In a groundbreaking move that fuses artificial intelligence with social media, Elon Musk’s xAI has acquired X, the platform formerly known as Twitter, in an all-stock deal valued at $33 billion. Announced by Musk on X late Friday, the acquisition raises xAI’s valuation to an impressive $80 billion, creating a combined entity that aims to revolutionize both the tech and social media landscapes.
This acquisition represents Musk’s deepening commitment to merging real-time global communication with advanced AI technologies. By acquiring X, Musk intends to integrate xAI’s AI-driven innovations with the massive user base of the social media giant, opening the door to new possibilities in digital interaction. However, the deal raises both excitement and concern as it brings to the forefront questions around data privacy and the power of AI.
Musk first purchased Twitter in October 2022 for $44 billion, including $13 billion in debt, but X’s valuation has fluctuated since then, dipping to as low as $12 billion at one point. With the $33 billion valuation of this deal—after accounting for $12 billion in remaining debt—the deal offers a lifeline to X’s investors, many of whom also back xAI.
For xAI, founded in 2023 to accelerate scientific discovery using AI, this acquisition is a strategic triumph. xAI has already made use of X’s vast data troves to enhance its AI capabilities, such as its chatbot Grok, which competes directly with OpenAI’s ChatGPT. With full ownership of X, xAI will now have unrivaled access to a continuous stream of real-time human interactions, which Musk believes will help fuel its mission of building an AI capable of reasoning, prediction, and unprecedented innovation.
Musk shared his enthusiasm about the merger in his announcement, stating, “This combination will unlock immense potential by blending xAI’s advanced AI capability with X’s massive reach.”
The deal also comes at a pivotal moment for both companies. xAI has been thriving, recently raising $6 billion in funding and unveiling its supercomputer “Colossus,” touted as the world’s largest. Meanwhile, X has struggled to regain its position as a dominant advertising platform, with sales projections for 2025 still lagging behind pre-Musk levels. By folding X into xAI, Musk seems to be shifting the platform away from advertising revenue to focus on data-driven AI innovation.
Analysts see both promise and risk in this deal. Fred Lambert, editor-in-chief of Electrek, suggested, “This is Musk negotiating with himself to consolidate his empire,” noting that the all-stock nature of the deal merges the investor bases of both companies, which include big players like Andreessen Horowitz, Fidelity, and Sequoia. However, some critics argue that the deal is a bailout for Musk’s 2022 acquisition of Twitter, which many see as overpriced.
There are also concerns regarding privacy. As xAI now owns X, the platform’s 500 million-plus users could see their data—including posts and private messages—used to train AI models. Cognitive scientist Gary Marcus cautioned, “Everything you’ve ever posted here—and maybe your DMs—will now potentially go toward training xAI.”
Musk’s ambition is to turn X into an “everything app,” combining social media, payments, and AI-driven insights into a single platform. The acquisition could also provide Musk with a unique edge in the growing AI race, giving him access to a proprietary data pipeline that no competitor can replicate.
Despite the potential benefits, Musk’s acquisition comes with a shadow of controversy. His leadership of X and his connections to political figures have fueled speculation about the broader motivations behind the deal, though there’s no concrete evidence suggesting political influence is at play. Moreover, Musk is currently facing a lawsuit over his Twitter acquisition, which was recently rejected for dismissal by a U.S. judge—the same day the X deal was announced.
As the dust settles, one thing is certain: Musk’s latest move has set the stage for a seismic shift in how AI and social media will interact in the future. Whether this deal proves to be a visionary leap or a risky gamble remains to be seen, but for now, all eyes are on Musk and his ambitious new venture.
By: DNU staff