Musk’s AI firm acquires X for $33 billion | Elon Musk’s artificial intelligence firm, xAI, has acquired the social media platform X, formerly known as Twitter, for $33 billion in an all-stock transaction that further consolidates Musk’s control over his diverse business empire.
The announcement, made on Friday, merges two of Musk’s key ventures, which also include Tesla and SpaceX, potentially enhancing his ability to train his AI model, Grok.
In a post on X, Musk stated that the deal values xAI at $80 billion and X at $33 billion, noting, “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution, and talent.” However, the specifics of the deal, including investor compensation and leadership integration within the new entity, remain unclear as both companies have not commented on the merger.
Analyst Paolo Pescatore from PP Foresight described the move as surprising, suggesting it signifies the end of a tumultuous chapter for X. Gil Luria from DA Davidson & Co highlighted the strategic significance of the $45 billion figure Musk chose, noting it is slightly above the 2022 acquisition price for Twitter by Musk.
Beyond his business endeavors, Musk has reinforced his influence in Washington, D.C., by leading cost-cutting initiatives for the Trump administration as head of the Department of Government Efficiency, or Doge, which could further affect regulatory oversight of his companies.
Investors expressed their belief that the acquisition reflects Musk’s intent to centralize leadership across his businesses without seeking formal approval from them. They noted the ongoing collaboration between xAI and X, asserting that the merger aims to deepen the integration with Grok.
Musk’s xAI, established less than two years ago, recently received $10 billion in funding, valuing the company at $75 billion. Additionally, earlier this year, Musk attempted to purchase OpenAI, the creator of ChatGPT, for $97.4 billion, but the proposal was rejected.
As competition in the AI sector grows, xAI is expanding its data center capabilities, with its supercomputer cluster, Colossus, touted as the largest globally. Musk introduced Grok-3 in February to compete with major players in the AI landscape.
Following the merger, investors who acquired the debt from banks that financed Musk’s initial purchase of X are expected to profit as interest in AI investments surges. In a related legal matter, a U.S. judge recently dismissed a bid by Musk to throw out a lawsuit claiming he misled former Twitter shareholders about his investment disclosures.
Musk’s AI firm acquires X for $33 billion | Source: Guardian
