Elon Musk’s AI startup firm buys his own X social media platform

March 29, 2025 journo

Elon Musk’s artificial intelligence firm xAI has acquired his X, formerly known as Twitter, for around $52.3 billion, marking the latest twist in the billionaire’s rapid consolidation of power.

The all-stock deal combines two of Mr Musk’s portfolio of companies — which also include automaker Tesla and SpaceX — and potentially eases Musk’s ability to train his AI model known as Grok.

Mr Musk announced the transaction in an X post on Friday, local time, that the combination values xAI at $US80 billion ($127 billion) and X at $US33 billion ($52.3 billion), or $US45 billion less $US12 billion debt.

“xAI and X’s futures are intertwined,” he wrote. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”

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Mr Musk added that X had more than 600 million active users.

Details of the deal are yet to be disclosed, such as how investors may be compensated, how X’s leaders would be integrated into the new firm, or the prospect of regulatory scrutiny.

PP Foresight analyst Paolo Pescatore said this development felt surprising, saying: “To a certain extent, it closes a chapter in the turbulent saga of X.”

“The choice of $US45 billion is not a coincidence,” said D.A. Davidson & Co analyst Gil Luria. “It is $US1 billion higher than the take-private transaction for Twitter in 2022.”

What is xAI?

Mr Musk’s xAI startup was launched less than two years ago and recently raised $US10 billion in a funding round that valued the company at $US75 billion, according to Reuters.

In February, xAI introduced Grok-3, the latest iteration of its chatbot, as it tried to compete with Chinese AI firm DeepSeek and Microsoft-backed OpenAI.

The X platform can serve to further distribute xAI products, while also providing a real-time feed of users’ musings, screenshots and other data.

Earlier this year, Mr Musk made a $US97.4 billion bid with a consortium for the ChatGPT maker OpenAI, which was rejected, with OpenAI saying that the startup was not for sale.

Mr Musk co-founded OpenAI with CEO Sam Altman in 2015.

As competition in AI intensifies, xAI has been ramping up its data centre capacity to train more advanced models, and its supercomputer cluster in Tennessee, called “Colossus,” is touted as the largest in the world.

‘Twitter freed’

Mr Musk clinched a deal in 2022 to buy X, then Twitter, for $US44 billion, ending its run as a public company since its 2013 initial public offering, declaring that “the bird is freed” once the acquisition closed.

He axed the company’s workforce after the acquisition, prompting advertisers to flee the platform and a rapid decline in revenue.

The seven banks that extended $US13 billion in loans to Mr Musk to buy X kept the debt on their books for two years until they could sell it all at once last month, a source familiar with the transactions told Reuters.

After 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. “For sure the debt is worth more now, if not fully paid off.”

Separately, a US judge on Friday rejected a bid by Mr Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders by waiting too long to disclose his initial investment in the company.

Reuters/ABC