Washington: Elon Musk has announced that his artificial intelligence company, xAI, has acquired X, the social media platform formerly known as Twitter, for $45 billion. The deal, which includes $12 billion in debt, slightly surpasses the $44 billion Musk originally paid for the platform in 2022.
In a statement on X, Musk emphasized the strategic alignment between the two companies, stating, “xAI and X are deeply connected, and this merger will allow us to combine our strengths in data, AI models, computing power, and distribution.” The billionaire estimated that the integration of the two firms raises the combined entity’s valuation to $80 billion.
Though Musk has not disclosed any immediate operational changes to X, xAI’s AI chatbot, Grok, is already embedded within the platform. Musk indicated that further integration would enhance user experiences through more intelligent and dynamic interactions.
The transition follows a tumultuous period for X, which has undergone drastic changes under Musk’s leadership. His overhaul included mass layoffs, modifications to the verification system, and the reinstatement of previously banned extremist accounts, moves that led to an exodus of major advertisers. However, recent months have seen a partial recovery, with brands such as Amazon and Apple reportedly resuming ad spending on the platform.
X’s fluctuating valuation has been a focal point for analysts. Investment firm Fidelity had previously estimated that X’s value had plummeted by nearly 80% from its purchase price, but the company has since rebounded. A February report from Bloomberg suggested that X was seeking new funding at a $44 billion valuation, though it remains unclear why xAI ultimately assessed the platform at a slightly lower figure.
Musk’s increasing involvement in the U.S. government under President Donald Trump has also influenced X’s trajectory. As a key figure in the Trump administration’s Department of Government Efficiency, Musk’s influence has expanded, drawing attention to his ability to juggle multiple ventures, including Tesla and his AI-focused ambitions.
His efforts to establish dominance in the AI sector have been evident, including his attempt earlier this year to acquire OpenAI, the creator of ChatGPT, for nearly $100 billion. The integration of X and xAI could provide him with a streamlined approach to deploying AI technologies to a vast audience.
Political factors have also played a role in X’s resurgence. Under Musk’s leadership, the platform has become a major outlet for Trump and his administration. Musk has used X to amplify pro-Trump messaging, spread conservative viewpoints, and engage with his 200 million followers on controversial topics.
With Trump back in the White House and Musk holding an influential government position, X has reestablished itself as a key platform for political discourse. Investors betting on X may not necessarily be focused on its business fundamentals but rather on Musk’s leadership and growing political clout.
