In a groundbreaking development, Elon Musk has announced that his AI company, xAI, has officially acquired the social media platform X, formerly known as Twitter, in a massive $45 billion deal. This move, revealed on March 28, places xAI’s value at a whopping $80 billion, while X is valued at $33 billion after accounting for its $12 billion debt.
Musk shared his vision in a social media post, stating, “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution, and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
With 600 million active users, X offers a vast data pool that has been crucial in training Grok, xAI’s AI model. If you’re a premium subscriber to X, you’ll get to enjoy some of Grok’s advanced features.
This announcement comes on the heels of reports that X was looking to raise funds at a $44 billion valuation, matching the price Musk paid when he first bought the company in 2022. According to an investor who spoke to the Financial Times, hitting that valuation again has been more than just a financial target for Musk—it’s been a symbolic achievement.
Following Musk’s acquisition, changes in moderation policies led to a significant drop in advertising revenue as many advertisers pulled out. However, many have since returned, including giants like Amazon, as Musk has been rebuilding relationships, even with the White House.
Financial analysts are noticing a positive shift in X’s economic outlook. Last year, the company reported $1.2 billion in adjusted earnings before interest, taxes, depreciation, and amortization, which is quite similar to its financial state before Musk took over.
Meanwhile, xAI has teamed up with Nvidia in the $30 billion AI Infrastructure Fund. This initiative, backed by BlackRock, Microsoft, and the Abu Dhabi AI investment group MGX, aims to gather $100 billion to push AI technology forward.
Jensen Huang, Nvidia’s CEO, highlighted the importance of this effort, saying, “The global buildout of AI infrastructure will benefit every company and country that wants to achieve economic growth and unlock solutions to the world’s greatest challenges. AI factories built on Nvidia full-stack AI infrastructure will convert data into intelligence that will accelerate every industry and help society achieve unimaginable breakthroughs.”
This strategic merger of xAI and X under Musk’s leadership marks a significant step forward in the integration of AI and social media. It’s a fascinating time for both industries, and we’re likely to see some exciting developments as a result of this bold move.
