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Elon Musk Announces $33 Billion Acquisition of X by xAI
In a significant move within the tech landscape, Elon Musk revealed on Friday that he has sold the social media platform X in a massive all-stock deal worth $33 billion to his own artificial intelligence startup, xAI.
The Tesla and SpaceX CEO conveyed the announcement through a statement on X, emphasizing the synergy between xAI and X. He stated, “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent.”
Musk elaborated that this merger aims to harness the strengths of both companies to unlock substantial potential. “By blending xAI’s advanced AI capabilities with X’s extensive reach, we will deliver smarter, more meaningful experiences to billions across the globe,” he added.
He also noted that this partnership would facilitate the creation of a platform that not only reflects reality but also drives human progress.
According to Musk, the acquisition reevaluates xAI at around $80 billion while valuing X at $33 billion, which takes into account $12 billion in debt. Both entities remain privately held and, as such, are not obligated to disclose detailed financial information.
The implications of this acquisition for X’s user base remain unclear. Currently, xAI utilizes data derived from X user posts to enhance its AI models, and users subscribing to X have access to a chatbot named Grok.
Musk’s involvement with X dates back to 2022 when he purchased the platform, then known as Twitter, for $44 billion. His tenure included dramatic changes to its workforce, as well as a revamping of policies surrounding hate speech, misinformation, and user verification, culminating in the rebranding to X.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Musk at the time of the acquisition.
The Emergence of xAI
Following his acquisition of Twitter, Musk launched xAI in March 2023, positioning it as a direct competitor to OpenAI, the creator of ChatGPT. He has claimed that xAI has quickly risen to prominence in the field of artificial intelligence, constructing models and data centers at unprecedented rates.
Established in the San Francisco Bay Area, xAI has recruited a cadre of leading AI researchers previously affiliated with notable organizations such as OpenAI, Google, Microsoft, and Tesla.
Musk, who was a co-founder of OpenAI, has taken a critical stance against the organization following its evolution into a commercial powerhouse alongside Microsoft. This scrutiny has increased since OpenAI’s rapid success with products like ChatGPT.
In April 2023, during a conversation with Fox News host Tucker Carlson, Musk voiced concerns about potential biases in OpenAI’s offerings, suggesting that his vision for an alternative AI aptly named “TruthGPT” would focus on maximizing honesty and understanding human needs without resorting to political correctness.
Musk has also expressed his belief in the necessity of regulating AI, asserting that it poses greater risks than vehicles or rockets, and may even threaten the existence of humanity.
Recently, Musk contemplated a $97.4 billion bid to acquire the nonprofit organization behind OpenAI, arguing that if OpenAI was willing to uphold its original philanthropic mission, he would rescind his offer. However, the bid was promptly dismissed by OpenAI’s CEO, Sam Altman, who stated, “OpenAI is not for sale. The OpenAI mission is not for sale.” Altman attributed Musk’s ongoing interest in OpenAI as tactical competition rather than a genuine intent to better AI technology.
As the landscape of artificial intelligence continues to evolve, this merger marks a noteworthy chapter in Musk’s ventures and the broader tech industry.
Source
globalnews.ca