X, the social media site formerly known as Twitter, is changing its address but staying within Elon Musk‘s corporate portfolio.
In a post on X, Musk said his artificial intelligence firm xAI acquired X in an all-stock deal valuing the platform at $45 billion, minus $12 billion in debt. The valuation of X ($33 billion) and xAI ($80 billion) create a merged entity worth $113 billion, according to Musk.
Musk bought Twitter in 2022 for $44 billion, with his proposal to acquire the company dragging on for months and no rival offers materializing. After he rebranded it to X and overhauled its operations, shrinking its staff to a fraction of its previous size and relentlessly tinkering with its algorithm and monetization models, the company lost a significant amount of value. The lack of content moderation led to a number of advertisers to pull their ads, though Linda Yaccarino, the seasoned former NBCUniversal and Turner exec who is X’s CEO, has sought to reverse the trend. Many institutional investors and private equity firms who backed Musk’s initial purchase have found themselves underwater.
In a post on X announcing the deal, Musk called the social media outlet “one of the most efficient companies in the world.” He added that xAI and X’s futures “are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach. The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge.”
The view from investors in Musk’s Twitter crusade has changed in recent months as Musk has emerged as a significant financial contributor and advisor to Donald Trump. After spending $270 million to help get Trump elected, Musk went on to oversee an efficiency drive that has disrupted the operations of many government agencies. His 219 million followers on X also help amplify the messages of the Trump White House.
Musk said X has amassed more than 600 million active users, but he didn’t elaborate on the methodology that yielded that stat. Before Musk’s ownership, as a public company Twitter reported user numbers and other metrics. In the second quarter of 2022, Twitter said it had “average monetizable daily active usage” of 237.8 million.
The AI arms race has seen tech behemoths like OpenAI, Meta Platforms, Amazon, Alphabet and Nvidia allocate tens of billions of dollars on large language models and AI software. Against these competitors, xAI has thus far not made a major dent, its Grok chatbot has already been integrated into the X platform, signaling the intermingling of the two companies now encouraged by their corporate merger.
Merging the AI and social media holdings “will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress,” Musk wrote. “I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning.”
Yaccarino reacted to the news on X with a short affirmation, writing, “The future could not be brighter.”
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