Elon Musk announced on Friday, March 28, 2025, that his artificial intelligence company, xAI, has acquired X, the social media platform formerly known as Twitter, in an all-stock deal valued at $33 billion. The transaction, as reported by CNBC, values xAI at $80 billion, marking a significant shift in Musk's business landscape.
Musk tweeted about the acquisition, stating, "xAI has acquired X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt)." This deal comes just over two years after Musk purchased Twitter for approximately $44 billion, subsequently renaming it X and founding xAI five months later.
The acquisition is part of Musk's broader strategy to integrate his various ventures, as both companies share overlapping interests and goals. Musk emphasized the synergy between xAI and X in his tweet, declaring that their futures are intertwined. He noted, "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."
Despite Musk's optimistic outlook, the reality of X's current situation paints a more complex picture. Since Musk's takeover, the platform has faced a significant decline in traffic, particularly following the 2024 presidential election. Reports indicate that the platform's user engagement has suffered, contributing to a drop in advertising revenue and overall valuation.
Musk's management of X has also been controversial. After reinstating several banned accounts, including those of far-right figures, the platform has been criticized for becoming a haven for extremist content. Critics argue that these changes have alienated many users and advertisers, leading to a decline in trust and engagement.
In his announcement, Musk referred to X as a "real-time source of ground truth" for its 600 million active users globally. However, the platform's reputation has been tarnished by its association with misinformation and extremist ideologies. Musk's assertion that the combined entity will deliver "smarter, more meaningful experiences to billions of people" remains to be seen.
The financial implications of the acquisition are noteworthy. Musk had previously stated that investors in X Corp. would own 25% of xAI. The investor base for X included prominent figures such as Oracle founder Larry Ellison, Twitter co-founder Jack Dorsey, and various investment firms. Meanwhile, xAI's investors include notable names like BlackRock and the Qatar Investment Authority, suggesting a robust financial backing for Musk's AI ambitions.
Analysts have expressed mixed feelings about the merger. Some view it as a strategic move that consolidates Musk's power across his companies, while others are skeptical about the valuation of xAI, especially in a competitive landscape where rivals like OpenAI are making significant strides. Musk's xAI startup recently raised $10 billion, valuing the company at $75 billion, and has been working to develop its AI capabilities, including the chatbot Grok.
As the merger unfolds, questions remain about how the integration will impact X's leadership and operational structure. Regulatory scrutiny may also play a role in determining the future of this combined entity, given Musk's controversial reputation and the potential for conflicts of interest.
In a broader context, this acquisition reflects Musk's ongoing influence in the tech industry and his ability to navigate complex business landscapes. His role as the head of President Trump's Department of Government Efficiency has further solidified his position in Washington, D.C., allowing him to leverage political connections to benefit his business interests.
Despite the challenges ahead, Musk remains optimistic about the potential of the combined companies. He concluded his announcement with a message of gratitude for the dedication of the staff at both xAI and X, stating, "I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning. Thank you for your continued partnership and support."
As the tech world watches closely, the implications of this acquisition will likely reverberate throughout the industry, influencing everything from AI development to social media dynamics. With Musk at the helm, the future of xAI and X promises to be as unpredictable as the billionaire himself.
