Elon Musk has announced that his artificial intelligence company, xAI, is buying the social media platform X (formerly Twitter) in a deal worth $33 billion. Musk believes that merging the two companies will create huge opportunities by combining xAI’s advanced technology with X’s large user base.
X currently has over 600 million users, and Musk says its future is closely linked to xAI, which he launched two years ago. “By bringing together data, computing power, and talent, we can create a platform that not only reflects the world but also speeds up human progress,” Musk said.
The deal is an all-stock transaction, valuing xAI at $80 billion and X at $33 billion, including X’s $12 billion debt. Musk originally bought Twitter for $44 billion in 2022 before renaming it X. He then launched xAI the following year, investing billions in powerful Nvidia chips for AI development.
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In February, xAI released its latest AI chatbot, Grok 3, which Musk claims is “scary smart” and much more powerful than previous versions. Grok 3 competes with OpenAI’s ChatGPT, which was co-founded by Musk and Sam Altman in 2015. However, Musk left OpenAI in 2018, and their relationship has since turned into a rivalry.
Musk, who is the world’s richest person, is a supporter of former U.S. President Donald Trump. Analysts predict that advertising revenue on X will increase this year because brands may fear backlash from Musk if they stop advertising on the platform.
According to Jasmine Enberg, a principal analyst at Emarketer, “Many advertisers might see spending on X as a necessary business move to avoid potential legal or financial risks.”
