Elon Musk’s Xai artificial intelligence company has acquired Musk’s X, a social media platform previously known as Twitter, for $330 billion, marking the latest twist on rapid integration of the billionaire.
The all-stock deal, announced Friday, combines two of Musk’s multiple portfolio companies, including automaker Tesla and SpaceX, which could facilitate Musk’s ability to train his AI model, known as Grok.
Musk announced the deal in a post on X, saying:
“The future of Xai and X are intertwined,” he wrote. “Today, we have formally taken a step towards combining data, models, calculation, distribution and talent.”
Neither X nor Xai spokesman responded immediately to requests for comment. Many details of the transaction remained unknown, including how investors will be compensated, how X’s leaders will be integrated into the new company, or a prospect of regulatory scrutiny.
“The development is surprising and somewhat unexpected,” said Paolo Pescatore, a visionary analyst at PP. “To some extent, it closes the chapter in the turbulent story of X.”
“The $45 billion choice is no coincidence,” said Gil Luria, an analyst at Da Davidson & Co. “$1 billion more than Twitter’s Take-Private Transaction in 2022,” he can share the value of the Xai business with X co-investors.
Musk, the world’s wealthiest person, has integrated power in Washington, D.C. by overseeing so-called government efficiency, or the Trump administration’s cost-cutting efforts as head of Doge. It also put him in a position that could potentially affect the institutions overseeing his business transactions.
Xai investors, and now the combined entity, told Reuters that they were not surprised by the deal, viewing it as a merger of his leadership and management team in his own company. Investors rejected the name.
Musk did not ask investors for approval, but the two companies are working closely together and reported that the integration will encourage deeper integration with Grok.
According to media reports, Musk’s Xai startup started two years ago and raised $10 billion in a funding round valued at $75 billion.
In February, 53-year-old Musk placed a $97.4 billion bid for a consortium of ChatGpt maker Openai. This was rejected. In 2015, Musk co-founded Openai with CEO Sam Altman.
Musk competed directly with the popular Openai platform, filing a lawsuit in federal courts in California, preventing rivals from converting from nonprofits to commercial businesses. Earlier this month, a judge denied a request for a mask for a provisional injunction that would prevent the conversion.
The wide release of AI software has sparked a surge in investment and competition in Silicon Valley. To become more efficient, companies are looking for ways to integrate software into almost every part of their business.
As AI competition grows, Xai is increasing the ability of its data centers to train more advanced models, and its supercomputer cluster, called the Colossus in Memphis, Tennessee, is touted as the largest in the world.
Xai introduced Grok-3, the latest iteration of chatbots in February. It is about to compete with Chinese AI companies Deepseek and Microsoft Backed Openai. The X platform can help you distribute more Xai products, while also providing real-time feeds of user meditation, screenshots and other data.
Musk signed a deal in 2022, bought X and then Twitter for $44 billion, ending its first run as a public company since its initial public offering in 2013, and declared “the birds will be released” when the acquisition ends.
He stumbled the company’s workforce after the acquisition, urging advertisers to flee the platform and to rapidly decline in revenue. Recently, as mask influence grew in the Trump administration, the brand has returned to X.
According to sources familiar with the transaction, the seven banks that extended their loans to Musk to buy X and then extended their loans to XK to buy X, maintained their book debt for two years to buy X, according to sources familiar with the transaction.
This was possible after, among other factors, surged interest in exposure to AI companies, along with improved X’s operational performance over the previous two quarters, along with surge in interest from investors in their exposure to AI companies.
Investors who purchased debts from banks after the merger will make a profit, said Espen Robak, founder of Pluris Aluation Advisors, which specializes in non-current assets. “It’s true, even if it’s not fully paid off, debt is more valuable now.”
Separately, a US judge on Friday declined a bid by mask to dismiss a lawsuit alleging that he had fraudulent former Twitter shareholders after waiting too long to disclose his initial investment in the company.
