Elon Musk has announced that his artificial intelligence startup, xAI, is acquiring his social networking platform, X, in a deal that values the company, formerly known as Twitter, at an impressive $33 billion.
In a recent post on X, Musk shared, “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.” With more than 600 million users, the future of X is described as “intertwined” with xAI, which was launched two years ago.
“Today, we officially take the step to combine the data, models, compute, distribution, and talent,” Musk stated, underscoring the strategic integration of the two companies.
The acquisition is structured as an all-stock deal, valuing xAI at $80 billion while taking into account X’s $12 billion debt. Mr. Musk originally purchased Twitter for $44 billion in late 2022, a transaction that included significant debt. Shortly afterward, in 2023, he launched xAI, investing heavily in high-end Nvidia chips to bolster the venture.
In February, xAI unveiled its latest chatbot iteration, Grok 3, which Musk believes will stand out in the competitive landscape dominated by players like ChatGPT and China’s DeepSeek. Musk described Grok 3 as “scary smart,” boasting ten times the computational resources of its predecessor released in August.
Grok 3 now finds itself competing directly with OpenAI’s ChatGPT, placing Musk at odds with his former collaborator and now rival, Sam Altman. Both Musk and Altman were instrumental in founding OpenAI in 2015, a project created to challenge Google’s stronghold on artificial intelligence that initially received funding from Musk himself. However, after Musk departed the collaboration three years later, OpenAI’s release of ChatGPT in 2022 transformed Altman into a leading figure in the tech world.
Unfortunately, the amicable beginnings have deteriorated into a contentious and litigious relationship. Musk, identified as the world’s richest person, is also a significant financial backer of former President Donald Trump and oversees a Department of Government Efficiency that has been actively reducing government workforce size.
Industry analysts at eMarketer recently forecast a boost in advertising revenue for X this year. As brands navigate their relationship with Musk, there is a growing perception that spending on the platform may be viewed as a necessary expense to avoid potential legal or financial repercussions. Principal analyst Jasmine Enberg noted, “Many advertisers may view spending on X as a cost of doing business in order to mitigate potential legal or financial repercussions.”
As this unfolding narrative illustrates, the intersection of technology, business, and politics continues to shape the future of both xAI and X.
Edited By Ali Musa
Axadle Times International – Monitoring.
