Billionaire entrepreneur Elon Musk has said on Friday that his artificial intelligence startup xAI has merged with X, the social network formerly known as Twitter which he acquired in 2022, into a single entity with xAI as the acquirer.
“xAI and X’s futures are intertwined,” Musk said. “Today, we officially take the step to combine the data, models, compute, distribution and talent.” He also added that the merger would “unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
The tech billionaire also noted that the deal values the artificial intelligence company xAI at $80 billion, and the social media platform X at $33 billion — $12 billion in debt removed from a total enterprise value of $45 billion. Musk previously acquired Twitter at around $44 billion and renamed it X.
READ: xAI acquires GenAI video startup Hotshot (March 19, 2025)
Since both companies are privately held and controlled by Musk, this transaction likely amounts to a stock swap. with X investors getting paid out in xAI shares. The companies have a number of mutual investors, including venture firms Andreessen Horowitz and Sequoia Capital, as well as Fidelity Management, Vy Capital and Saudi Arabia’s Kingdom Holding Co.
An investor in xAI, and now in the combined entity, told Reuters they were not surprised by the deal, viewing it as Musk consolidating his leadership and management at his own companies. The investor declined to be named.
@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).
Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at…
— Elon Musk (@elonmusk) March 28, 2025
xAI was launched less than two years ago, and recently raised $10 billion in a funding round that valued the company at $75 billion, according to a media report. The startup was founded, according to Musk, with “a stated goal to understand the true nature of the universe.”
xAI was not Musk’s first foray into AI; he had co-founded OpenAI in 2015. However, he eventually left the company, and had been engaged in a public relations and legal spat with the non-profit AI research firm and its CEO Sam Altman over the direction that the firm has taken.
READ: Musk’s xAI unveils Grok 3, what’s new? (February 18, 2025)
xAI has been developing large language models and AI software products, including the generative AI chatbot Grok, which is a direct competitor to OpenAI’s ChatGPT and Google’s Gemini.
Musk, who is one of the richest men in the world, also runs Tesla and SpaceX. He is also at present, closely associated with the Trump administration and heads the Department of Government Efficiency (DOGE), which was responsible for numerous controversial moves like job cuts, and the elimination of funding and regulations. It has also been noted that this puts Musk in a conflict-of-interest position to pursue changes that benefit his various businesses.