Elon Musk's artificial intelligence company, xAI, has acquired his X Corp (formerly Twitter) for approximately $52.3 billion, marking the latest move by the billionaire to rapidly consolidate power. This all-stock transaction integrates two of Musk's companies, which also include automaker Tesla and SpaceX, and could potentially help Musk train his artificial intelligence model, Grok.
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03-31, 2025Musk announced the deal in an X post on Friday, local time, stating that xAI is valued at $80 billion (A$127 billion) and X is valued at $33 billion (A$52.3 billion), or $45 billion minus $12 billion in debt. Musk wrote, "The future of xAI and X are intertwined. Today, we are formally taking steps to combine data, models, compute, distribution, and talent." Musk added that X has over 600 million active users.
Details of the transaction have not yet been disclosed, such as how investors might be compensated, how X's leaders will integrate into the new company, and the prospects for regulatory review. PP Foresight analyst Paolo Pescatore said the development was surprising, stating, "In some ways, it brings an end to a turbulent chapter in the X saga." D.A. Davidson & Co analyst Gil Luria said, "The $45 billion option is no coincidence, it's $1 billion more than the 2022 Twitter privatization deal."
According to Reuters, Musk's xAI startup, founded less than two years ago, recently raised $10 billion in a funding round, valuing the company at $75 billion. In February, xAI launched the latest version of its chatbot, Grok-3, in an attempt to compete with Chinese AI company DeepSeek and Microsoft-backed OpenAI. The X platform can further distribute xAI products while providing real-time feedback on user ideas, screenshots, and other data.
Earlier this year, Musk and a consortium bid $97.4 billion for ChatGPT maker OpenAI but were rejected, with OpenAI stating that the company was not for sale. Musk co-founded OpenAI with CEO Sam Altman in 2015. As competition in the artificial intelligence field intensifies, xAI has been increasing its data center capacity to train more advanced models, with its "Colossus" supercomputer cluster in Tennessee touted as the world's largest.
Musk reached an agreement in 2022 to acquire X (then Twitter) for $44 billion, ending the company's status as a public company since its initial public offering in 2013, and announced "the bird is freed" after the acquisition was completed. Following the acquisition, he laid off a large portion of the company's employees, leading advertisers to flee the platform and revenue to decline rapidly. A source familiar with the transaction told Reuters that the seven banks that provided Musk with $13 billion in loans to acquire X kept the debt on their books for two years until they could sell it in a single go last month.
Espen Robak, founder of Pluris Valuation Advisors, which specializes in illiquid assets, said that investors who bought the debt from the banks will profit after the merger. "If the debt hasn't been paid off in full, it's certainly worth more now." Separately, a U.S. judge on Friday rejected Musk's request to dismiss a lawsuit alleging that he defrauded former Twitter shareholders by delaying the disclosure of his initial investment in the company.
