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Elon Musk’s artificial intelligence group xAI has purchased social media platform X for $45bn, as the billionaire entrepreneur brings together two of his flagship businesses.
“xAI and X’s futures are intertwined,” Musk said on Friday evening, adding that he would be combining the data, models, computing power, distribution and talent of the two companies.
Musk said the all-stock deal valued xAI at $80bn. He did not disclose specifics on how the deal was structured. xAI obtained a valuation of $45bn in a $5bn private funding round late last year.
The deal announced on Friday, which includes $12bn in debt, values X slightly above the $44bn price that Musk paid to take the company private in October 2022 and comes after a $1bn fundraising round this month.
It highlights the rebound in fortunes for X, which slumped following Musk’s takeover as advertisers pulled their spending from the platform citing concerns over his hands-off approach to moderation.
A group of seven Wall Street banks have also sold almost all the $12.5bn of loans Musk used to finance his takeover of Twitter, which he later renamed X, in 2022.
The lenders had been saddled with the debt while Musk sought to turn around X’s operations as equity investors repriced their stakes in the platform at dramatic discounts.
Investor interest in the loans improved in the weeks following Donald Trump’s election victory in November, given the billionaire’s proximity to the new administration as a confidant of the president and the head of the so-called Department of Government Efficiency intent on cutting government red tape.
Investors in X include Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital and Fidelity Investments. Sequoia, Andreessen Horowitz and Fidelity are also investors in xAI.
Last year, Musk granted investors that backed his Twitter acquisition 25 per cent of the shares in xAI, helping to boost the value of the social media platform. It was unclear how this set-up will be factored in to Friday’s deal.
A person familiar with the deal said it was forged in part to help Musk establish a value for his privately held businesses. They added that Musk’s main outside investors had supported the transaction, which had been in the works for months, and expected it would provide greater clarity on how the two groups operate in tandem.
Musk launched his start-up xAI in 2023 to “understand the true nature of the universe” and challenge the dominance of Sam Altman’s OpenAI. Since then, it has launched its own chatbot, Grok, and been increasing its data centre expansion with its Colossus supercomputer cluster.
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk said on Friday of the X tie-up. “This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
Already, data from X, which Musk said has more than 600mn active users, has been used to train Grok. In turn, more sophisticated Grok features are offered to paying premium subscribers of X.
Additional reporting by James Fontanella-Khan in New York
