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Billionaire entrepreneur Elon Musk has sold his social media company, X, to his artificial intelligence startup, xAI, in a $33 billion all-stock transaction. Musk announced the deal on Friday, stating that the merger aims to enhance AI-driven experiences by integrating xAI’s advanced capabilities with X’s extensive reach.
Both X and xAI are privately held, meaning they are not obligated to disclose financial details publicly. However, Musk confirmed that the deal values xAI at $80 billion and X at $33 billion.
Musk’s Vision for the Combined Companies
In a post on X, Musk described the merger as a pivotal step in AI development, emphasizing the synergies between the two companies.
“xAI and X’s futures are intertwined. 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 wrote. “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.”
Musk originally acquired X, previously known as Twitter, for $44 billion in 2022. His takeover led to significant changes, including mass layoffs, shifts in content moderation policies on hate speech and misinformation, and the rebranding of the platform.
Implications for X Users
While Musk has not announced immediate changes for X users, the acquisition raises questions about potential shifts in the platform’s operations. xAI already utilizes data from X user posts to train its AI models, and premium X subscribers have access to its AI chatbot, Grok. The integration of xAI within X could lead to further AI-driven enhancements, though specific updates remain undisclosed.
Musk’s move aligns with his broader ambitions in the AI industry. The Tesla and SpaceX CEO launched xAI in 2023 as a direct competitor to OpenAI.
Musk to Step Down from Government Role
The merger announcement coincided with another major revelation from Musk—his decision to step down as head of the Department of Government Efficiency (DOGE) at the end of May. Musk, who was appointed as a “special government employee” by President Donald Trump for a 130-day term, has been instrumental in reducing the U.S. deficit by $1 trillion through cost-cutting initiatives.
Musk’s departure from DOGE comes as he continues to position himself at the forefront of artificial intelligence. Earlier this year, he led a consortium of investors attempting to acquire OpenAI, the company behind ChatGPT, for nearly $100 billion. This move was seen as another chapter in the long-standing rivalry between Musk and OpenAI’s CEO, Sam Altman.
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