Elon Musk’s AI startup, xAI, has acquired his social media platform X, previously often called Twitter, in an all-stock deal, he introduced in a put up on X Friday.
“xAI has acquired X in an all-stock transaction,” Musk stated. “The mixture values xAI at $80 billion and X at $33 billion ($45B much less $12B debt).”
Musk went on to explain the 2 corporations’ futures as “intertwined.” He added, “Today, we formally take the step to mix the info, fashions, compute, distribution and expertise.”
The acquisition locations X — the extremely influential social media platform Musk bought in 2022 below its former identify, Twitter — firmly below the umbrella of Musk’s AI startup, which he based in 2023 to compete with OpenAI. While xAI’s merchandise, together with its AI chatbot Grok, had been tightly built-in into the X platform earlier than this deal, Friday’s acquisition additional combines two of Musk’s most high-profile corporations.
According to publications together with The Wall Street Journal, shares of X and xAI might be exchanged for shares of a brand new holding firm known as xAI Holdings Corp. The WSJ additionally studies that executives at each corporations believed that it could be simpler to boost cash for a mixed entity.
Musk — who additionally leads Tesla, SpaceX, and Neuralink — notes in his put up that this deal values X at $33 billion (lowered from an enterprise worth of $45 billion because of the firm’s $12 billion in debt). Musk initially bought X for $44 billion in October 2022 and took it non-public. However, the valuation has swung dramatically in recent times. At one level, Fidelity valued X at lower than $10 billion.
In the months because the inauguration of President Donald Trump — for whom Musk aggressively campaigned and for whom Musk now serves below as a particular adviser main DOGE — X’s valuation has risen, largely as a result of buyers imagine the platform extra influential now. Musk stated in his put up on Friday that X has greater than 600 million energetic customers.
Musk launched xAI in 2023 and has since beefed up the startup with industry-leading AI researchers from Google DeepMind, Microsoft, and OpenAI, and constructed out the huge AI information facilities wanted to meet up with different frontier AI builders. To gasoline these efforts, Musk has gone on a historic fundraising marketing campaign, together with a $6 billion funding spherical in December that valued the startup at $45 billion. According to Musk, xAI’s valuation is now even greater, at $80 billion.
xAI has largely been profitable in its mad sprint to meet up with OpenAI, Google DeepMind, and Anthropic. In February, the startup launched Grok 3, a frontier AI mannequin that’s aggressive with the {industry}’s main AI fashions on benchmarks measuring math, science, and coding.
But xAI’s successes haven’t stopped Musk from meddling with OpenAI, a startup he co-founded with Sam Altman. Musk is at present making an attempt to thwart OpenAI’s for-profit transition — which it wants to finish to safe future funding — in additional methods than one. The billionaire proprietor of xAI has made OpenAI’s for-profit transition the centerpiece of his lawsuit in opposition to OpenAI. Musk additionally submitted a $97 billion takeover bid for Altman’s startup in February. OpenAI’s board promptly rejected the concept, nevertheless it already might have pushed up the market value for OpenAI’s belongings.
One of the foremost benefits that xAI has over OpenAI and different startups is its entry to X. The massive physique of posts that X has collected through the years offers xAI a big benefit within the race for AI coaching information. Further, X offers Musk’s AI startup an enormous client app to succeed in customers in.
Musk has a historical past of blurring the traces between his many corporations, which has landed him in authorized bother earlier than. With xAI’s acquisition of X, the 2 are actually successfully one — and the transfer means that X’s true worth might lie in advancing Musk’s broader AI ambitions.
This story has been up to date with extra particulars concerning the construction of the deal.
