Elon Musk on Friday evening announced he has sold his social media company, X, to xAI, his artificial intelligence company. xAI will pay $45 billion for X, slightly more than Musk paid for it in 2022, but the new deal includes $12 billion of debt.
Musk wrote on his X account that the deal gives X a valuation of $33 billion.
“xAI and X’s futures are intertwined,” Musk said in a post on X. “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 didn’t announce any immediate changes to X, although xAI’s Grok chatbot is already integrated into the social media platform. Musk said that the combined platform will “deliver smarter, more meaningful experiences.” He said the value of the combined company was $80 billion.
Musk has made a slew of changes to the platform once known as Twitter since he purchased it in 2022, prompting some major advertisers to flee. He laid off 80% of the company’s staff, upended the platform’s verification system and reinstated suspended accounts of White supremacists within months of the acquisition.
While X’s valuation is lower than what Musk paid for the social outlet, it’s still a reversal of fortunes for the company. Investment firm Fidelity estimated in October that X was worth nearly 80% less than when Musk bought it. By December, X had recovered somewhat but was still worth only around 30% of what Musk paid, according to Fidelity, whose Blue Chip fund holds a stake in X.
The news also comes as Musk has been in the spotlight for his role at the Department of Government Efficiency in the Trump administration, which has raised questions about how much attention he’s paying to his companies, particularly Tesla. Combining X and xAI could allow Musk to streamline his efforts.
Musk has also been working to establish himself as a leader in the AI space, a big focus for both the Trump administration and the tech industry. Earlier this year, he led a group of investors attempting to purchase ChatGPT maker OpenAI for nearly $100 billion, another escalation in the longtime rivalry between Musk and OpenAI CEO Sam Altman.
It’s unclear precisely how the acquisition will benefit Musk’s AI ambitions. But the tighter integration with X could allow xAI to push its latest AI models and features to a broad audience more quickly.
Big advertisers, who had largely abandoned X after hate speech surged on the platform and ads were seen running alongside pro-Nazi content, have begun to return. (X made several pro-Nazi accounts ineligible for ads following advertiser departures.) Amazon and Apple are both reportedly reinvesting in X campaigns again, a remarkable endorsement from two brands with mass appeal.
