Elon Musk, the world's richest person, has sold his social media platform, X (formerly Twitter), to his AI company, xAI, in a $33 billion deal. This move intertwines the future of X and xAI, promising users a smarter and more effective experience. Musk's decision has sent ripples through the tech industry.
X and xAI's $33 Billion Deal
Elon Musk's AI company, xAI, has acquired X for $33 billion. The deal values xAI at $80 billion and X at $33 billion. Musk stated that this merger will enhance X by combining AI's advanced capabilities with X's extensive user base. With over 600 million active users, X remains one of the world's largest social media platforms.
X's Unimproved Financial Condition
Musk purchased Twitter for $44 billion in 2022 and rebranded it as X. However, despite numerous changes over the past two years, the company's financial situation hasn't significantly improved. According to Fidelity, X's valuation plummeted to $12 billion by December 2024. This prompted Musk to sell X to xAI to steer it back on track.
Musk's Rapidly Growing AI Startup, xAI
xAI, launched in March 2023, has experienced rapid growth. In December 2024, it secured $6 billion in investments, boosting its valuation to between $35 and $40 billion (compared to $24 billion in May 2024). The acquisition of X further strengthens xAI's position.
Musk Explains the Sale of X
Musk commented on the acquisition, stating, "We are taking a significant step towards unifying data, models, computing, distribution, and talent. The future of X and xAI is intertwined, leading to a new and smarter experience." He described the deal as just the beginning and praised the dedication of X and xAI's employees. Linda Yaccarino, CEO of X, responded to the deal saying, "The future is brighter than ever."
