Musk’s AI Firm Acquires X in Strategic Move
Elon Musk has officially sold X (formerly Twitter) to his artificial intelligence company, xAI, in a deal valuing the social media platform at $33 billion. He announced the move in a post on X on Saturday.
A Powerful Merger
By merging X with xAI, Musk is bringing together real-time data and advanced AI technology under one roof. This combination will allow xAI to improve its AI models using X’s vast user interactions. At the same time, X will benefit from AI-driven features that enhance user experience.
Musk described the deal as a game-changer, saying, “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.” He believes the merger will create smarter, more meaningful experiences for billions of users while staying focused on truth and knowledge advancement.
The Financial Picture
X was valued at $45 billion when Musk acquired it in 2022. However, after subtracting the $12 billion in loans used to finance the purchase, the new valuation stands at $33 billion. Meanwhile, xAI is now worth $80 billion. Musk emphasized that both companies’ futures are now deeply connected, stating, “Today, we officially take the step to combine the data, models, compute, distribution, and talent.”
The AI Battle Heats Up
The artificial intelligence industry has become highly competitive, with tech giants racing to develop cutting-edge AI models. By merging X with xAI, Musk is creating a closed-loop system where his AI company controls both the technology and the data source. This move positions him to compete with major AI firms like OpenAI and leading Chinese AI companies, which rely on external data partnerships.
Earlier this year, Musk attempted to buy OpenAI for $97.4 billion, but the offer was rejected. OpenAI, co-founded by Musk in 2015, has since partnered with Microsoft and secured billions in funding. Musk has criticized the company for straying from its original mission and even filed a lawsuit to challenge its transition to a for-profit model.
xAI’s Next Steps
With this merger, Musk is ramping up efforts to dominate the AI space. His company is building a massive supercomputer, known as Colossus, and has already launched its chatbot, Grok-3. Grok-3 uses X both to distribute AI products and to gather data for future AI improvements.
Although Musk has not disclosed how the deal will affect leadership and employees at X and xAI, the move marks a major shift in the AI landscape. By integrating AI directly into a global social platform, Musk is positioning his company for long-term dominance in the industry.
The future of X and xAI is now intertwined, and this strategic move could reshape both social media and artificial intelligence as we know it.
