Elon Musk’s xAI acquires X for $33B

Elon Musk is merging his AI company xAI with messaging platform X. According to the billionaire entrepreneur, the futures of both companies are “intertwined”.

Musk announced the acquisition on his platform X last Friday.

“Today, we officially take the step to combine the data, models, compute, distribution, and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk said on X.

“The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress,” he continued.

Musk stated that xAI is valued at $80 billion and X at $33 billion ($45 billion in assets minus $12 billion in debt).

Users don’t seem very happy with the merger and are worried that the contents of their posts and personal data on X are being used to train xAI’s models without compensation or consent. Other users are suggesting that Musk is turning X into “xAI’s personal sandbox” or “private laboratory”.

In October 2022, Musk paid $44 billion for Twitter, which was rebranded as X. Massive layoffs followed, and a lot of advertisers decided to take their business elsewhere, to the point that X was hardly able to break even.

However, since the inauguration of President Donald Trump and Musk’s appointment as head of the Department of Government Efficiency (DOGE), X’s evaluation has risen because investors believe the platform has become more influential. According to Musk, X now has over 600 million active users worldwide and X has been transformed into “one of the most efficient companies in the world”.

xAI was founded in 2023, after Musk had a falling out with OpenAI regarding the company’s original non-profit mission. Since then, Musk has recruited AI researchers from Google, Microsoft, Anthropic, and OpenAI, and built massive AI data centers around the United States.

In February, Musk launched Grok 3 for paying customers, which used 10 times more computing power than Grok 2 during the training process. xAI’s chatbot already utilizes data provided by X. The merger should facilitate this process.