Elon Musk’s artificial intelligence company xAI has acquired his X social media platform for US$33 billion in an all-stock deal, as xAI aims to rapidly expand.
Musk bought X, formerly known as Twitter, in 2022 for US$44 billion. xAI was founded in 2023, and its Grok chatbot has been integrated into X since its release.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” said Musk. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
“The combination values xAI at $80 billion and X at $33 billion ($45 billion less $12 billion debt),” he said.
Shares of X and xAI will be exchanged for shares in a new xAI Holdings Corp company. Control of X’s current debt will not change, according to the Wall Street Journal.
Musk reportedly did not ask investors for approval before the deal, but has said it will facilitate greater integration of Grok into X. The company has not yet said what the transaction will imply for X’s employees.
X previously had a 10% share in xAI, and investors who had backed Musk’s purchase of X were given a 25% stake in xAI.
Posts on X are also used to train xAI by default, even in some circumstances if users opt out.
The social media platform’s valuation has dropped significantly since Musk’s acquisition; in December, it was estimated at just US$12 billion. Its ad revenue as of 3 March was more than $60 million below its first quarter target, the New York Times reported.
Banks including Morgan Stanley were able to sell X’s debt for US$4.7 billion last month, however, as investor interest increased amid Musk’s close alliance with United States President Donald Trump.
xAI has been acquiring property and technology for data centres as it seeks to expand. It aims to upgrade its Colossus AI supercomputer cluster, which it bills as the world’s largest, to include 1 million Nvidia graphics processing units this year.
Its Grok 3 AI model, which the company said could outperform ChatGPT-4o and DeekSeek V3, also rolled out last month.
xAI closed a US$6 billion Series C funding round in December, and has been planning a $10 billion funding round that would value the company at $75 billion.
X raised almost US$1 billion this month, with its equity valued at $32 billion.
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