Musk Sells X to xAI in All-Stock Transaction

Elon Musk’s xAI acquired his social media platform X, bringing together two of the entrepreneur’s businesses. The deal is worth $45 billion in an all-stock transaction.

Musk confirmed the deal in a post on X, which includes $12 billion worth of debt, stating it would enable the combination of data, models, computing, distribution, and talent from both companies. The deal values the tech mogul’s AI company at $80 billion and X at $33 billion. Both X and xAI are privately owned, with overlapping major investors and shared resources.

The acquisition could represent an effort to shield investors, who supported Musk’s acquisition of X, from financial losses. In addition, the move could help enhance xAI’s capability to train its AI models. Sources say the tie-up is expected to allow for deeper integration of the company’s AI chatbot with X. xAI’s Grok chatbot, a significant feature of X, utilizes posts from the social media platform as a key part of its training data.

According to Musk, the merger will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach. The acquisition comes just over two years after Musk purchased Twitter for $44 billion, marking a significant shift in the platform’s direction. Despite the challenges faced by X, including a reduction in its workforce and advertiser withdrawals, Musk touted it as one of the most efficient companies in the world.