Musk’s xAI Startup Acquires X Social Network

Elon Musk announced that his xAI artificial intelligence (AI) startup has acquired the X platform, which he also controls, at a valuation of $33 billion, marking a surprising twist for the social network formerly known as Twitter, Kurt Wagner and Katie Roof reported for Bloomberg News.

The deal provides clarity for X’s remaining investors after months of uncertainty following Musk’s drastic changes to the platform.

“The combination values xAI at $80 billion and X at $33 billion,” Musk wrote in a post on X. He added that the total value of X, when including $12 billion in debt, is $45 billion.

The acquisition is an all-stock transaction, creating a new entity called XAI Holdings, which is valued at more than $100 billion, not including debt, according to a source familiar with the deal.

Morgan Stanley acted as the sole banker on the transaction, representing both parties, other sources confirmed.

For Musk, the merger consolidates his businesses and strengthens the relationship between X (formerly Twitter) and xAI, which has used data from the social network to refine its chatbot technology.

The deal also provides clarity for X’s remaining investors after months of uncertainty following Musk’s drastic changes to the platform, which led to an exodus of users and advertisers.

Musk had acquired Twitter for $44 billion in late 2022, a deal that included significant debt. After taking control, he cut thousands of jobs, shut down offices, and renegotiated contracts.

Musk also sought to realign Twitter/X with his vision of “free speech absolutism”, eliminating certain content restrictions and reinstating previously banned accounts, Riley Griffin also reported for Bloomberg News.