Elon Musk announced that his artificial intelligence company, xAI, has acquired X, the social media platform formerly known as Twitter, in an all-stock deal valued at $45 billion, including $12 billion in debt. The transaction values xAI at $80 billion and X at $33 billion, marking a major step in Musk’s ambition to integrate cutting-edge AI with social media on a massive scale. Musk described the merger as a transformative move, declaring that the companies’ “futures are intertwined.”
The billionaire entrepreneur emphasized that the merger will unlock new potential by combining xAI’s advanced AI models, data processing capabilities, and technological expertise with X’s vast user base and distribution network. “Today, we officially take the step to combine the data, models, compute, distribution, and talent,” Musk stated. He believes this fusion will give xAI a strategic advantage in the increasingly competitive AI landscape, especially against rivals like OpenAI, a company he co-founded but later distanced himself from.
X CEO Linda Yaccarino expressed enthusiasm for the deal, calling it a game-changer for both companies. “The future could not be brighter,” she posted, highlighting the potential for innovation and accelerated growth. The merger is expected to enhance the capabilities of Grok, xAI’s chatbot, by granting it access to X’s enormous data reservoir, positioning it to rival major AI players. Industry analysts have noted that this integration could give xAI a distinct advantage by limiting competitors’ access to critical datasets, creating a moat around its AI operations.
The acquisition also carries financial significance. Despite X’s initial struggles after Musk’s 2022 purchase, the platform recently raised nearly $1 billion in fresh equity, bringing its valuation closer to the original $44 billion price tag. Additionally, X is on track for its first year of advertising revenue growth under Musk’s leadership, with US ad sales projected to reach $1.31 billion in 2025—a 17.5% increase—while global ad revenues are expected to hit $2.26 billion, reflecting a 16.5% rise.
Looking ahead, Musk is reportedly planning to form a new holding company based in Texas, unifying X and xAI under one entity. This structure is intended to streamline operations and maximize synergies between the two companies. The deal underscores Musk’s vision of transforming X into a multi-faceted platform that combines social media, AI, and technology, further cementing his influence across both industries.
