Musk sells X to his startup - Changes for users
Photo: Elon Musk (Getty Images)
Elon Musk announced the sale of the social network X (formerly Twitter) to his startup xAI for $45 billion. The deal includes $12 billion in debt, and its goal is to closely integrate the platform with artificial intelligence technologies, according to Musk’s post on X and CNN.
According to the American billionaire, who now leads the US Department of Government Efficiency (DOGE), the deal gives X a valuation of $33 billion.
The stated sale amount of $45 billion is slightly higher than what Musk paid in 2022.
"The futures of xAI and X are intertwined," Musk wrote in a post on the social network on March 28.
He noted that "we are officially taking the step to combine data, models, computing, distribution, and talent."
"This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach," Musk wrote.
No immediate changes to platform announced yet
Musk did not state any immediate changes to X, though xAI's chatbot Grok has already been integrated into the social media platform.
Musk mentioned that the combined platform "will deliver smarter, more meaningful experiences."
He also mentioned that the value of the combined company is $80 billion.
After acquiring Twitter in 2022, Musk made a number of changes to the platform, which caused some major advertisers to leave. He also fired 80% of the company’s staff, revamped the platform’s verification system, and reinstated suspended accounts of white nationalists in the months following the acquisition.
X's valuation
Despite the fact that X’s valuation is lower than Musk paid for the social network, this still marks a change in the company’s trajectory, according to Western media.
In October, the investment company Fidelity estimated that X was worth almost 80% less than when Musk purchased it. According to Fidelity, whose Blue Chip fund holds a stake in X, by December, the platform had somewhat recovered but was still worth only about 30% of what Musk originally paid.
Musk's efforts to lead AI Industry
Musk, among other things, is trying to establish himself as a leader in artificial intelligence, a focus of both President Donald Trump's administration and the tech industry.
Earlier this year, he led a group of investors attempting to buy the creator of ChatGPT, OpenAI, for nearly $100 billion, marking another escalation in the long-standing rivalry between Musk and OpenAI CEO Sam Altman.
It is still unclear how this acquisition will benefit Musk's AI ambitions. However, the closer integration with X could allow xAI to accelerate the promotion of its latest AI models and features to a wide audience.
As reported in February, X is negotiating to raise funds, which would value the company at $44 billion. It is unclear what came out of these negotiations and why xAI is valuing X lower than what it could have gotten from investors.
In February, the OpenAI Board of Directors rejected Musk’s proposal to buy the company for $97.4 billion. One of the executives, Bret Taylor, stated that OpenAI was not for sale.
Additionally, Elon Musk introduced the Grok 3 chatbot, which is considered one of the smartest AI models in the world.
