(CNN) — Elon Musk announced on Friday evening the sale of his social media platform, X, to his artificial intelligence company, xAI. This deal values X at $33 billion, which is significantly less than what Musk initially paid for it in 2022 but represents a remarkable recovery from a recent low valuation.

In a post on X, Musk stated, ‘xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent.’ He emphasized that this union will unlock significant potential by integrating xAI’s advanced capabilities with the extensive reach of X.

However, Musk did not reveal immediate changes for X, despite the existing integration of xAI’s Grok chatbot into the platform. He expressed optimism that the combined entity could ‘deliver smarter, more meaningful experiences,’ estimating the total value of the merged companies at $80 billion.

Musk, who acquired X and revamped its operations, has faced various challenges since his takeover, including a significant drop in advertising revenue due to controversial management decisions. Recent estimates suggest that X’s value had plummeted to 80% less than Musk’s purchase price as reported by Fidelity, yet it appears to be on an upward trend again.

Some major advertisers are gradually returning to X after a significant boycott following an increase in hate speech and misinformation. The stabilization of the brand value has positively impacted bondholders, allowing them to offload their debt holdings at a respectable return.

Musk’s strategic merger with xAI may streamline his focus amidst his vast commitments in technology and governance, particularly as he continues to establish a foothold in the artificial intelligence landscape.

As xAI pushes further into the AI domain, it remains to be seen how the merger with X will impact Musk’s long-term aspirations and the landscape of social media.