Elon Musk Sells X to AI Company xAI in $45 Billion Deal
Elon Musk has announced that X, the social media platform formerly known as Twitter, has been sold to his artificial intelligence company, xAI, for $45 billion. The transaction, revealed in a post on X on Friday evening, marks a significant shift in Musk’s strategy as he continues to integrate AI technology with his digital empire.
The deal includes $12 billion in debt, and according to Musk, it values X at $33 billion, slightly above its estimated worth in late 2023 but still lower than the $44 billion he originally paid for the platform in 2022.
AI and Social Media Integration
Musk emphasized that the sale aligns with his vision to merge xAI’s advanced artificial intelligence capabilities with X’s vast user base and data resources.
“xAI and X’s futures are intertwined,” Musk wrote. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
While Musk has not outlined any immediate structural changes to X, xAI’s Grok chatbot is already integrated into the platform, and he hinted at further AI-driven innovations aimed at creating “smarter, more meaningful experiences” for users. He also claimed that the combined value of xAI and X now stands at $80 billion.
X’s Rocky Financial Road
Musk’s ownership of X has been tumultuous. After acquiring the platform, he implemented sweeping changes, including mass layoffs, overhauls to its verification system, and the reinstatement of controversial accounts—moves that led many major advertisers to pull back from the platform.
As a result, X’s valuation plummeted, with investment firm Fidelity estimating in late 2023 that the company had lost nearly 80% of its original value. However, recent signs of recovery have emerged, with advertisers such as Amazon and Apple reportedly reinvesting in the platform, contributing to X’s financial stabilization.
In February, Bloomberg reported that X was in talks to raise additional funding at a valuation of $44 billion, though it remains unclear what became of those discussions or why xAI valued X slightly lower in this acquisition.
Musk’s Expanding AI Ambitions
The sale of X comes as Musk continues to position himself as a major player in artificial intelligence, a sector that has become a key focus of both the tech industry and the U.S. government.
Earlier this year, he led a group of investors in an attempt to buy OpenAI, the company behind ChatGPT, for nearly $100 billion, escalating his ongoing rivalry with OpenAI’s CEO, Sam Altman.
The tighter integration of X and xAI could provide Musk with a significant advantage in AI development, allowing xAI to roll out its latest AI models and features directly to X’s vast user base.
The Political Factor
Musk’s growing influence extends beyond the business world. His role in the Trump administration’s Department of Government Efficiency has raised questions about his ability to balance his responsibilities across Tesla, X, xAI, and SpaceX.
Under Musk’s leadership, X has become a central hub for pro-Trump content and discussions, with some analysts suggesting that investors are betting more on Musk’s political ties than on the platform’s financial prospects.
With Trump back in office and Musk’s government role expanding, X has regained relevance as a key platform for political discourse, further intertwining Musk’s business ventures with his political influence.
As the integration between X and xAI progresses, the impact of this acquisition on AI development, digital communications, and political discourse will be closely watched.
