Elon Musk’s artificial intelligence firm xAI has acquired his social media platform X in an all-stock transaction that values the company at $33 billion, including $12 billion worth of debt, the centibillionaire announced Friday. The sale comes just weeks after Musk reportedly raised an additional roughly $1 billion in debt financing for X that valued the company at $44 billion—the same price Musk paid for it three years ago.
“xAI and X’s futures are intertwined,” Musk wrote in an X post. “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.”
Both Linda Yaccarino, the CEO of X, and Igor Babuschkin, the cofounder of xAI, immediately posted similar messages on X signaling their support of the acquisition. “The future could not be brighter,” Yaccarino wrote. Musk only reposted Babuschkin’s.
It is not known whether Yaccarino will stay in the same role or what the acquisition will mean for X’s employees. Musk, Yaccarino, and Robert Keele, the head of xAI’s legal team, did not respond to a request for comment prior to publication.
Musk bought Twitter in 2022 and later renamed it X in a deal that involved taking out billions of dollars in loans from a group of Wall Street banks and other lenders. After Musk took over and X’s advertising business slumped, the banks reportedly struggled to unload the loans to interested buyers. Lenders typically try to resell debt to other investors quickly to get it off their balance sheets and profit from associated fees. The Wall Street Journal dubbed the fiasco “the worst buyout for banks since the financial crisis.”
But X’s financial situation turned around after Donald Trump was reelected and Musk was appointed to run the administration’s so-called Department of Government Efficiency. More investors became interested in the debt as advertisers began returning and Musk’s ties to the White House and Trump deepened.
Musk also said he gave X investors a 25 percent stake in xAI last year, which helped boost the value of the social media platform and provide more security to lenders, according to reporting from the Financial Times.
While xAI previously appeared to be mostly playing catch-up with rivals like OpenAI and Google, Musk gave the startup a boost by creating a massive cluster of 100,000 GPUs, enough computing resources to compete with the biggest industry players. The supercomputer, dubbed Colossus, is located in Memphis, Tennessee.
At the outset, xAI’s stated mission was to understand the nature of the universe. Today, it is best known for creating an “unfiltered” chatbot called Grok, which has been integrated as part of the X platform since late 2023.
