Elon Musk’s artificial intelligence company, xAI, has taken over the social media platform X through an all-stock transaction that values the platform at $33 billion, inclusive of $12 billion in debt, according to an announcement made by the billionaire on Friday. This acquisition follows a period in which Musk reportedly secured an additional $1 billion in debt financing for X, appraising the company at $44 billion—the amount he initially paid for it three years prior.
Musk stated in a post on X that the futures of xAI and X are closely connected. He expressed that the integration of data, models, computing, distribution, and talent from both entities would unleash significant potential by merging xAI’s advanced AI capabilities with X’s extensive reach.
Linda Yaccarino, the CEO of X, and Igor Babuschkin, the co-founder of xAI, shared messages of support for the acquisition on X shortly afterwards. Yaccarino expressed enthusiasm for the future, while Musk signaled his agreement by reposting Babuschkin’s message.
Details about Yaccarino’s future role or the implications for X’s employees remain unclear, as Musk, Yaccarino, and Robert Keele, head of xAI’s legal team, did not provide comments before the publication of the news.
Musk had acquired Twitter in 2022, subsequently renaming it X, with funding through substantial loans from various Wall Street banks and other lenders. Following the takeover, X faced challenges as its advertising revenue declined, making it difficult for banks to offload the loans. According to the Wall Street Journal, this situation was described as “the worst buyout for banks since the financial crisis.”
However, the financial status of X improved when Donald Trump was reelected, and Musk was appointed to lead the Department of Government Efficiency, which increased investor interest in the debt. Advertisers began to return as Musk’s connections with the White House and Trump grew stronger.
Furthermore, Musk granted X investors a 25 percent stake in xAI last year, a move that contributed to enhancing X’s value and securing lenders, as reported by the Financial Times.
Though xAI initially appeared to lag behind competitors like OpenAI and Google, Musk bolstered the company by assembling a significant cluster of 100,000 GPUs, providing enough computing capacity to compete with major industry players. This supercomputer, named Colossus, is based in Memphis, Tennessee.
Originally, xAI aimed to explore the nature of the universe, but it has gained recognition for developing an “unfiltered” chatbot named Grok, which has been integrated into the X platform since late 2023.
