Elon Musk Sells X to xAI in a USD 33 Billion Deal

Elon Musk has announced a groundbreaking merger between his artificial intelligence startup, xAI, and the social media platform X, formerly known as Twitter.

The all-stock transaction values X at $33 billion and xAI at $80 billion, marking a significant milestone in Musk’s vision to intertwine AI technology with digital communication.

In a post shared on X on March 28, Musk elaborated on the strategic merger, stating, “The futures of xAI and X are interconnected. Today marks the official step to combine our data, models, computing power, distribution channels, and talent.”

He emphasized that the unified entity aims to deliver smarter and more meaningful experiences to billions of users while adhering to its core mission of truth-seeking and advancing knowledge.

Since acquiring Twitter for $44 billion in 2022 and rebranding it as X the following year, Musk has implemented sweeping changes to transform the platform into what he describes as “one of the most efficient companies in the world.”

With over 600 million active users, X has become a digital town square for real-time information. However, its valuation has declined significantly from Musk’s original purchase price due to operational challenges and advertiser departures.

The merger also highlights xAI’s rapid ascent in the AI industry. Founded in 2023, the startup has developed cutting-edge models and data centers at an unprecedented pace.

Its flagship product, Grok—a chatbot integrated into X—has garnered attention for its unique approach to AI-powered interactions. Musk remarked that combining xAI’s advanced capabilities with X’s extensive reach will create a platform that not only reflects reality but accelerates human progress.

Linda Yaccarino, CEO of X, echoed Musk’s optimism by reposting his announcement with the comment, “The future could not be brighter.” Despite enthusiasm from leadership, some users expressed curiosity about why X was absorbed into xAI rather than vice versa, given X’s broader user base.

While details about investor compensation remain unclear, analysts suggest that this move could streamline Musk’s efforts to enhance AI-driven applications across his ventures.

The combined company is poised to redefine digital engagement by leveraging AI technologies at scale—a vision Musk calls “just the beginning” of a transformative journey.