In a Twitter public post on Friday Elon Musk revealed that his AI startup xAI obtained social media company X through an exchange of company stock. Musk revealed through X that the acquisition established xAI at $80 billion value while X lagged behind at $33 billion through the removal of $12 billion debt from its historic $45 billion assessment.
@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).
— Elon Musk (@elonmusk) March 28, 2025
Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at…
The president of both organizations stated that their business paths would develop together. The organizations are now uniting their data along with their models and computing capabilities as well as their distribution platforms and workforce as he described in the official announcement.
The social media platform Twitter transformed into X when Musk purchased it through a $44 billion acquisition in October 2022. The X platform has become more treasured by investors since the initial Fidelity prediction of a $10 billion value as Musk acknowledges current user count above 600 million. The integration of X into Musk’s expanding business domain became stronger after X served as the base for xAI products that included the AI chatbot Grok.
Both companies’ executives have reported that the merger will require exchanging shares to establish the new holding company named xAI Holdings Corp while asserting the new structure promotes easier fund generation for the combined organization.
Since its foundation in 2023 xAI experienced rapid expansion by recruiting high-level DeepMind Google and Microsoft and OpenAI employees and building extensive data center facilities to compete as an AI developer leader. The startup conducted a major funding round in December 2023 that led to a valuation of $45 billion before Musk adjusted the market capitalization to $80 billion.
xAI has significantly improved recently, particularly in February, with the launch of Grok 3, an AI system that is now in fierce competition with the best in the industry in math, science, and programming. Regardless of these milestones, he is still very much in conflict with OpenAI, the startup he co-founded with Sam Altman. He is always at odds with OpenAI over its movement towards becoming a profit making company, claiming that it is important for the company’s future funding. Earlier this year, he even made a bid to takeover OpenAI for $97 billion but like all his previous attempts, this one was also turned down by the company’s board.
Gaining access to user content on X provides a tremendous opportunity for xAI to train its AI, which makes this merger strategically beneficial for the company. In addition, xAI having ownership of X gives the company a large audience which further increases Musk’s scope of intentions in AI.
Musk has always blurred the lines between his interests and businesses so this means the connection xAI and X has is even stronger now. The acquisition shows that X might serve as a piece to further Musk’s grand scheme for AI, rather than being a social media platform.
