Washington
\nElon Musk\u2019s xAI acquired X in a deal that valued the social media platform at $33 billion and allowed the value of his artificial intelligence firm to be shared with his co-investors in the company formerly known as Twitter.
\nThe deal could also help xAI\u2019s ability to train its chatbot known as Grok.
\n\u201cxAI and X\u2019s futures are intertwined,\u201d Musk, who also heads automaker Tesla and SpaceX, wrote in a post on X: \u201cToday, we officially take the step to combine the data, models, compute, distribution and talent.\u201d He said the combination values \u201cxAI at $80bn and X at $33bn ($45bn less $12bn debt)\u201d.
\nRepresentatives for X and xAI did not immediately respond to requests for comment. Much of the deal\u2019s specifics remain unclear, such as how X\u2019s leaders would be integrated in the new firm or whether there would be regulatory scrutiny.
\nMusk, the world\u2019s wealthiest man, is also a close ally of US President Donald Trump and heads the Department of Government Efficiency.
\nSaudi Arabian investor Prince Alwaleed bin Talal, who owns the investment company Kingdom Holding, said he had requested the development.
\nHe noted his companies are the second-largest investors in X and xAI. \u201cAfter this deal, the value of our investments is expected to reach between $4-5bn \u2026 and the meter is running,\u201d he said in a post on X.
\nD.A. Davidson analyst Gil Luria said the price tag for X of $45bn when debt was included was not a coincidence.
\n\u201cIt is $1bn higher than the take-private transaction for Twitter in 2022.\u201d
\nAn investor in xAI who declined to be identified said they were not surprised by the deal, viewing it as Musk consolidating his leadership and management at his own companies.
\nMusk did not ask investors for approval but told them that the two companies had been collaborating closely and the deal would drive deeper integration with Grok, the investor said.
\nOpenAI rivalry
\nMusk\u2019s xAI startup was launched less than two years ago and recently raised $10bn in a funding round that valued the company at $75bn, according to a media report.
\nIt competes with the likes of Microsoft-backed OpenAI as well as with Chinese startup DeepSeek.
\nIn February, Musk, 53, made a $97.4bn bid with a consortium for OpenAI, which was rejected and he has sued to prevent the ChatGPT maker from converting from a non-profit to a for-profit business. A judge this month denied Musk\u2019s request for a preliminary injunction that would prevent the changeover.
\nAs competition in AI intensifies, xAI has been ramping up its data centre capacity to train more advanced models, and its supercomputer cluster in Memphis, Tennessee, called \u201cColossus\u201d, is touted as the largest in the world.
\nxAI introduced Grok-3, the latest iteration of its chatbot, in February.
\nThe X platform could serve to further distribute xAI products, while also providing a real-time feed of users\u2019 musings, screenshots and other data.
\nAfter buying Twitter, Musk gutted the company\u2019s workforce, prompting advertisers to flee the platform and a rapid decline in revenue. Recently, brands have been returning to X as Musk\u2019s influence in the Trump administration grows.
\nThe seven banks that extended $13bn in loans to Musk to buy X kept the debt on their books for two years until they were able to sell it all at once last month, according to a source familiar with the transactions.
\nThis was made possible after a surge in investor interest for exposure to AI companies along with X\u2019s improved operating performance over the previous two quarters, among other factors, according to two people familiar with the matter.
\nAfter the merger, investors who bought the debt from the banks will profit, said Espen Robak, founder of Pluris Valuation Advisors, which specialises in illiquid assets.
\n\u201cFor sure the debt is worth more now, if not fully paid off.\u201d
\nSeparately, a US judge on Friday rejected a bid by Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders by waiting too long to disclose his initial investment in the company.<\/p>\n","protected":false},"excerpt":{"rendered":"
Washington Elon Musk\u2019s xAI acquired X in a deal that valued the social media platform at $33 billion and allowed the value of his artificial intelligence firm to be shared with his co-investors in the company formerly known as Twitter. The deal could also help xAI\u2019s ability to train its chatbot known as Grok. \u201cxAI […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-469986","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n