Elon Musk’s AI startup, xAI, has acquired his social media platform X, formerly known as Twitter, in an all-stock deal, he announced in a post on X Friday.
“xAI has acquired X in an all-stock transaction,” Musk said. “The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).”
He went on to describe the two companies’ futures as “intertwined,” adding, “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
The acquisition places X — the highly influential social media platform Musk purchased in 2022 under its former name, Twitter — firmly under the umbrella of Musk’s AI startup, which he founded in 2023 to compete with OpenAI. While xAI’s products, including its AI chatbot Grok, were tightly integrated into the X platform before this deal, Friday’s acquisition further combines two of Musk’s most influential companies.
Musk notes in his post that this deal values X at $33 billion (lowered from an enterprise valuation of $45 billion due to the company’s $12 billion in debt). Musk originally purchased X for $44 billion in October 2022, however, the valuation has swung dramatically in recent years. At one point, Fidelity valued X at less than $10 billion.
In the months since the inauguration of President Donald Trump, for whom Musk campaigned for aggressively, X’s valuation has risen, largely because investors believe it’s more influential now. Musk said in his post on Friday that X has more than 600 million active users.
Meanwhile, xAI’s valuation has skyrocketed in recent years. In just the two years since it was founded, Musk has successfully beefed up xAI to be a frontier AI lab, frequently releasing AI models and products that compete with OpenAI, Anthropic, and Google.
In February, xAI was reportedly in talks to secure another $10 billion in funding at a $75 billion valuation. However, Musk now says his AI startup’s valuation is now $80 billion.
One of the major advantages that xAI has over other startups is its access to X’s data. The large body of posts that X has accumulated over the years gives xAI a significant advantage in the race for AI training data. Further, Musk previously gave the Grok chatbot access to real-time news updates from posts on the X platform. It seems likely that the two products, X and Grok, will only get more tightly integrated following this acquisition.
This is a developing story… Check back for updates.
