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Musk Merges X and xAI, Valuing the Social Network at $33 Billion
In a significant development, Elon Musk announced the merger of X, the platform previously known as Twitter, with his artificial intelligence venture, xAI. This merger places a valuation of $33 billion on X, which Musk had acquired for $44 billion in 2022.
The acquisition was executed as an all-stock transaction, resulting in a collective valuation of $80 billion for xAI and $33 billion for X, after accounting for $12 billion in debt, as per Musk’s statement on the platform.
Notably, xAI and X had already established a working relationship, with xAI’s AI model, Grok, being trained on content from X. Grok is accessible to users of X, particularly benefiting those with paid subscriptions through enhanced usage limits and additional features.
“The futures of xAI and X are fundamentally connected,” Musk articulated. He emphasized that the merger would facilitate the integration of data, computational resources, distribution channels, and talent, ultimately harnessing the strengths of both xAI’s advanced AI and X’s extensive user base.
Musk envisions this combined entity as a platform not merely reflecting societal trends but actively contributing to humanity’s advancement.
As both companies are privately held, several details surrounding the merger remain ambiguous, including whether investor approval has been secured and the means of compensating stakeholders, as reported by various sources.
Since Musk’s takeover, the valuation of what was formerly Twitter has fluctuated significantly. In September 2024, Fidelity, an investor in X, estimated its worth to be less than $10 billion. However, there was a notable recovery in X’s valuation coinciding with Musk’s increasing sway within the U.S. government, especially following the election of President Donald Trump.
In the broader context of AI, Musk is also reportedly seeking to acquire OpenAI and is opposing its transition from a nonprofit to a for-profit framework.
Source
arstechnica.com