Elon Musk has announced that his artificial intelligence company, xAI, is acquiring the social media platform X in an all-stock deal worth $33 billion. This move aims to integrate AI technology with the social networking space, unlocking new possibilities for innovation.
Strategic Integration of AI and Social Media
X, which boasts over 600 million users, is now deeply intertwined with xAI’s vision. According to Musk, the merger will allow the two companies to combine their resources, including data, AI models, computing power, distribution networks, and talent. He believes this integration will help create a platform that not only reflects but also accelerates global progress.
Financial Aspects of the Acquisition
The deal places xAI’s valuation at $80 billion, while X is valued at $33 billion, inclusive of its $12 billion debt. Musk had previously purchased Twitter (now X) for $44 billion in 2022, a transaction that involved substantial debt. Following that acquisition, he launched xAI in 2023 and has since invested billions in high-end AI hardware, including Nvidia chips.
xAI’s AI Model Competes with Industry Giants
In February, xAI introduced Grok 3, the latest version of its AI chatbot. Musk claims that Grok 3 is significantly more advanced than its predecessor, leveraging ten times the computational power. This development positions xAI as a competitor to OpenAI’s ChatGPT and China’s DeepSeek.
Musk vs. Altman: A Rivalry in AI
Elon Musk co-founded OpenAI in 2015 alongside Sam Altman and other industry leaders. However, Musk departed three years later. OpenAI’s launch of ChatGPT in 2022 propelled Altman into the spotlight, escalating tensions between the two tech moguls. Their rivalry has since turned contentious, marked by legal disputes and competitive advancements in AI.
Impact on X’s Advertising Revenue
Industry analysts predict that X’s advertising revenue will grow in 2025, partly due to Musk’s influence in the political and corporate sectors. Many brands reportedly continue advertising on X to avoid potential legal or financial consequences tied to Musk’s political affiliations and corporate leverage.
Conclusion: A New Era for X and xAI
With the merger of X and xAI, Musk envisions a future where social media and artificial intelligence converge to reshape digital interaction. This bold move sets the stage for unprecedented AI-driven advancements in the online space.
