Elon Musk’s artificial intelligence startup xAI has formally acquired his social media platform X in an all-stock transaction valued at approximately$ 45 billion. This figure includes$ 12 billion in debt, bringing the implied equity value of X to$ 33 billion.
The merger may” combine the information, models, determine, transmission and skills” of the two businesses, according to Musk’s statement on X. ” This combination will unlock enormous potential by blending xAI’s advanced AI ability and experience with X’s large reach”, the world’s richest person added.
Both firms are privately held and controlled by Musk, so shareholders in X may be compensated with shares in xAI. Some owners have previously invested in xAI, including Fidelity Management &, Research, Andreessen Horowitz, Sequoia Capital, and Kingdom Holding Company. Musk has never disclosed how X’s management staff will be incorporated into the AI research company.
Deeper Grok connectivity and a rise for X
X and xAI are now linked through the Grok AI robot, which is integrated into the X system. Grok was immediately trained by xAI on open data, with its more recent versions refined using xAI’s Colossus computer in Memphis, TN. An xAI investment told Reuters the merger may lead to deeper inclusion of the robot within X.
xAI has gained momentum in the AI industry, a victory that X’s co-investors will then profit from. Musk claims xAI’s post-acquisition value is$ 80 billion, which aligns with a projected$ 75 billion valuation discussed last month, according to Bloomberg.
Musk co-founded OpenAI in 2015 but left over conflicts of interest with AI growth at Tesla, while also as , disputes regarding OpenAI’s determination to become a for-profit object. He has since changed his tune on the subject.
X’s path since 2022 has been more dangerous. That time, Musk acquired the app — formerly known as Twitter — , for about$ 44 billion. He consequently laid off about 80 % of employees to cut costs, considerably altered content tolerance techniques, and reinstated a number of banned records, including Donald Trump’s.
These choices triggered an migration of ads, many of whom deemed the program very difficult. People also began leaving in droves amid worries over a wave of hate speech and misinformation.
But, X has bounced back somewhat since then, partly due to its AI organizations with Grok and xAI, and partly due to its improved profit margins. Fidelity valued its X stake at$ 13.30 million in February 2025, and the platform has since re-obtained its$ 44 billion valuation.
Social power meets commercial development
Some X people are returning to the system because of Musk’s increasing effect in the White House as head of the Department of Government Performance. This place also grants him the energy to potentially affect regulatory oversight of the acquisition.
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When he was announced as a top government adviser in January, critics raised concerns that his broad involvement in secret enterprises, including Tesla and SpaceX, created significant conflicts of interest, possibly resulting in decreased oversight of his companies or biased decisions in giving government contracts. However, he has suggested that he will step aside from DOGE at the end of May.
Musk has merged two of his companies in the past, with the consolidation of solar installation business SolarCity by Tesla in 2016. Tesla owners disputed this, arguing that the offer generally benefited Musk privately as he was the largest investor in both businesses and accusing him of using Tesla’s resources to loan out a struggling company founded by his cousins.
