Musk’s xAI buys social media platform X for $33 billion

Elon Musk has announced that his AI venture, xAI, has acquired his social media platform X (formerly Twitter) in an all-stock transaction.

The deal values xAI at $80 billion and X at $33 billion. Musk, who acquired X for $44 billion in 2022, stated the move aims to combine the data, models, compute, distribution, and talent of both companies.

The acquisition comes amidst Musk’s ongoing legal battle with OpenAI, the AI company he co-founded. Musk alleges OpenAI has deviated from its original mission by pursuing a for-profit model. This acquisition may be seen as a strategic move to strengthen xAI’s position in the AI landscape.

X has been a crucial source of data for xAI’s AI models, and the platform features xAI’s chatbot Grok. Analysts see the acquisition as a logical step, given the increasing investment in AI, data centres, and computing.

The deal also occurs just as, according to the WSJ, OpenAI is finalizing a $40 billion funding round with SoftBank, contingent on its transition to a for-profit entity. Musk’s earlier $97.4 billion takeover bid for OpenAI was rejected.

Musk’s increased political involvement, including his role as a key advisor to a political figure and financial contributions to a Wisconsin Supreme Court race, adds another layer of complexity to the acquisition. A Wisconsin attorney general has sought to block Musk’s distribution of $1 million checks to voters.