xAI, an artificial intelligence startup, has acquired X, the social media platform formerly known as Twitter, in a $33 billion all-stock transaction.
Elon Musk owns both xAI and X. The deal values xAI at $80 billion and X at $33 billion, factoring in the company’s previous debt. Financial performance of both xAI and X are not available.
This move consolidates Elon Musk’s control over both companies and is likely to enhance xAI’s AI training capabilities, particularly for its flagship AI model, Grok, Reuters news report said.
Elon Musk stated that the merger would bring together data, computational power, distribution, and key talent, which could significantly accelerate xAI’s growth and capabilities. However, specifics about the integration process remain unclear, including how X’s leadership will be incorporated into xAI and how investors in both firms will be compensated.
The acquisition has raised eyebrows in the financial and tech communities, with industry analysts expressing mixed reactions.
Paolo Pescatore, an analyst at PP Foresight, called the move “surprising” but acknowledged that it might mark the conclusion of X’s transition under Elon Musk’s ownership.
Gil Luria of D.A. Davidson & Co., noted that the $45 billion valuation was symbolic, as it exceeded Elon Musk’s original $44 billion purchase price of Twitter by $1 billion. This suggests that Elon Musk aims to demonstrate the enhanced value of the combined entity while also sharing some of xAI’s value with X’s co-investors.
Despite the magnitude of the deal, Elon Musk did not seek investor approval, instead informing them that xAI and X had already been collaborating closely. This deeper integration is expected to accelerate advancements in AI, particularly in competition with OpenAI.
Elon Musk’s rivalry with OpenAI has been a central theme in his AI ventures. Having co-founded OpenAI in 2015, he has since distanced himself from the company, publicly criticizing its shift from a non-profit model to a for-profit entity. Earlier this year, Elon Musk and a consortium made a staggering $97.4 billion bid to acquire OpenAI, but the offer was rejected.
In response, Elon Musk pursued legal action to challenge OpenAI’s transformation, though a California judge recently denied his request for an injunction. This legal battle underscores the competition in AI, as companies like OpenAI, Microsoft-backed DeepSeek, and Elon Musk’s own xAI race to develop more advanced AI models.
xAI has been aggressively expanding its capabilities, notably through its Memphis-based supercomputer cluster, “Colossus,” which is reportedly the largest in the world. Additionally, xAI recently released Grok-3, its latest AI chatbot, in an effort to compete more directly with OpenAI’s ChatGPT.
The integration of X and xAI could provide strategic advantages for Elon Musk. X’s vast user-generated content serves as a valuable data source for training AI models, and its real-time nature can enhance AI responsiveness and learning.
Furthermore, the merger strengthens Elon Musk’s grip over AI distribution, ensuring that xAI’s products gain maximum exposure through X’s platform. Given the importance of AI in business and daily life, this move positions Elon Musk as a leading player in the AI revolution.
InfotechLead.com News Desk
