Elon Musk Sells X to xAI in $45 Billion Deal
Elon Musk announced on Friday evening that he has sold his social media company, X, to his artificial intelligence firm, xAI. The deal, valued at $45 billion, surpasses what Musk originally paid for X in 2022, though it includes $12 billion in debt.
Musk shared on X that the agreement values the platform at $33 billion.
“xAI and X’s futures are intertwined,” he posted. “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.”
While no immediate changes to X were announced, xAI’s Grok chatbot is already integrated into the platform. Musk suggested the merger would enable “smarter, more meaningful experiences” for users, estimating the combined company’s value at $80 billion.
The Evolution of X
Since acquiring the platform in 2022, Musk has implemented significant changes, including mass layoffs, the revamping of X’s verification system, and the reinstatement of banned accounts, which led some major advertisers to withdraw. Despite early struggles, X’s valuation has rebounded in recent months.
Investment firm Fidelity previously estimated X had lost nearly 80% of its value under Musk. However, by December, it had recovered to about 30% of the original purchase price. The recent sale to xAI signals a further resurgence.
AI Ambitions and Political Influence
Musk has been aggressively positioning himself as a leader in artificial intelligence, an industry that remains a focal point for both the tech sector and the Trump administration. Earlier this year, he attempted a $100 billion acquisition of OpenAI, escalating his long-standing rivalry with OpenAI CEO Sam Altman.
Musk’s increasing involvement in the federal government, particularly through the Department of Government Efficiency under President Donald Trump, has also drawn attention. Some observers speculate that consolidating X and xAI may streamline his focus amid his various business ventures.
The Road Ahead
A key factor in X’s recent financial recovery is its growing alignment with xAI. Reports indicate that xAI was seeking a $75 billion valuation in a recent funding round. Additionally, advertisers who had previously left X due to concerns over content moderation are beginning to return, with companies like Amazon and Apple reportedly reinvesting in X campaigns.
Despite the uncertainty surrounding the merger’s impact on Musk’s AI ambitions, tighter integration with X could provide xAI with a powerful distribution channel for its AI models and features. Whether this move solidifies Musk’s dominance in the AI space or presents new challenges remains to be seen.
