Elon Musk's xAI Acquires X for $33 Billion in All-Stock Deal

Elon Musk, the CEO of Tesla, has announced that his artificial intelligence startup, xAI, has acquired the social media platform X, formerly known as Twitter, in an all-stock transaction. The deal values X at $33 billion, including $12 billion in debt, and xAI at $80 billion. Musk emphasized the strategic significance of this acquisition, stating that the futures of xAI and X are intertwined. He highlighted that combining the data, models, compute, distribution, and talent of both entities will unlock immense potential by blending xAI’s advanced AI capabilities with X’s massive reach.

The acquisition comes at a time when xAI has been rapidly expanding its computing resources. Musk has created a massive cluster of 100,000 GPUs, known as Colossus, located in Memphis, Tennessee. This supercomputer is designed to compete with industry giants. xAI’s mission, initially focused on understanding the nature of the universe, has evolved to include the development of an “unfiltered” chatbot called Grok, which has been integrated into the X platform since late 2023.

Musk’s acquisition of Twitter in 2022, which he later renamed X, was initially valued at $44 billion. The deal involved taking out billions of dollars in loans from various lenders. However, X’s financial situation improved after the reelection of Donald Trump and Musk's appointment to run the administration’s Department of Government Efficiency. This turnaround attracted more investors and provided additional security to lenders.

The acquisition has been met with support from key figures within both companies. Linda Yaccarino, the CEO of X, and Igor Babuschkin, the cofounder of xAI, both expressed their enthusiasm for the merger. Yaccarino wrote that the future could not be brighter, while Musk reposted Babuschkin’s supportive message. The implications for X’s employees and Yaccarino’s role remain unclear, as Musk, Yaccarino, and Robert Keele, the head of xAI’s legal team, did not respond to requests for comment.

This acquisition marks a significant step for Musk’s vision of integrating advanced AI capabilities with a widely used social media platform. By combining the strengths of xAI and X, Musk aims to create a powerful synergy that could revolutionize the way AI and social media interact. The deal underscores Musk’s continued influence in the tech industry and his ambition to push the boundaries of AI and social media integration.