On Friday, Elon Musk stated that his artificial-intelligence company xAI has bought X, a social media platform, in an all-stock deal, so aggregating their technical resources.
Musk said in a post on X, formerly Twitter, that the deal values X at $33 billion and xAI at $80 billion.
“X’s futures are entwined with xAI,” Musk remarked. “Today we formally move to combine the data, models, computation, distribution, and skills. Combining X’s vast reach with xAI’s advanced AI capacity and knowledge will unleash great potential.
“The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our basic mission of seeking truth and advancing knowledge,” he said.
Along with founding SpaceX, Musk, the richest man on Earth, is also the CEO of electric-vehicle manufacturer Tesla Inc. (TSLA). As the New York Times observed Friday, X’s value has varied while xAI’s has sped forward. In line with Friday’s news, the publication noted that Musk once purchased SolarCity Corp. almost ten years ago using Tesla stocks.
To increase its valuation somewhat over its $44 billion purchase price, X this month raised almost $900 million from investors, according Friday’s Wall Street Journal story. Late last year the article also revealed that xAI was worth $50 billion.
The Friday Journal article also noted that X and xAI have shared resources and certain investors in common including Sequoia Capital, Vy Capital and Valor Equity Partners.
Past two years of artificial- intelligence frenzy, most famously represented by CoreWeave Inc.’s (CRWV) poor IPO Friday, have heightened the argument over whether the technology Big Tech has invested billions on is overhyped. More general questions still surround how artificial intelligence affects user privacy, the workforce, and the degree to which the technology appropriates human labor.
Starting xAI in 2023, Musk sought to challenge OpenAI. Having paid $44 billion for Twitter in 2022, he has since changed the platform to be more conservative. He has reportedly expressed his desire to make X a “everything app.”
Though sales are still down from 2022, X’s valuation has reportedly dropped and rebounded since then, and it was on track for its first year of ad-sales increase under Musk’s ownership. Advertisers have struggled with the platform; some of them quit over hate speech issues. But some brands have resurfaced as Musk’s relationships to President Donald Trump get stronger.
Still, Tesla’s stocks have fallen thus far this year. Customer boycotts have resulted from sales constraints the company faces as Musk supports far-right political parties in Europe and helps efforts to downsize the federal government.
