Elon Musk has finalised the merger of his artificial intelligence venture xAI with social media platform X (formerly Twitter) in a transaction valuing xAI at $80 billion and X at $33 billion. The all-stock deal, announced on March 28, consolidates Musk’s control over both entities while positioning xAI as a dominant force in AI-driven social media.
The acquisition reflects a $45 billion gross valuation for X, offset by $12 billion in debt. While Musk acquired Twitter for $44 billion in 2022, X’s valuation had fluctuated sharply under his ownership, with Fidelity estimating it at just 30% of the original purchase price by late 2023. The merger reverses this decline, aligning X’s worth with Musk’s AI ambitions.
Ownership of both companies remains concentrated under Musk, with X investors—including Andreessen Horowitz, Sequoia Capital, and Saudi Arabia’s Kingdom Holding Co.—likely receiving shares in xAI as part of the stock swap.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk stated. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Key integrations include the Grok chatbot, already embedded in X, which utilises user data to refine interactions. xAI’s Memphis-based Colossus supercomputer, powered by natural gas turbines, will expand to support AI training.
xAI’s valuation surge—from $50 billion in 2023 to $80 billion—outpaces rivals like Anthropic ($61.5 billion) but trails OpenAI ($260 billion). Critics argue the Memphis facility’s development lacks adequate environmental oversight.
The merger follows Musk’s pattern of consolidating assets, including Tesla’s contentious 2016 acquisition of SolarCity. His dual role as CEO of Tesla, SpaceX, and xAI—and his influence in the Trump administration via the Department of Government Efficiency—raises questions about regulatory alignment.
“The future could not be brighter,” said X CEO Linda Yaccarino.