Elon Musk’s AI startup, xAI, has taken ownership of his social media platform X, formerly Twitter, through an all-stock transaction, as he announced in a post on X on Friday.
“xAI has officially acquired X through an all-stock deal,” Musk stated. “This merger values xAI at $80 billion and X at $33 billion ($45 billion minus $12 billion in debt).”
The billionaire owner of xAI — who also leads Tesla, SpaceX, and Neuralink — went on to describe the two companies’ futures as “intertwined.” He added, “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
With this acquisition, X—the influential social media platform Musk bought in 2022, previously known as Twitter—now operates fully under the umbrella of his AI startup, xAI. Founded in 2023 to rival OpenAI, xAI had already integrated its AI chatbot, Grok, into X before the deal. However, Friday’s acquisition further solidifies the connection between two of Musk’s most prominent ventures.
In his post, Musk states that the deal values X at $33 billion, factoring in a $12 billion debt reduction from its original $45 billion enterprise value. Musk initially acquired X for $44 billion in October 2022 and took the company private. However, its valuation has fluctuated significantly over the years, with Fidelity at one point estimating its worth at under $10 billion.
Since President Donald Trump’s inauguration—whom Musk actively campaigned for—X’s valuation has increased, driven by investor confidence in its growing influence. On Friday, Musk stated that X now boasts over 600 million active users.
Musk founded xAI in 2023 and has since strengthened the startup by recruiting top AI researchers from Google DeepMind, Microsoft, and OpenAI while constructing large-scale AI data centers to compete with leading AI developers. To support these initiatives, he embarked on an extensive fundraising effort, securing $6 billion in December, which valued xAI at $45 billion. According to Musk, the company’s valuation has now risen to $80 billion.
xAI has made significant strides in its rapid effort to compete with OpenAI, Google DeepMind, and Anthropic. In February, the company launched Grok 3, an advanced AI model that rivals the industry’s top AI models in benchmarks assessing math, science, and coding capabilities.
Despite xAI’s successes, Musk has continued to interfere with OpenAI, the company he co-founded alongside Sam Altman. He is actively working to obstruct OpenAI’s transition to a for-profit model—a shift crucial for securing future funding. Musk has centered his lawsuit against OpenAI around this transition and, in February, made a $97 billion takeover bid for the company. Although OpenAI’s board swiftly rejected the offer, it may have already influenced the market value of the company’s assets.
A key advantage xAI holds over OpenAI and other competitors is its direct access to X. The vast archive of posts accumulated on the platform provides xAI with a crucial edge in acquiring AI training data. Additionally, X serves as a powerful consumer application, giving Musk’s AI startup a significant channel to reach users.
Musk has a track record of blending his various companies, a practice that has previously led to legal challenges. With xAI’s acquisition of X, the two entities are now essentially unified—highlighting that X’s true value may ultimately be in furthering Musk’s larger AI ambitions.
