),” he said in the post.

Musk, who bought Twitter for $44 billion in late 2022 in a highly leveraged transaction, rebranded the platform as X and initiated sweeping changes, including cutting more than half of its global workforce. The company has since been operating with a leaner team, a move Musk claims has made X “one of the most efficient companies in the world.”

In his post, Musk emphasised the synergies between the two entities. “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” he said. He further said that the combination “will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Since its founding two years ago, xAI has emerged as one of the leading AI labs, building AI models and data centers at an accelerated pace. Musk has aggressively expanded xAI’s infrastructure, spending billions on high-end Nvidia chips to support its AI ambitions. The acquisition aligns with Musk’s broader vision of integrating AI into digital platforms, potentially allowing X to leverage xAI’s technology for better user experiences.

“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,” he said. He suggested that the integration would create a platform that not only reflects reality but also “actively accelerates human progress.”

He also thanked employees of both companies for their contributions, saying, “This is just the beginning.”

Following Twitter's purchase, in a deal that included debt, he told employees in January that X had been in a "very dire situation from a revenue standpoint." He launched xAI the following year and invested billions in high-end Nvidia chips to support its development.

The acquisition of X by xAI marks a major shift for both companies as Musk continues to integrate AI technology with social media.