Elon Musk Sells Twitter Rebranded X to AI Firm xAI for $33 Billion

Elon Musk has sold social media site X to his AI company xAI for $33 billion, as part of a $80 billion deal that values xAI at $80 billion. Musk, who owns SpaceX and Tesla, said the move will "unlock immense potential" by combining xAI's AI capabilities with X's massive reach. The deal is an all-stock transaction between two privately held companies.

In a significant move that underscores the growing importance of artificial intelligence in the tech industry, Elon Musk's AI company xAI has acquired social media site X for $33 billion, as part of an $80 billion deal that values xAI at $80 billion. The transaction, announced on March 28, 2025, is an all-stock deal between two privately held companies, highlighting Musk's strategic approach to integrating AI capabilities with a massive user base.

The acquisition, valued at $33 billion for X, represents a $14 billion discount from the $44 billion Musk paid for the social media company in 2022. Musk, who also serves as CEO of Tesla and SpaceX, and an advisor to President Donald Trump, bought the site then known as Twitter, renamed it X, and gutted its staff, changing its policies on hate speech, misinformation, and user verification.

xAI, founded in 2023, has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale. The company's ambitions are reflected in its recent expansion of its supercomputer, Colossus, in Memphis, Tennessee, to develop new AI models at faster rates.

Musk's announcement on X highlighted the potential of the combined company, stating that "xAI and X's futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach."

The merger is expected to enhance user experiences on X by leveraging xAI's advanced AI capabilities. xAI already uses data from X user posts to train its AI models, and paying X users have access to its AI chatbot, Grok.

Despite the significant discount, the deal underscores Musk's confidence in the value of integrating AI capabilities with a large user base. The transaction is likely a stock swap, with X investors getting paid out in xAI shares. Both companies have mutual investors, including venture firms Andreessen Horowitz and Sequoia Capital, as well as Fidelity Management, Vy Capital, and Saudi Arabia's Kingdom Holding Co.

The acquisition is not Musk's first merger of his entities. In 2016, Tesla acquired SolarCity for $2.6 billion, a deal that was later challenged by Tesla shareholders but ultimately allowed to stand without any remuneration back to the automaker.

This deal comes amidst Musk's increased involvement in Washington, D.C., as a central figure in President Donald Trump's second administration. Musk has contributed $270 million to help Trump and other Republican candidates and causes in the 2024 campaign and was put in charge of the newly formed Department of Government Efficiency (DOGE), which aims to eliminate government expenses and regulations.

The combined company's future remains to be seen, but the deal signals Musk's continued focus on leveraging AI to drive innovation and growth across his various ventures.