Elon Musk’s xAI has acquired the social media platform X, which was valued at $33 billion in the deal. This move allows xAI to leverage the platform’s data and distribution channels for its AI development, particularly for its chatbot Grok. Musk stated that the merger would enhance the capabilities of both companies, valuing xAI at $80 billion and X at $33 billion after accounting for debt.
The specifics of the deal remain unclear, such as how leadership from X will be integrated into the new company. There are also questions about potential regulatory scrutiny, though Musk has emphasized the importance of combining their resources. Saudi investor Prince Alwaleed bin Talal highlighted that the deal would boost the value of his investments in X and xAI to between $4-5 billion.
xAI, which launched less than two years ago, competes with AI giants like OpenAI and Chinese startup DeepSeek. Musk has been focused on expanding xAI’s capabilities, particularly its supercomputer “Colossus” in Tennessee, one of the largest in the world. The merger could help xAI distribute its products through X, tapping into real-time user data from the platform.
Despite early challenges following his purchase of Twitter, Musk has seen growth in X’s operating performance and investor interest in AI companies. The deal follows the sale of $13 billion in debt from banks that financed Musk’s acquisition of X, providing financial stability.