Elon Musk's AI company buys X in blockbuster $33B stock deal
Elon Musk’s artificial intelligence company xAI has acquired the tech billionaire’s social media platform X in a blockbuster deal that values X at $33 billion.
The Tesla and SpaceX CEO made the announcement on the social media platform on Friday and said the deal was an all-stock transaction that will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.
He said the combination values xAI at $80 billion and X at $33 billion, or $45 billion less than its $12 billion debt.
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Musk, the world’s richest man, purchased X, formerly known as Twitter, for $44 billion in 2022 to roll back censorship on the platform while also stating that it was underutilized.
"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," Musk wrote.
"This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress."
He wrote that X is the digital town square where more than 600 million active users go to find the real-time source of ground truth.
"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,' Musk wrote.
xAI’s flagship product is Grok, an AI chatbot that’s already integrated into X for premium subscribers. It is meant to compete with other chatbots like ChatGPT, which is made by OpenAI. xAI also competes with Google’s Gemini and Anthropic’s Claude.
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Musk co-founded OpenAI in 2015 along with Sam Altman, Ilya Sutskever, Greg Brockman and others but split from the company in early 2018 after failing to secure control over the company as its majority shareholder and CEO. He later attempted to convince its founders to merge it with Tesla.
Musk then founded xAI in March 2023 and recently raised $10 billion in a funding round that valued the company at $75 billion, according to a media report. xAI rolled out its new chatbot Grok-3 last month.
In December 2024, Musk asked a court to stop OpenAI — the maker of ChatGPT — from transitioning into a for-profit entity, Reuters reported.
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As competition in AI intensifies, xAI has been ramping up its data center capacity to train more advanced models, and its supercomputer cluster in Memphis, Tennessee, called "Colossus," is touted as the largest in the world.
The X platform could serve to further distribute xAI products, while also providing a real-time feed of users' musings, screenshots and other data.
Reuters contributed to this report.