Xai, an AI startup for Elon Musk, has acquired social media platform X, previously known as Twitter, through an all-stock deal. He announced in X’s post Friday.
“Xai acquired X through all stock trading,” Musk says. “The combination values Xai at $8 billion and X at $33 billion ($12 billion less than $45 billion).
Musk went on to describe the future of both companies as “intertwined.” He said, “Today we have formally taken a step towards combining data, models, calculation, distribution and talent.”
The acquisition led Musk, a highly influential social media platform that he purchased on his previous name Twitter in 2022, to firmly place X under the umbrella of Musk’s AI startup, competing with Openai in 2023. Xai’s products, including the AI chatbot Grok, were firmly integrated into the X platform prior to this agreement, but Friday’s acquisition combines two of Musk’s most well-known companies even further.
According to a publication that includes the Wall Street Journal, X and Xai shares will be exchanged for shares in a new holding company called Xai Holdings Corp. WSJ reports that it believes it would be easier for executives from both companies to raise funds for the total entities.
Musk, who leads Tesla, SpaceX and Neuralink, points out in his post that the deal values X at $33 billion (decreased from the company’s $45 billion corporate value due to the company’s $12 billion debt). The mask originally purchased X for $44 billion in October 2022, making it private. However, in recent years, the reviews have been shaking dramatically. At one point, Fidelity valued the X at under $10 billion.
For months after President Donald Trump took office, X’s ratings rose as Musk actively campaigned and Musk now serves as the special adviser leading the Kudji. Musk said in his post Friday that X has more than 600 million active users.
Musk launched Xai in 2023 and has since strengthened industry-leading AI researchers and startups from Google Deepmind, Microsoft and Openai, building the large AI data centers needed to keep up with other frontier AI developers. To promote these efforts, Musk took part in a historic fundraising campaign, including a $6 billion fundraising round in December, valued the startup at $45 billion. According to Musk, Xai has a valuation of $80 billion, which is even higher.
Xai has been largely successful in Mad Dash to catch up with Openai, Google Deepmind and humanity. In February, the startup released the Grok 3, a frontier AI model that competes with industry-leading AI models in benchmarks measuring mathematics, science and coding.
However, Xai’s success has not stopped Musk from interfering with Openai, the startup he co-founded with Sam Altman. Musk is currently trying to stop Openai’s commercial transition (which must be completed to secure future funds) in one or more ways. The owner of Xai’s billionaire has made Openai’s for-profit transition at the heart of his lawsuit against Openai. Musk also submitted a $97 billion purchase bid to Altman’s startup in February. Openai’s board of directors quickly rejected the idea, but it is possible that they have already raised the market price of Openai’s assets.
One of the main benefits Xai has over Openai and other startups is access to X. With the massive posts x has accumulated over the years, Xai offers great advantages in racing AI training data. Additionally, X offers a huge consumer app that reaches users to Musk’s AI startups.
Musk has a history of blurring the lines between many companies, and previously suffering from legal trouble. With Xai’s acquisition of X, the two have effectively become one. And this move suggests that X’s true value may lie in moving forward Musk’s broader AI ambitions.
This story has been updated with additional details on the structure of the transaction.
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