The tech tycoon intends to merge the ‘data, models, computing power, distribution channels, and expertise’ from both the application and startup.
Elon Musk’s company xAI has purchased Musk’s X, previously referred to as Twitter, for $33 billion.
The stock-only transaction revealed on Friday brings together two of Musk’s numerous holdings, including Tesla and SpaceX, and could simplify the tycoon’s capacity to develop his AI project called Grok. With an additional $12 billion in liabilities, this agreement totals approximately $45 billion.
“The selection of $45 billion isn’t random,” stated Gil Luria, an analyst from D.A. Davidson & Co. “This figure stands at $1 billion above the privatization deal for Twitter back in 2022.” This allows him to disclose the valuation of the xAI enterprise alongside investors who were part of Twitter.
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Musk shared the news of the deal on social media, stating that the merged company would have a valuation of $80 billion.
Musk stated that xAI and X’s futures are closely linked. He announced today that they are taking the official step to merge their data, models, computing power, distribution channels, and expertise.
Neither the representatives of X nor those from xAI promptly replied to requests for comments. Certain details of the agreement remained undisclosed, including whether the investors had endorsed the transaction and the methods through which investors might receive compensation.
Musk, who tops the list as the globe’s richest individual, has extended his influence in Washington by leading the Trump administration’s austerity measures. He does this under the leadership role of what is dubbed the Department of Government Efficiency, or simply referred to as DOGE.
Less than two years since its inception, his xAI startup recently secured US$6 billion in funding, valuing the company at US$40 billion, according to previous reports.
In February, at the age of 53, Musk proposed a $97.4 billion offer from a consortium to acquire ChatGPT’s developer, OpenAI. This proposal was declined, as OpenAI stated they were not looking to sell. Musk had established OpenAI alongside CEO Sam Altman back in 2015.
With the race in artificial intelligence heating up, xAI has been increasing its data center capabilities to develop more sophisticated models. Its massive supercomputer complex in Memphis, Tennessee, known as “Colossus,” is claimed to be the biggest globally.
In February, xAI unveiled Grok-3, the newest version of its chatbot, as part of its efforts to rival Chinese company DeepSeek and Microsoft-supported OpenAI.
In 2022, Musk secured an agreement to purchase X for $44 billion, concluding its tenure as a publicly traded entity following its IPO in 2013, stating that “the bird is free” upon completion of the acquisition.
In another development, a United States judge dismissed Elon Musk’s attempt to have a lawsuit thrown out on Friday. The lawsuit alleges that Musk misled previous Twitter shareholders by delaying the disclosure of his initial stake in the firm, thereby committing fraud.
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