Elon Musk's artificial intelligence company, xAI, has officially acquired X, the social media platform formerly known as Twitter, in a $33 billion all-stock deal.
The announcement, made by Musk on Friday, places a combined valuation of $80 billion for xAI and $33 billion for X, factoring in $12 billion in debt.
"xAI and X's futures are intertwined," Musk wrote in a post on X. "This combination will unlock immense potential by blending xAI's advanced AI capability and expertise with X's massive reach."
The move marks a significant step in Musk's vision to integrate AI more deeply into the digital landscape. X, which Musk acquired for $44 billion in 2022, has undergone dramatic changes under his leadership, from mass layoffs to a complete rebranding.
The Strategic Integration of AI and Social Media
xAI, founded by Musk in 2023, has rapidly become a leading AI lab with a focus on developing artificial intelligence to accelerate human scientific discovery. Its flagship AI chatbot, Grok, has been integrated with X and uses the platform's data for training and development.
By acquiring X, Musk is consolidating AI innovation with one of the world’s most influential social media networks. This move enables xAI to access vast real-time datasets and expand its AI capabilities, while X benefits from the technological advancements and AI-powered features that xAI can offer.
"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," Musk stated.
Financial Repercussions and Industry Impact
The acquisition comes after a turbulent period for X. Following Musk's takeover, the platform faced an exodus of advertisers and controversy over content moderation policies. Yet, recent reports indicate that major advertisers like Disney (DIS) and Apple (AAPL) have returned, with projections showing a 17.5% rise in X's U.S. ad sales this year, reaching $1.31 billion.
Meanwhile, Fidelity’s recent valuation of X at $12.32 billion underscores the volatility surrounding the platform’s worth. Musk’s deal values X far higher, a move some analysts interpret as a strategic bid to bolster xAI’s perceived market strength.
The acquisition also mirrors Musk’s earlier business maneuvers, such as Tesla’s (TSLA) 2016 acquisition of SolarCity, which faced legal challenges from shareholders. While no lawsuits have emerged yet, experts suggest similar scrutiny could follow this high-profile deal.
"This is just the beginning," Musk concluded in his announcement, emphasizing confidence in the merged companies' future.
With xAI and X now operating as a single entity, the industry will be closely watching how this fusion of artificial intelligence and social media shapes the digital landscape in the coming years.
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