Elon Musk Says xAI Startup Buying X Platform
AFP/APP
San Francisco: Elon Musk on Friday announced that his artificial intelligence startup, xAI, is acquiring his social networking platform, X, in a deal that values the company, formerly known as Twitter, at $33 billion.
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk stated in a post on his social network.
X has more than 600 million users, and according to Musk, its future is “intertwined” with that of xAI, which was launched two years ago.
“Today, we officially take the step to combine the data, models, compute, distribution, and talent,” Musk said regarding the merger of the two companies. “This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
The companies are merging through an all-stock deal, valuing xAI at $80 billion and X at $33 billion, factoring in the social network’s $12 billion debt.
Musk acquired Twitter for $44 billion in late 2022, a deal that included substantial debt financing. The following year, he launched xAI and invested billions in high-end Nvidia chips to power the venture.
In February, xAI released Grok 3, the latest version of its chatbot, which Musk hopes will gain traction in the highly competitive AI market, competing against ChatGPT and China’s DeepSeek. Musk has promoted Grok 3 as “scary smart,” boasting ten times the computational resources of its predecessor, which was launched in August last year.
Grok 3 is also positioned as a direct competitor to OpenAI’s ChatGPT, reigniting a rivalry between Musk and OpenAI CEO Sam Altman. Musk and Altman were among the 11-person team that founded OpenAI in 2015. Initially intended as a counterweight to Google’s dominance in artificial intelligence, the project received early funding from Musk. However, he left the company three years later.
The 2022 release of ChatGPT propelled OpenAI and Altman into the global spotlight, fueling a bitter and increasingly litigious rivalry between the two tech figures.
The billionaire owner of X, who is also the world’s richest person, has been a major financial backer of former US President Donald Trump.
Additionally, he heads a Department of Government Efficiency that has been cutting government employee numbers.
Meanwhile, industry analysts at Emarketer predict that ad revenue at X will grow this year. Some brands reportedly fear potential retaliation from Musk if they choose not to advertise on the platform. “Many advertisers may view spending on X as a cost of doing business in order to mitigate potential legal or financial repercussions,” said Emarketer principal analyst Jasmine Enberg.
