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Elon Musk announced on Friday that his artificial intelligence venture xAI has officially merged with X, his social media platform, in an all-stock deal valuing xAI at $80 billion and X at $33 billion.
Musk, who is recognized as the wealthiest individual globally, shared his insights on the merger on X, stating, “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent.”
He expressed optimism about the partnership, suggesting it would “unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
This merger follows Musk’s acquisition of Twitter for approximately $44 billion in late 2022, after which he implemented significant cost reductions and rebranded the platform as X.
xAI was established by Musk less than two years prior, with ambitions to “understand the true nature of the universe.” The firm has positioned itself as a competitor to established AI leaders, such as OpenAI, which Musk co-founded in 2015 as a non-profit organization. Since departing from OpenAI, Musk has publicly criticized the company and its CEO Sam Altman, particularly regarding the strategic direction taken by OpenAI.
Under Musk’s leadership, xAI has been developing large language models and AI software products designed to rival those offered by OpenAI, Google, Microsoft, Meta, and other tech giants. The interconnectedness of X and xAI is already visible, with xAI’s Grok chatbot integrated into the X platform.
In June, xAI unveiled plans to build a supercomputer in Memphis, Tennessee, dedicated to training Grok, and in September, Musk announced that some components of the supercomputer, dubbed Colossus, had already become operational.
Last year, in a financing round, xAI garnered a valuation of around $50 billion, with Bloomberg reporting recently that talks were underway to raise funds at a $75 billion valuation. In contrast, OpenAI was nearing the completion of a fundraising effort that would place its value at approximately $260 billion, while generative AI firm Anthropic achieved a valuation of $61.5 billion earlier this month.
Beyond overseeing Tesla, SpaceX, xAI, and X, Musk has spent a significant portion of this year in Washington, D.C., playing a prominent role in President Donald Trump’s second administration.
After contributing $270 million to support Trump and other Republican initiatives in the 2024 campaign, Musk has taken on the role of head of the newly established Department of Government Efficiency (DOGE), which aims to reduce governmental expenditures and eliminate unnecessary regulations. This position potentially allows Musk to influence policies that could favor his various business interests.
This merger is not Musk’s first venture into consolidating his enterprises. In 2016, Tesla completed an acquisition of SolarCity for $2.6 billion, a solar energy company founded by his cousins and backed by Musk himself. The acquisition faced scrutiny from Tesla shareholders, who alleged it constituted a bailout of SolarCity and breached fiduciary duties that financially benefited Musk. However, Delaware courts ultimately ruled in favor of Musk and allowed the transaction to proceed without compensatory restitution to Tesla.
WATCH: X acquires xAI
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