🚀 xAI Acquires X: Elon Musk Consolidates Tech Ventures in All-Stock Deal

NewBits Media
Apr 7
2 min read

Updated: Apr 10

In a significant move within Elon Musk's portfolio of companies, his artificial intelligence firm xAI has acquired X (formerly known as Twitter) in an all-stock transaction. This merger brings together Musk’s AI and social media platforms, with the stated goal of integrating advanced AI capabilities with X’s user base.

📊 Key Financial Details

xAI valuation: $80 billion
X valuation in the merger: $33 billion
Musk’s purchase price for Twitter (2022): $44 billion
Fidelity’s October 2024 valuation of X: ~$9.4 billion

The valuation of X in this deal—$33 billion—represents a substantial increase from Fidelity's recent estimate of $9.4 billion. However, this comes amid challenges such as user attrition and significant debt levels.

🤖 Grok and the AI-Social Media Integration

Grok, xAI’s flagship chatbot and competitor to tools like ChatGPT, plays a central role in this merger. The chatbot has been described as “maximally truth-seeking” and has demonstrated the ability to challenge misinformation, even when it comes from Musk himself. Grok is trained using data from X users, with data integration enabled by default unless manually disabled.

The merger positions Grok as a key component of the combined platform, leveraging X’s user base—claimed to be 600 million active users—to expand its reach.

🔄 What the xAI Acquires X Deal Means for AI and Social Media

The acquisition aims to:

Provide xAI with access to X’s extensive user base.
Reframe X’s $12 billion debt within a broader AI-driven narrative.
Enhance investor appeal by combining AI technology with social media at scale.

Elon Musk commented on the merger, stating:

“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

🥊 Competitive Landscape

X faces growing competition from other platforms, including:

Threads (Meta): Over 320 million monthly users.
Bluesky: 27.4 million users, many of whom are former X users.

While X remains a leader in terms of raw user numbers, rivals have gained traction since

Musk's acquisition and rebranding of the platform.

🔮 Strategic Vision

This merger reflects Musk’s broader vision to position xAI as a leader in technology innovation. By integrating AI with social media, Musk aims to create a platform that not only connects users but also drives technological progress.

In Musk's words:

“This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”

Whether this vision will resonate with users and investors remains to be seen.

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