xAI Acquires X from Elon Musk for $33 Billion

# ai # News # Tech # Business

A few years after Elon Musk's $44 billion acquisition of Twitter, he announced that his AI company, xAI, has now taken over the social media platform, now known as X. In a post on X, Musk revealed that the deal was an all-stock transaction, setting xAI's value at $80 billion and X at $33 billion, which includes $12 billion in debt from the original purchase. Musk shared his excitement, saying, "This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach." Despite the deal reflecting a $11 billion drop in value since the 2022 sale, X's CEO Linda Yaccarino remained optimistic, stating, "The future could not be brighter." Although Musk hasn't succeeded in turning X into an "everything app" yet, he's been closely linking xAI and X since launching xAI in the summer of 2023. He's emphasized that access to X's vast data would give xAI a significant edge, and he's integrated xAI's Grok tool into the social platform. This week, Grok expanded its reach by integrating with Telegram. This move echoes a previous deal where Musk merged two of his companies. In 2016, Tesla Motors acquired SolarCity for $2.6 billion and subsequently dropped "Motors" from its name. Musk, who was the largest individual shareholder of SolarCity and had his cousin Lyndon Rive as its CEO, didn't mention Tesla in the recent announcement. At a hastily arranged all-hands meeting for Tesla last week, Musk jokingly mentioned having "like, 17 jobs," leaving it unclear whether this new deal adds to or subtracts from that count. Musk's latest post didn't touch on his goal for X to manage "someone's entire financial life," but he reiterated his vision of X as "the digital town square." As we reported in January, xAI employees were also working for X, using company laptops and accessing its codebase. Musk had previously suggested that X investors would own 25 percent of xAI, but by January, this hadn't happened for X employees holding shares. While X's valuation had dipped since the 2022 acquisition before a recent recovery, xAI's value has soared, mirroring the growth of other AI companies like Nvidia and OpenAI. Musk, who co-founded OpenAI and was an early investor before becoming a rival and legal adversary after leaving in 2018, saw xAI's valuation hit $50 billion in a November 2023 investment round, more than doubling its $24 billion valuation from a spring 2024 funding round, according to *The Wall Street Journal*. Elon Musk: > @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. > > Thank you for your continued partnership and support.

Related article

Comments (43)