Elon Musk’s artificial intelligence startup, xAI, has acquired social media platform X, formerly known as Twitter, in an all-stock transaction. The deal, which Musk announced on X on Friday, values xAI at $80 billion and X at $33 billion, after accounting for $12 billion in debt. The acquisition firmly integrates the influential social media platform into Musk’s AI venture, which was founded in 2023 to compete with OpenAI.
With this move, xAI and X will merge their resources, including data, computing power, and talent, to accelerate AI development. Prior to the deal, xAI’s chatbot, Grok, was already integrated into X, but the acquisition cements the platform’s role in Musk’s broader AI ambitions. Reports indicate that shares of both companies will be exchanged for equity in a newly formed entity, xAI Holdings Corp., with executives believing the consolidation will make it easier to raise funds.
Musk’s AI startup has aggressively expanded, attracting top researchers from Google DeepMind, Microsoft, and OpenAI while building large-scale AI data centers. The company raised $6 billion in December, pushing its valuation to $45 billion, which has since climbed to $80 billion. Industry observers note that xAI has been rapidly catching up with OpenAI, releasing competitive AI models like Grok 3. However, Musk remains entangled in a legal battle with OpenAI, challenging its shift to a for-profit model while also attempting a takeover bid.
By acquiring X, Musk has secured a major advantage in AI development, as the platform’s vast archive of user-generated content provides a rich data source for training AI models. Additionally, X serves as a direct consumer channel for xAI’s technology. Analysts suggest the acquisition highlights X’s strategic importance in advancing Musk’s AI ambitions, further blurring the lines between his many business ventures.