March 28 (Reuters) – Elon Musk’s xAI artificial intelligence firm has acquired Musk’s X, the social media outfit formerly known as Twitter for $33 billion.
The all-stock deal announced on Friday consolidates two of Musk’s multiple portfolio companies, which also include automaker Tesla and SpaceX, and potentially eases the billionaire’s ability to train his AI model known as Grok. Including $12 billion in debt, the deal is valued at $45 billion.
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“The choice of $45 billion is not a coincidence,” said D.A. Davidson & Co. analyst Gil Luria. “It is $1 billion higher than the take-private transaction for Twitter in 2022” and he can share the value of the xAI business with Twitter co-investors.
Musk announced the transaction in a post on X
, opens new tab, saying that the combined entity would be valued at $80 billion.
“xAI and X’s futures are intertwined,” wrote Musk. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
Neither X nor xAI spokespersons immediately responded to a request for comment. Some of the deal’s specifics were not yet clear, such as whether investors approved the transaction or how investors may be compensated.
Musk, the world’s wealthiest man, has also consolidated his power in Washington, D.C. by overseeing the Trump administration’s cost-cutting efforts as head of the so-called Department of Government Efficiency, or DOGE.
His xAI startup was launched less than two years ago and recently raised $6 billion in a funding round that valued the company at $40 billion, sources told Reuters earlier.
In February, Musk, 53, made a $97.4 billion bid with a consortium for the ChatGPT maker OpenAI, which was rejected, with OpenAI saying that the startup was not for sale. Musk co-founded OpenAI with CEO Sam Altman in 2015.
As competition in AI intensifies, xAI has been ramping up its data center capacity to train more advanced models, and its supercomputer cluster in Memphis, Tennessee, called “Colossus”, is touted as the largest in the world.
xAI introduced Grok-3, the latest iteration of its chatbot, in February, as it tries to compete with Chinese AI firm DeepSeek and Microsoft-backed OpenAI.
Musk clinched a deal in 2022 to buy X for $44 billion, ending its run as a public company since its 2013 initial public offering, declaring that “the bird is freed” once the acquisition closed.
Separately, a U.S. judge on Friday rejected a bid by Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders by waiting too long to disclose his initial investment in the company.
Reporting by Seher Dareen in Bengaluru; Editing by Pooja Desai and Sandra Maler
Our Standards: The Thomson Reuters Trust Principles.
Greg Bensinger joined Reuters as a technology correspondent in 2022 focusing on the world’s largest technology companies. He was previously a member of The New York Times editorial board and a technology beat reporter for The Washington Post and The Wall Street Journal. He also worked for Bloomberg News writing about the auto and telecommunications industries. He studied English literature at The University of Virginia and graduate journalism at Columbia University. Greg lives in San Francisco with his wife and two children.
