Elon Musk’s artificial intelligence company, xAI, has officially acquired his social media platform X in an all-stock deal valued at $33 billion, which includes $12 billion of debt. This announcement follows a recent surge in X’s financial performance after former President Donald Trump’s reelection, which enhanced advertisers’ confidence and drew in more investor interest.
Musk noted on X that the futures of xAI and X are closely linked, emphasizing the potential for combining xAI’s AI capabilities with X’s extensive user base. Following the announcement, both Linda Yaccarino, CEO of X, and Igor Babuschkin, cofounder of xAI, expressed their support for the acquisition online.
The fate of Yaccarino’s role and the implications for X’s employees post-acquisition remain unclear, and neither Musk nor other executives provided additional comments at this time.
Musk had purchased Twitter—now X—in 2022 for $44 billion, financing it through a consortium of Wall Street banks. After taking over, the platform’s advertising revenues plummeted, causing difficulties for lenders trying to offload the acquired debts, which led to serious financial repercussions that were termed "the worst buyout for banks since the financial crisis."
However, X’s situation began to improve following Trump’s reelection and Musk’s appointment at the Department of Government Efficiency, which revitalized interest among investors and advertisers.
Musk had also granted X investors a 25% stake in xAI last year, which bolstered the platform’s market value and assuaged creditor concerns. xAI had initially been established to delve into the nature of the universe but has since gained notoriety for its chatbot, Grok, launched as part of the X platform in late 2023.
To further its ambitions, xAI has created a supercomputer named Colossus, equipped with a massive setup of 100,000 GPUs located in Memphis, Tennessee, that positions it to compete more robustly with major players like OpenAI and Google.
