Musk acquires X with his xAI company in $33 billion merger deal

Big X, meet Little X.

Elon Musk‘s X acquisition by his own artificial intelligence company xAI represents a significant consolidation of his tech empire, combining social media and AI development under one roof. The $33 billion all-stock transaction values xAI at $80 billion and creates a vertically integrated company that leverages X’s massive user base for AI training while deploying AI capabilities across the platform. This move highlights the increasing convergence between social media platforms and AI development as companies race to integrate these technologies.

The big picture: Musk has transferred ownership of social media platform X to his artificial intelligence company xAI in a $33 billion all-stock transaction that values xAI at $80 billion.

• Both companies are privately held and not required to disclose financial details to the public.
• The deal formalizes an already intertwined relationship, as xAI has been using X’s data to train AI models while X users have access to xAI’s chatbot Grok.

Key details: The billionaire entrepreneur announced the acquisition on Friday through a post on X, emphasizing how the merger will create significant synergies.

• Musk described the merger as a step to “combine the data, models, compute, distribution and talent” of both companies.
• He claimed the combined entity would “unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Timeline context: This acquisition comes approximately 18 months after Musk purchased Twitter for $44 billion in 2022 and about a year following his launch of xAI in 2023.

• After acquiring Twitter, Musk dramatically reduced staff, altered policies on hate speech and misinformation, changed user verification systems, and rebranded the platform as X.
• xAI was established as a separate AI development company with access to X’s vast datasets for training purposes.

Between the lines: The deal effectively transfers X’s assets to Musk’s AI venture without requiring additional capital investment while simultaneously boosting xAI’s valuation.

• The $33 billion valuation for X represents a significant markdown from the $44 billion Musk paid to acquire Twitter in 2022.
• Meanwhile, the $80 billion valuation for xAI positions it as a major player in the competitive AI development landscape.

User impact: It remains unclear whether the acquisition will result in noticeable changes for X users in the immediate future.

• Musk promised the combined company would “deliver smarter, more meaningful experiences to billions of people.”
• The integration likely formalizes existing collaborations rather than introducing entirely new features, as xAI was already using X data and deploying AI features on the platform.