Elon Musk sells his social platform X to his AI company xAI
- Marijan Hassan - Tech Journalist
- Mar 31
- 2 min read
Elon Musk has announced that he is selling his social media platform, X, to his artificial intelligence company, xAI, in a $45 billion deal. The transaction, which includes $12 billion in debt, slightly exceeds the $44 billion Musk paid for Twitter in 2022 before rebranding it as X. The deal values X at $33 billion and positions xAI as a dominant force in the AI landscape.
Musk took to X to explain his rationale for the deal, stating that “xAI and X’s futures are intertwined.” He emphasized that the acquisition would enable a deeper integration of AI into X’s ecosystem, leveraging xAI’s cutting-edge models, vast data access, and computational resources.
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk wrote, adding that the newly combined entity will be valued at $80 billion.
While no immediate changes to X’s operations have been announced, xAI’s Grok chatbot is already embedded into the platform. Musk hinted that future developments could bring “smarter, more meaningful experiences” to X users through AI-driven innovations.
A reversal of fortunes for X
The deal marks an unexpected rebound for X, which had been struggling with declining value since Musk’s acquisition. Investment firm Fidelity estimated in late 2023 that X’s worth had plummeted by nearly 80% compared to its original purchase price, with subsequent evaluations suggesting a modest recovery to around 30% of its initial value.
Musk’s tenure at X has been turbulent, with mass layoffs, changes to content moderation policies, and a loss of major advertisers. While X’s valuation remains lower than its 2022 price tag, the deal signals a potential revival by aligning it with the booming AI sector.
Musk’s growing AI empire
The move further cements Musk’s ambitions to dominate artificial intelligence. xAI, launched in 2023, recently raised $10 billion at a valuation of $75 billion, and Musk has been vocal about his goal to rival OpenAI, the creator of ChatGPT.
Musk has been at odds with OpenAI and its CEO, Sam Altman, even suing the company over its transition from a nonprofit to a for-profit entity. His attempts to acquire OpenAI for nearly $100 billion earlier this year failed, but this latest deal could position xAI as a powerful competitor in the generative AI space.
What does all this mean
The long-term impact of this deal remains unclear, but one thing is certain: Musk is betting big on AI. By absorbing X into xAI, he secures a powerful testing ground for his AI models, a massive dataset for training algorithms, and a direct distribution channel to millions of users.
