Elon Musk Sells X to His New AI Venture, xAI

Musk stated that this step will “unleash significant potential by merging xAI’s sophisticated AI capabilities and knowledge with X’s extensive reach.”

Elon Musk’s tech venture, xAI, has purchased his social networking platform X, previously recognized as Twitter, for a price tag of $33 billion (€30.5 billion).

Musk revealed the deal in a tweet stating: “This merger assesses xAI at $80 billion and X at $33 billion ($45B minus $12B debt).”

What were Musk’s comments regarding the deal?

xAI’s future and X’s destiny are closely linked,” he stated. “As of today, we formally proceed with integrating our data, models, computational resources, distribution channels, and talents. This integration will unleash significant potential through merging xAI’s sophisticated AI capabilities and knowledge with X’s extensive outreach.

Many details of the agreement remain vague. Since both businesses are private entities, they have no obligation to make financial information available to the general public.

It remains uncertain whether this shift will make a difference for X users.

In 2022, Musk acquired X, formerly known as Twitter, for $44 billion.

After acquiring the company, he dismissed most of its workforce and altered its guidelines for content management and user authentication, renaming it as X. These contentious policy changes led to an exodus of advertisers and resulted in a swift drop in earnings.

Intensifying AI competition

Musk initiated xAI within a year.

In February, xAI introduced Grok-3, the latest iteration of its chatbot, as it tries to compete with
Chinese AI firm DeepSeek
along with OpenAI, backed by Microsoft, the creator of ChatGPT.

With the growing rivalry in the AI sector
,X AI has also increased its data center capacity to train more sophisticated models.

In February, Musk led a consortium in an effort to acquire OpenAI for approximately $97.4 billion.

However, the proposal was declined.

Musk, the globe’s richest individual and the leader of both Tesla and SpaceX, has gained significant influence in Washington D.C. ever since Donald Trump reclaimed the presidency.

As the leader of what’s called the Department of Government Efficiency, or DOGE, he is managing the administration’s initiatives aimed at reducing costs.

Edited by: John Silk

Author: Srinivas Mazumdaru (with Reuters, AP, dpa)