Elon Musk’s $80 billion valuation deal sees xAI acquire X

Social media site X was purchased by Musk’s AI company xAI for $33 billion in all-stock transactions.

Elon Musk declared on Friday that X, formerly known as Twitter, has been formally bought by his artificial intelligence business, xAI, combining its investor base and pool of resources.

Musk disclosed that the all-stock deal values xAI at $80 billion and X at $33 billion. Musk paid $44 billion for Twitter in 2022. “The merger would improve the development of AI by combining data, computing power, and distribution networks,” he said.

Musk stated on X that “xAI and X’s futures are intertwined.” “We formally take the step to integrate the data, models, computation, distribution, and talent today.”

The transaction may be made to safeguard investors who contributed to Musk’s acquisition of X, according to analysts. The two businesses currently have a large number of investors and resources in common. xAI uses X’s social media data to train its AI models, such as Grok, its chatbot.

According to IT analyst Paolo Pescatore, the agreement is consistent with general market trends. Given the present trend of higher investments in computing, data centers, and artificial intelligence, he said, “the move appears sensible.”

The purchase occurs while Musk is still battling OpenAI, the business he co-founded in 2015, in court. OpenAI and its CEO, Sam Altman, have come under fire from Musk for allegedly abandoning their initial charity goals and turning into a for-profit company.

A $40 billion funding agreement between OpenAI and SoftBank of Japan is apparently being finalized, subject to its restructuring. In the past, Musk tried to acquire OpenAI for $97.4 billion, but Altman turned it down.

Since Musk is now a major figure in the government of former President Donald Trump, pushing for federal budget cutbacks, his corporate and political interests have become more and more entwined. He has donated millions of dollars to a state Supreme Court campaign while he is in Wisconsin.

The attorney general of Wisconsin has made a contentious request to a court to prevent Musk from giving out $1 million cheques to voters prior to the election.

The xAI-X combination is yet another audacious step in Musk’s attempts to influence social media and AI while negotiating legal and political obstacles.