Elon Musk's xAI Acquires Social Media Platform X in All-Stock Deal

Elon Musk's xAI Acquires X in Landmark All-Stock Deal

Elon Musk, the influential tech magnate, has announced that his artificial intelligence startup, xAI, has officially acquired his social media platform X (formerly Twitter) in an all-stock transaction. This significant move, revealed in a post on X on Friday, March 29, 2025, merges two of Musk's most prominent ventures, aiming to leverage the vast data and user base of X to accelerate xAI's ambitious AI development goals.

Deal Valuation and Structure

The combination values xAI at an impressive $80 billion, while X is valued at $33 billion. This valuation for X reflects a decrease from its enterprise value of $45 billion, largely due to the company's $12 billion in debt. Musk originally purchased X for $44 billion in October 2022, taking it private. However, X's valuation has seen considerable fluctuation since then, with Fidelity previously valuing it at less than $10 billion.

The acquisition is structured as an all-stock deal, with shares of X and xAI being exchanged for shares in a new holding company, xAI Holdings Corp. Executives reportedly believe this consolidation will simplify fundraising efforts for the combined entity.

Musk's Vision for Integration

Musk stated that the futures of xAI and X are "intertwined" and that the acquisition represents a crucial step in combining their resources. "Today, we officially take the step to combine the data, models, compute, distribution and talent," he announced. This integration is expected to provide xAI with a significant advantage in the competitive AI landscape.

Strategic Advantages for xAI

One of the primary benefits of this merger for xAI is access to X's massive dataset and its extensive user base, estimated at over 600 million active users. This data is invaluable for training advanced AI models, including xAI's chatbot, Grok. By having direct access to real-time conversations, trends, and user interactions on X, xAI can potentially develop more sophisticated and context-aware AI systems.

xAI's Progress and Ambitions

Founded in 2023 to compete with industry leaders like OpenAI and Google DeepMind, xAI has been rapidly expanding its capabilities. The startup has attracted top AI researchers and is building substantial AI data centers. In February 2025, xAI released Grok 3, a frontier AI model that has shown competitive performance on benchmarks for math, science, and coding.

Musk's aggressive fundraising for xAI has already secured billions, with a $6 billion round in December 2024 valuing the startup at $45 billion, a figure now reportedly surpassed by the $80 billion valuation post-acquisition.

Competition and Legal Battles

Musk's ventures in AI extend to his ongoing efforts to challenge OpenAI, a company he co-founded. He is actively working to thwart OpenAI's for-profit transition, which is critical for its future funding. Musk has filed lawsuits against OpenAI and its CEO Sam Altman, and previously submitted a $97 billion takeover bid for the company, which was rejected.

X's Valuation and Musk's Influence

Following the inauguration of President Donald Trump, for whom Musk campaigned and now serves as a special adviser, X's valuation has reportedly seen an increase. This resurgence is attributed to investor confidence in the platform's growing influence. Musk's history of intertwining his companies has previously led to legal scrutiny, but this latest move underscores his strategy of leveraging his diverse business empire to advance his AI ambitions.

TechCrunch Events

The article also highlights upcoming TechCrunch events, including "TechCrunch All Stage" in Boston on July 15, 2025, focusing on founder and VC insights across all stages of company growth.

Topics Covered:

AI and its integration with social media platforms.
The business and financial aspects of AI startups.
Elon Musk's strategic moves in the AI industry.
Competition among major AI players like xAI, OpenAI, and Google DeepMind.
The role of data in AI development.

This acquisition marks a significant moment in the tech industry, potentially reshaping the landscape of AI development and social media integration.