Elon Musk's artificial intelligence company xAI is acquiring social media platform X in an all-stock transaction.
According to Musk, xAI is valued at $80 billion, while X is valued at $33 billion after accounting for $12 billion in debt. The deal comes less than two years after Musk acquired the former Twitter network in November 2022 for $44 billion and took it private.
The current valuation of X appears unexpectedly high. After Musk assumed control and shifted the platform’s political orientation, many advertising partners exited, citing the rise of hate speech and content moderation concerns. However, the Financial Times recently reported that X’s value may have recovered, in part due to Musk’s ties to the Trump administration.
Bringing infrastructure and operations closer together
Founded just two years ago, xAI has rapidly become one of the world’s most prominent AI labs, building large-scale models and infrastructure at considerable speed and scale.
X, the platform formerly known as Twitter, now describes itself as a digital marketplace with more than 600 million active users. Musk claims that in the past two years, it has become "one of the most efficient companies in the world" following significant workforce reductions after his takeover.
The two platforms are already linked through the X chatbot Grok, which is based on xAI’s models. The merger is intended to further integrate the two companies. It allows shared access to data, AI models, computing resources, and personnel. Musk says the fusion of xAI’s technology with X’s user base should enable "smarter, more meaningful experiences to billions of people."
Internal censorship controversy
Grok recently made headlines when it described Elon Musk and Donald Trump as the "biggest spreaders of misinformation." In response, xAI censored the chatbot, prompting backlash from X users. The company later reversed the decision.
To date, xAI has raised at least $12 billion from investors with the goal of building more advanced AI systems. Alongside the acquisition of X, the company recently purchased a startup focused on generative video AI and partnered with Nvidia to launch an AI infrastructure fund worth at least $30 billion. In February, xAI released Grok 3, which it describes as one of the most powerful AI models currently available.
According to Musk, the long-term goal of xAI is to create superintelligent AI capable of solving advanced scientific and mathematical problems, contributing to research areas such as dark matter, gravity, and the Fermi paradox.
