Elon Musk has further deepened his control over the intersection of artificial intelligence and social media by merging two of his most ambitious ventures. On Friday, the billionaire entrepreneur announced that xAI, his AI startup, has acquired X (formerly Twitter) in an all-stock deal.
“xAI has acquired X in an all-stock transaction,” Musk wrote in a post on X. “The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).”
Musk emphasized that the futures of xAI and X are now permanently intertwined, stating, “Today, we officially take the step to combine the data, models, compute, distribution, and talent.”
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The acquisition represents the next phase of Musk’s vision for an AI-powered everything app, leveraging X’s massive user base and vast data reserves to fuel xAI’s development.
Musk originally purchased X for $44 billion in October 2022, but the platform’s value has fluctuated dramatically in the wake of his sweeping changes. At its lowest point, Fidelity estimated that X was worth less than $10 billion, reflecting major losses in advertising revenue and investor skepticism over Musk’s radical restructuring, including his shift toward paid subscriptions.
However, recent months have seen X’s valuation rebound to $33 billion, a shift Musk has credited to its growing influence in the political and social discourse. Since the inauguration of President Donald Trump, for whom Musk campaigned aggressively, investors have viewed X as an increasingly powerful media force. The platform remains the go-to space for real-time updates and political debate, making it a crucial tool in shaping public opinion.
Meanwhile, xAI has surged in value, quickly becoming a dominant force in the artificial intelligence space. Founded in 2023 as Musk’s direct competitor to OpenAI, the company has been rapidly scaling. In February, xAI was reportedly in talks to secure $10 billion in funding at a $75 billion valuation. Now, following the X acquisition, Musk pegs its worth at $80 billion.
One of the most significant shifts accompanying this acquisition is Musk’s decision to make xAI’s chatbot, Grok, free for all X users in a bold bid to expand its reach. Previously, access to Grok was restricted to premium subscribers on X, but Musk has now removed that paywall, betting that mass adoption will increase engagement and further integrate AI into everyday conversations.
The chatbot, which is embedded directly into X, has already become a key part of the platform’s experience. Users frequently interact with Grok using the #AskGrok feature, treating it as a search engine, an advisor, and even an entertainment source. Whether asking for historical facts, investment advice, or humorous takes on trending topics, X users are increasingly relying on the chatbot to generate answers instantly.
Beyond answering text-based queries, Grok has expanded into new capabilities, including image editing, giving users tools to modify and enhance pictures within the X app. This move puts it in competition with advanced AI image-generation models, further strengthening xAI’s foothold in the market.
Musk has also celebrated Grok’s growing dominance in the AI space. On Thursday, he acknowledged that Grok now tops the Android charts, surpassing rival chatbots. “Grok is #1 on Android,” Musk posted on X. Grok’s biggest competitor, ChatGPT, is ranked third.
The Data Advantage: Why Musk Needed X for xAI’s Future
The acquisition of X provides a crucial advantage to xAI in the ongoing AI arms race. Unlike other AI companies that struggle with acquiring large-scale training data, Musk now controls a platform with years of real-time, user-generated content.
Social media conversations provide an unparalleled dataset for training AI models, allowing Grok to stay updated on real-world events faster than its competitors. Musk had already begun leveraging this advantage by granting Grok access to real-time posts on X, allowing it to generate more current and context-aware responses compared to AI models like OpenAI’s ChatGPT, which relies on periodic updates rather than continuous information streams.
With the full merger now in place, experts predict that Grok’s integration with X will become even deeper, with features such as AI-powered content recommendations, real-time sentiment analysis, and automated post generation potentially being added.
The acquisition signals a fundamental transformation for X, which Musk has long envisioned as an all-in-one platform capable of handling payments, video streaming, and advanced social networking. Now, with AI deeply embedded into its infrastructure, X is poised to become a key testing ground for next-generation AI models.
The deal also solidifies Musk’s ambition of challenging OpenAI, Google DeepMind, and Anthropic in the battle for AI supremacy. With a massive user base, real-time training data, and free access to AI-powered tools, xAI is positioning itself as a formidable competitor in the artificial intelligence market.
Elon Musk said his xAI artificial intelligence startup will acquire the X social media platform, formerly known as Twitter, for $33 billion in an all-stock deal. “The combination values xAI at $80 billion and X at $33 billion,” Musk said in a social media post on the platform on Friday. With $12 billion of debt factored in, the X value is $45 billion, he said, adding that the tie-up combines ”xAI’s advanced AI capability with X’s massive reach.” Musk bought Twitter for $44 billion including debt in 2022.