Elon Musk has introduced an $80 billion merger of his synthetic intelligence enterprise xAI with social media platform X, previously Twitter, in a transfer he claims will “unlock immense potential” by combining AI capabilities with real-time person interplay.
The non-cash transaction values xAI at $80 billion and X at $33 billion — or $45 billion when together with $12 billion in debt. That determine marks a slight improve over the $44 billion Musk paid to take the platform non-public in 2022, elevating contemporary questions concerning the valuation of X amid ongoing monetary challenges.
Musk stated the merger would permit the 2 companies to raised share assets, with X gaining deeper entry to AI instruments reminiscent of chatbot Grok, whereas xAI will be capable to faucet into X’s 600 million-strong person base and huge information pool. He described the entities as “intertwined”, stating that the mixed firm would provide “smarter, more meaningful experiences to billions of people” whereas remaining dedicated to “seeking truth and advancing knowledge”.
The merger comes simply months after xAI was reported to be in talks to lift $10 billion at a $75 billion valuation. The corporate, which Musk based in 2023, has already launched a number of merchandise together with the Grok chatbot and Aurora, a text-to-image mannequin. Early backers embody Silicon Valley heavyweights Sequoia Capital and Andreessen Horowitz.
Critics, nonetheless, are questioning the rationale behind the deal — significantly given xAI’s lack of a transparent income stream. Bruce Daisley, former European head of Twitter, referred to as it “a real signal that the AI market is a bubble,” suggesting that Musk could also be trying to shore up X’s valuation amid falling advert revenues and stress from early traders.
One such investor, Saudi Arabian billionaire Prince Alwaleed bin Talal, confirmed he had requested the merger, citing his position because the second largest investor in each corporations. He stated the worth of his holdings post-merger would exceed $4–5 billion, including that “the meter is running”.
Since Musk’s acquisition of Twitter and its rebrand to X, the platform has seen a dramatic overhaul. Musk minimize 1000’s of jobs, closed places of work, and repositioned the platform as a free speech haven. Though many high-profile advertisers initially pulled out, a latest Emarketer report urged that X could now be poised for its first yr of advert income progress underneath Musk’s possession.
Regardless of the blended outcomes, Musk insists the transformation is working. “X is the digital town square… transformed into one of the most efficient companies in the world,” he stated. “xAI has rapidly become one of the leading AI labs, building models and data centres at unprecedented speed and scale.”
X CEO Linda Yaccarino echoed Musk’s optimism, saying: “The future could not be brighter.”
The deal was suggested by Morgan Stanley, which served as monetary adviser to each X and xAI.
With Musk additionally heading Tesla, SpaceX, and now serving as Donald Trump’s appointee to the Division of Authorities Effectivity (Doge), the tech mogul’s newest transfer cements his ambition to create a tightly built-in ecosystem spanning transportation, AI, aerospace, and digital communication.
