Elon Musk Sells X To His Own AI Firm xAI In $33 Billion All-Stock Deal

In an unexpected move, Elon Musk announced on Friday that he had sold the social media platform X to his artificial intelligence (AI) company, xAI, in a deal worth $33 billion. The acquisition was carried out entirely through an all-stock transaction.

Musk stated in a post on X that the deal would "unlock immense potential by blending xAI's advanced AI capabilities and expertise with X's vast user base."

Photo Credit: AP/PTI

Elon Musk, who is the CEO of Tesla and SpaceX and also serves as an advisor to US President Donald Trump, originally acquired the platform - then known as Twitter - in 2022 for $44 billion. He later rebranded it as X, dismissed the majority of its staff, and overhauled its policies on hate speech, misinformation, and user verification.

What Did Elon Musk Say About the X Deal?

In his post on X, Musk outlined the rationale behind the decision to sell X to xAI:

"xAI and X's futures are intertwined. Today, we officially take the step to combine the data, models, compute, 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.

He revealed that the deal values xAI at $80 billion and X at $33 billion.

"The combined company will deliver smarter, more meaningful experiences to billions of people, while remaining committed to our core mission of pursuing truth and advancing knowledge," he added.

What is xAI, the Company That Acquired X?

xAI is a public-benefit corporation based in the United States, operating in the field of artificial intelligence. Founded by Elon Musk in March 2023, its mission is "to understand the true nature of the universe".

Headquartered in the San Francisco Bay Area, California, xAI marked Musk's return to the AI sector following his earlier involvement with OpenAI.

Officially launched in July 2023, xAI began with a team of 12, including Musk himself. Several team members have prior experience with projects like GPT and work at Google DeepMind. Among them is Igor Babuschkin, formerly of DeepMind, whom Musk brought on board as Chief Engineer.

According to its website, xAI is focused on addressing "real-world problems".

"Our approach to rapid development and iteration allows us to innovate at breakneck speeds. We're not interested in speed for speed's sake-we're here to solve real problems," the site explains.

In November 2023, Musk unveiled xAI's first major project, Grok. The AI assistant was subsequently integrated into X and made freely available to all users shortly afterwards. In recent months, Grok has seen a surge in popularity, particularly in countries like India.

Who Owns xAI?

Elon Musk founded xAI in 2023 and remains its primary owner and driving force. Both X and xAI are privately held entities, meaning specific details about other potential stakeholders in xAI have not been publicly disclosed.