Elon Musk announced on Friday that his artificial intelligence company, xAI, has acquired his social media platform, X, in an all-stock transaction. This deal values xAI at $80 billion and X at $33 billion, considering X’s $12 billion debt.
Musk expressed his vision for the merger as follows: “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, computing, distribution, and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
He emphasised that 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”.
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Integration of AI and social media
The acquisition marks a strategic move to integrate xAI’s advanced AI capabilities with X’s extensive user base. With over 600 million active users, X serves as a “digital town square” where users seek real-time information.
Musk highlighted that this integration will allow the platform to “build a platform that doesn’t just reflect the world but actively accelerates human progress”. xAI’s AI chatbot, Grok, has already been integrated into X, providing users with AI-driven insights and responses.
Financial and strategic implications
The deal reflects Musk’s strategic alignment of AI ambitions with his social media platform. Musk purchased Twitter in 2022 for $44 billion, and since then, X has undergone substantial changes, including a reduction in staff and shifts in content moderation policies.
Despite these changes, X’s valuation declined, but this acquisition marked a rebound in its financial standing. The all-stock nature of the deal means that no immediate financial benefits are disclosed, as both companies are privately held. Analysts note that this move aligns with the current surge in AI investments, positioning xAI as a leader in the AI sector.