In a surprising move, Elon Musk announced that his artificial intelligence company, xAI, had acquired the social media platform X, formerly Twitter, in an all-stock transaction. This deal, which is valued at US$33 billion on paper, includes a significant US$12 billion debt as part of Musk’s previous takeover of Twitter in 2022. The acquisition has been described as a major step towards merging xAI’s powerful AI capabilities witX’s global reach X.
Combining forces for a more powerful future
In a tweet announcing the deal, Musk highlighted the immense potential the combination of xAI and X holds. He explained that this partnership will blend xAI’s cutting-edge artificial intelligence tools with X’s extensive user base, resulting in smarter and more meaningful experiences for millions. Musk envisions that the integration will create a platform that mirrors the world and helps accelerate human progress through advanced AI solutions.
@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).
— Elon Musk (@elonmusk) March 28, 2025
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…
Musk’s vision for X has always been ambitious. Since launching xAI in the summer of 2023, he has strongly linked the two ventures, frequently suggesting that access to the vast data trove generated by X users could provide xAI with a substantial edge. One of the key developments from this partnership has been the introduction of Grok, xAI’s AI tool, which has been integrated into the X platform and has recently expanded to other platforms like Telegram.
X faces challenges while embracing change
While the deal marks an exciting new chapter, it highlights some challenges X has faced since Musk’s 2022 acquisition. Under Musk’s ownership, the company has struggled to transform into the “everything app” he had envisioned. However, X CEO Linda Yaccarino remains optimistic about the future despite these setbacks. Responding to the announcement of the deal, she tweeted, “The future could not be brighter,” reflecting her confidence in the company’s new direction.
.@X + @xAI
— Linda Yaccarino (@lindayaX) March 28, 2025
The future could not be brighter ✨ https://t.co/GoJE99KxxI
X’s valuation, which had dropped significantly since Musk’s initial acquisition, has recently shown signs of recovery. The platform maintains a large user base, with over 600 million active users. Despite this, X has not yet fully achieved the growth and transformation that Musk had anticipated.
A reminder of Musk’s previous business moves
This recent acquisition of X by xAI resembles a 2016 deal Musk made involving Tesla and SolarCity. In that case, Tesla Motors acquired SolarCity, a company where Musk was the largest shareholder, for US$2.6 billion. The move was highly controversial but ultimately led to Tesla’s rebranding, dropping “Motors” from its name. Musk is taking a similar approach with his latest acquisition by closely aligning two major ventures.
As Musk continues to manage multiple projects, including his leadership roles at Tesla and SpaceX, it remains to be seen how this latest deal will impact his involvement in other companies. During an all-hands meeting at Tesla, he recently mentioned that he has “17 jobs,” which raises questions about how much time and attention he will devote to the rapidly growing xAI and X combination.
Despite the complexities surrounding this new venture, Musk remains optimistic about the future. In his tweet, he praised the dedication of the teams at both xAI and X and acknowledged their hard work in bringing the companies together. He added that the merger is just beginning an exciting journey ahead.
