Elon Musk's xAI buys X social media platform for $33 billion
Elon Musk’s xAI artificial intelligence firm has acquired Musk’s X, the social media outfit formerly known as Twitter, for $US33 billion ($A52 billion).
The all-stock deal announced on Friday consolidates two of Musk’s multiple portfolio companies, which also include automaker Tesla and SpaceX, and potentially eases the billionaire’s ability to train his AI model known as Grok. Including $US12 billion in debt, the deal is valued at $US45 billion.
“The choice of $US45 billion is not a coincidence,” said D.A. Davidson & Co. analyst Gil Luria.
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By continuing you agree to our Terms and Privacy Policy.“It is $US1 billion higher than the take-private transaction for Twitter in 2022” and he can share the value of the xAI business with Twitter co-investors.
Musk announced the transaction in a post on X, saying that the combined entity would be valued at $80 billion.
“xAI and X’s futures are intertwined,” wrote Musk. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
Neither X nor xAI spokespersons immediately responded to a request for comment. Some of the deal’s specifics were not yet clear, such as whether investors approved the transaction or how investors may be compensated.
Musk, the world’s wealthiest man, has also consolidated his power in Washington by overseeing the Trump administration’s cost-cutting efforts as head of the so-called Department of Government Efficiency, or DOGE.
His xAI startup was launched less than two years ago and recently raised $US6 billion in a funding round that valued the company at $US40 billion, sources told Reuters.
In February, Musk, 53, made a $US97.4 billion bid with a consortium for the ChatGPT maker OpenAI, which was rejected, with OpenAI saying that the startup was not for sale. Musk co-founded OpenAI with CEO Sam Altman in 2015.
As competition in AI intensifies, xAI has been ramping up its data centre capacity to train more advanced models, and its supercomputer cluster in Memphis, Tennessee, called Colossus, is touted as the largest in the world.
xAI introduced Grok-3, the latest iteration of its chatbot, in February, as it tries to compete with Chinese AI firm DeepSeek and Microsoft-backed OpenAI.
Musk clinched a deal in 2022 to buy X for $US44 billion, ending its run as a public company since its 2013 initial public offering, declaring that “the bird is freed” once the acquisition closed.
Separately, a US judge on Friday rejected a bid by Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders by waiting too long to disclose his initial investment in the company.
