Elon Musk has announced that his artificial intelligence (AI) company, xAI, has acquired his social media platform, X, in an all-stock transaction.

“xAI and X’s futures are intertwined,” he said. “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,” Musk added.

According to Musk, the deal values xAI at $80 billion and X at $33 billion, accounting for X’s $12 billion in debt, resulting in a combined enterprise value of $45 billion for X before debt adjustment.

Musk originally purchased X (then Twitter) for $44 billion in October 2022. This acquisition marks a significant shift, integrating X’s vast user data and reach with xAI’s advanced AI capabilities.

Rapid growth of xAI

The move follows xAI’s rapid growth since its founding in 2023. A $6 billion funding round in December 2024 boosted the company’s growth. Musk’s strategy seems to be leveraging X’s real-time data to accelerate AI innovation.

However, the move comes after X’s valuation had dropped significantly post-2022 due to advertiser exodus and operational changes. On the other hand, there have been recent rebounds tied to Musk’s political influence under the Trump administration. Critics suggest the acquisition might offset X’s financial struggles, while privacy concerns loom over the use of X user data for AI training.

Financial news media including The Wall Street Journal (unpaywalled copy) have covered this.

The Wall Street Journal reports that, earlier this month, X raised roughly $900 million from new and existing investors at a valuation just above its $44 billion takeover price in 2022, according to a person familiar with the fundraise. That valuation effectively set a new benchmark for what X is worth.

The Wall Street Journal also reports that Morgan Stanley advised on the deal, along with lawyers at Sullivan & Cromwell, according to people familiar with the matter.

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