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Musk’s startup xAI takes over X in $33 billion mega deal

Elon Musk has sold his social media platform, X, to his AI startup xAI in a $33 billion all-stock deal, aiming to integrate AI advancements with X’s global reach. The transaction marks a significant consolidation of Musk’s enterprises, enhancing competition in the artificial intelligence sector.

News Arena Network - California - UPDATED: March 29, 2025, 08:43 AM - 2 min read

Elon Musk’s artificial intelligence startup xAI acquires social media platform X in a $33 billion deal.


Elon Musk has announced the sale of his social media platform, X, to his artificial intelligence startup xAI in an all-stock transaction that values X at $33 billion. The deal marks a major consolidation of Musk’s ventures, integrating X’s expansive user base with xAI’s advancements in artificial intelligence.

 

Musk, who acquired Twitter for $44 billion in late 2022 before rebranding it as X, stated that the deal would unlock "immense potential" by merging xAI’s technological expertise with X’s global influence.

 

"This will allow us to build a platform that doesn't just reflect the world but actively accelerates human progress," he said in a post on X.

 

The transaction also places xAI at a valuation of $80 billion, factoring in X’s existing $12 billion debt. The startup, launched in 2023, has heavily invested in high-performance Nvidia chips to support its artificial intelligence development.


Also read: 'Not for sale': OpenAI turns down Musk’s $97.4 billion takeover bid


In February, xAI introduced Grok 3, its latest chatbot iteration, which Musk has described as "scary smart" due to its significantly enhanced computational capabilities.

 

Grok 3 is positioned as a competitor to OpenAI’s ChatGPT and China’s DeepSeek, further intensifying Musk’s rivalry with OpenAI’s chief executive Sam Altman.

 

The two entrepreneurs were part of OpenAI’s founding team in 2015, but their professional relationship has deteriorated in recent years. Musk left the company in 2018, and following the success of ChatGPT in 2022, tensions between the two have escalated.

 

Meanwhile, industry analysts at Emarketer predict that X’s advertising revenue will see an increase this year.

 

According to Emarketer’s principal analyst Jasmine Enberg, some advertisers may feel compelled to spend on X to avoid potential "legal or financial repercussions" due to Musk’s political influence.

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