Elon Musk Merges xAI and X in a $33 Billion All-Stock Deal
Billionaire entrepreneur Elon Musk has revealed the merger of his artificial intelligence venture, xAI, with his social media platform, X, through an all-stock transaction valued at $33 billion. This merger elevates the valuation of xAI to an impressive $80 billion, while X is valued at $33 billion, less a $12 billion debt liability.
Both xAI and X remain privately owned entities under Musk’s leadership and share several prominent investors, including venture capital firms Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.
In a post on X, Musk emphasized that the merger will synergize their data, computational resources, distribution networks, and talent pools to forge more sophisticated AI-driven experiences, all while remaining devoted to their foundational mission of advancing truth and knowledge.
“@xAI has acquired @X in an all-stock transaction, combining our assets to value xAI at $80 billion and X at $33 billion ($45 billion less $12 billion in debt),” Musk announced. He highlighted that over the past two years, xAI has emerged as a leader in the field of artificial intelligence, rapidly developing models and data centers on an unprecedented scale.
He further noted that X acts as a digital town square for over 600 million active users seeking up-to-the-minute information, and it has been converted into one of the most efficient companies globally, well-positioned for scalable growth in the future.
Musk believes that the futures of xAI and X are deeply interconnected. “Today, we take a significant step to merge our data, models, computing capabilities, distribution channels, and talent. This integration will unleash tremendous potential by fusing xAI’s advanced AI technologies with the extensive reach of X. The newly formed company will offer smarter, more meaningful experiences to billions, while adhering to our core mission of promoting truth and advancing knowledge. This will enable us to build a platform that not only mirrors reality but actively fosters human progress.”
He acknowledged the commitment of the teams at both xAI and X, stating, “The dedication of everyone at xAI and X has been pivotal in reaching this milestone. This is merely the beginning.”
Founded less than two years ago, xAI seeks to “understand the true nature of the universe” and has been working on developing large language models and AI tools, positioning itself as a formidable competitor to DeepAI, which Musk co-founded in 2015 before stepping down due to strategic disagreements.
In June 2024, xAI unveiled plans for a supercomputer in Memphis, Tennessee, aimed at training its AI chatbot, Grok. By September, Musk announced that part of this supercomputer, named Colossus, had already become operational.
However, xAI’s rapid growth has not been without controversy. Environmental and public health advocates have raised concerns regarding community involvement in its Memphis project. The Colossus supercomputer is powered by natural gas-burning turbines, and xAI also plans to enhance operations with a nearby graywater facility.
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