Elon Musk’s xAI Acquires X for $33 Billion in All-Stock Deal

In a surprising twist to his business empire, Elon Musk announced that his artificial intelligence venture, xAI, has officially acquired X (formerly Twitter) in an all-stock transaction valued at $33 billion. This move ties together Musk’s ambitions in AI and social media more tightly than ever before.

In a tweet on Friday, Musk described the merger as a strategic play to combine "xAI’s advanced AI capability and expertise with X’s massive reach." The deal pegs xAI’s valuation at $80 billion and X’s at $33 billion, including the $12 billion in debt Musk assumed when he purchased Twitter in 2022.

Despite the significant loss in X’s valuation since Musk’s initial $44 billion acquisition, X CEO Linda Yaccarino remained optimistic, posting: “The future could not be brighter.”

Since founding xAI in mid-2023, Musk has continuously emphasized the importance of integrating the platform with his social media venture. xAI’s chatbot, Grok, was one of the earliest tools embedded within X, and recently expanded beyond the platform, now also integrated with Telegram.

xAI employees were already closely linked to X, often using company laptops and working within the same infrastructure, according to earlier reports.

The acquisition echoes a familiar Musk strategy: blending ventures he controls. In 2016, Tesla acquired SolarCity—where Musk was the largest shareholder and his cousin was CEO—for $2.6 billion. Musk did not mention Tesla in this announcement, despite joking last week, “I have, like, 17 jobs,” during a rushed Tesla all-hands meeting.

While xAI’s valuation has been on the rise—reportedly hitting $50 billion in a November 2024 funding round—it’s unclear what this acquisition means for existing X shareholders. Musk previously stated that X investors would own 25% of xAI, but there has been no confirmation of this being honored.

Musk didn’t mention his broader vision for X as an “everything app” or his push for it to manage users' entire financial lives in this announcement, though he did repeat his mantra of X being the “digital town square.”