Billionaire tech entrepreneur Elon Musk revealed on March 28 that he has sold the social networking site X to his AI firm, xAI, in an all-stock deal worth $33 billion.
xAI and X's destinies are tied together. Today, we formally take the leap to merge the data, models, compute, distribution, and talent, Musk declared in an X post, which was previously Twitter.
Under the agreement, xAI will buy X for $45 billion—more than the $44 billion Musk initially paid for the platform in 2022. But the new deal also accounts for $12 billion of debt.
Musk emphasized that the acquisition would "unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach." He noted that the transaction values xAI at $80 billion and X at $33 billion. "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," Musk said.
Musk, who is also the head of SpaceX and serves as advisor to President Donald Trump, first acquired Twitter in 2022. After purchasing Twitter, he made a few highly controversial modifications, such as the mass layoffs of 80% of staff, policy overhauls for hate speech and misinformation, and the full renaming of the company to X.
Reiterating the benefits of the merger, Musk wrote on X: "This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach." He added that the combined entity aims to offer "smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge."
With this move, X—previously Twitter—will now come under the wing of xAI, the AI startup Musk founded in 2023 as a straight competitor to OpenAI.
While Musk did not immediately outline any changes for X, the platform already incorporates xAI’s chatbot, Grok, as part of its features, according to CNN. It remains unclear how the transition will impact X users, though xAI currently utilizes posts from the platform to train its AI models. Additionally, paying subscribers on X already have access to the AI chatbot, Grok.
Musk’s Role in Government and AI Leadership
The news of the merger came just days after Musk announced plans to resign from his role in the Department of Government Efficiency (DOGE) at the end of May. He has been spearheading a massive effort to cut the U.S. deficit by $1 trillion. Musk, who was appointed by President Donald Trump as a "special government employee" for 130 days, has been at the forefront of cost-cutting efforts in the administration.
Musk has been busy positioning himself as a central figure in the AI sector, which is a high priority for both the Trump administration and the rest of the tech industry. In the early part of this year, he spearheaded a group of investors on a bid to buy OpenAI—the firm that owns ChatGPT—for close to $100 billion, ratcheting up his long-running feud with OpenAI CEO Sam Altman.
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