Elon Musk’s AI company, xAI, has acquired the social media platform X in an all-stock deal worth $33 billion. The transaction, which includes $12 billion in debt, aims to merge AI research with social media data. This move allows Musk to combine both companies’ resources, making AI model training more efficient.
Musk announced the acquisition on X, stating that the merger integrates data, computing power, and talent. With this deal, xAI’s valuation has risen to $80 billion, positioning it as a stronger competitor against OpenAI and China’s DeepSeek.
Boosting Grok and AI Advancements
The acquisition will help xAI improve its chatbot, Grok. By using real-time content from X, the AI models can evolve more quickly. Since its launch less than two years ago, xAI has expanded rapidly. It recently raised $10 billion in funding and introduced Grok-3 in February.
Musk is also building a supercomputer called Colossus in Memphis, Tennessee. This facility, one of the largest of its kind, will accelerate AI research. The integration of X with xAI’s AI models will further enhance data-driven advancements.
Investor Reactions and Market Impact
The deal has sparked varied responses from investors. Saudi investor Prince Alwaleed bin Talal, a major shareholder in X and xAI, supported the move. He expects his investments to increase in value to around $4-$5 billion.
Analysts also noted the significance of the $45 billion valuation, including debt. D.A. Davidson analyst Gil Luria pointed out that the amount is $1 billion higher than Musk’s 2022 purchase of Twitter. Investors who bought X’s debt are now seeing its value grow due to rising interest in AI ventures.
Regulatory Concerns and AI Competition
Despite the financial benefits, the merger could face regulatory scrutiny. It remains unclear how X’s leadership will fit into xAI. Musk, a close ally of U.S. President Donald Trump, has increased his influence in AI and government affairs. This has helped X stabilize its ad revenue, which previously declined after Musk’s takeover.
Musk’s rivalry with OpenAI is also heating up. In February, he led a $97.4 billion bid for OpenAI, but it was rejected. He later filed a lawsuit to prevent OpenAI from transitioning to a for-profit business. However, a judge recently denied his request for an injunction.
What’s Next?
With X now under xAI, Musk plans to deepen AI integration across social media and other business areas. The merger could reshape AI research, social media, and real-time data processing.
As the AI industry evolves, the impact of this deal will be closely watched. Musk’s strategy could make xAI a dominant force in artificial intelligence.
