Elon Musk's xAI Acquires Social Media Platform X for $33 Billion

Several years after acquiring Twitter for $44 billion, Elon Musk has announced that his artificial intelligence company xAI has purchased the social media platform, now rebranded as X. In a tweet, Musk revealed this as an all-stock deal, valuing xAI at $80 billion and X at $33 billion, which includes $12 billion of debt assumed as part of the acquisition.

X's CEO Linda Yaccarino responded to the deal by expressing optimism about its future, despite a reported value loss of approximately $11 billion since its 2022 sale, stating "the future is bright."

Although Musk hasn't yet transformed X into an "everything app," he has closely integrated the two businesses since launching xAI in the summer of 2023. Musk emphasized that access to Twitter/X's vast data offers significant advantages to xAI, prominently featuring xAI's Grok tool within the social media app. This week, Grok expanded beyond X with new integrations, including Telegram.

This deal echoes Musk's previous mergers between companies under his control. In 2016, Tesla Motors acquired SolarCity for $2.6 billion, where Musk was the largest individual shareholder and his cousin Lyndon Rive served as CEO. Following the acquisition, Tesla dropped "Motors" from its name. While announcing this latest transaction, Musk made no mention of Tesla, nor did he address whether this deal adds to or reduces his workload after recently telling employees at an impromptu meeting that he "basically has 17 jobs."

The tweet also did not touch on Musk’s ambition for the service to handle "someone's entire financial life," but it reiterated X's role as the "digital town square." Reports earlier this year indicated that xAI employees were simultaneously working for X, using company laptops, and accessing its codebase. Musk had previously claimed that X investors would own 25% of xAI, though as of January, X employees holding stakes in the company had not yet realized this benefit.

Despite a temporary decline in X’s valuation following its 2022 acquisition, recent reports suggest it has rebounded. Meanwhile, as other companies in the sector like Nvidia and OpenAI see rising valuations, xAI’s worth has similarly increased. Musk, who co-founded OpenAI and was an early investor, left in 2018 and later became a competitor and legal adversary. According to The Wall Street Journal, xAI’s valuation surged to $50 billion in a funding round last November, more than doubling from its $24 billion valuation during another round in spring 2024.