$45b deal: Musk’s xAI buys social media giant X
In a shock announcement, the world’s richest man has sold X, formerly known as Twitter, to another one of his businesses.
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Elon Musk made a shock announcement that his artificial intelligence venture xAI has acquired his X social media platform in an all-stock transaction for $45 billion – a billion more than the mogul paid for the site in 2022.
“The combination values xAI at $80 billion and X at $33 billion,” Musk revealed in a statement posted on X — formerly known as Twitter.
Musk, the world’s richest man with a net worth estimated at $330 billion, said that the deal included $12 billion of debt — which raises the overall valuation for X to $45 billion.
The Tesla and SpaceX CEO highlighted the strategic importance of this merger, stating: “xAI and X’s futures are intertwined.”
“Today, we officially take the step to combine the data, models, compute, distribution and talent,” he wrote.
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
X CEO Linda Yaccarino echoed Musk’s optimism regarding the deal, posting, “The future could not be brighter.”
Musk is expected to form a new holding company of X and xAI in Texas, according to the Wall Street Journal. There won’t be any change in control of X’s existing debt, sources told the outlet.
He acquired Twitter for $44 billion in late 2022, incurring substantial debt.
Since then, he has slashed its workforce, modified user features, reinstated previously banned accounts and rebranded the site.
The merger is expected to significantly boost xAI’s competitive edge, particularly with the integration of Grok, xAI’s own chatbot.
Grok has been positioned to compete directly with major players in the AI field, notably OpenAI, a company Musk co-founded as a nonprofit but later left following disputes.
“This helps integrate the system quite nicely,” Wolfe Research analyst Shweta Khajuria noted.
“This gives Grok a unique advantage” due to its enhanced access to vast datasets.
She further highlighted the strategic capability this move offers xAI, allowing it to manage or even limit data access to competing firms.
The acquisition announcement follows reports from February that Musk was actively exploring investor interest in an xAI funding round targeting a valuation of about $75 billion.
Prominent investment firms like Sequoia Capital, Andreessen Horowitz, Fidelity Investments and BlackRock have previously backed the AI startup.
“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,” Musk wrote.
On the other hand, Musk highlighted that X has also undergone a profound change, noting it “has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.”
Recently, X raised nearly $1 billion in fresh equity, aligning its valuation closely to Musk’s original purchase price in 2022.
Moreover, the platform is on track for its first year of growth in advertising revenues since Musk’s takeover.
According to research firm Emarketer, X is forecasted to achieve $1.31 billion in US ad sales in 2025, marking an increase of 17.5%.
Global ad revenues for X are projected to reach $2.26 billion this year, reflecting a 16.5% growth.
This story was originally published on the New York Post.
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