Elon Musk’s xAI Acquires X for $33 Billion

Elon Musk’s xAI, an artificial intelligence company, has acquired X (formerly known as Twitter) in a major $33 billion all-stock deal, a move that significantly reshapes both the social media and AI landscapes. This merger consolidates Musk's power across various industries, including technology, social media, and artificial intelligence.

The $33 Billion Acquisition: What You Need to Know

On March 28, 2025, Elon Musk announced that xAI, his AI startup, has acquired X for $33 billion. The deal values xAI at $80 billion and X at $33 billion, with the latter accounting for $12 billion in debt.

Deal Structure: This is an all-stock acquisition.
Value Breakdown: xAI is valued at $80 billion, while X is valued at $33 billion, with debt subtracted from the valuation.

Musk, who bought X (then Twitter) for $44 billion in 2022, said this merger would “unlock immense potential by blending xAI’s advanced AI capabilities and expertise with X’s massive reach.”

xAI and X’s Futures Are “Intertwined”

Musk’s post on X emphasized the synergy between the two companies:

The combination of data, models, compute power, distribution, and talent will fuel innovation.
xAI’s expertise in AI combined with X’s social media platform will create smarter and more meaningful experiences for billions of users.

This deal follows Musk’s purchase of Twitter in 2022, where he made sweeping changes, including laying off most of the workforce, rebranding the platform to X, and adjusting its policies on hate speech and misinformation.

@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).

Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at…— Elon Musk (@elonmusk) March 28, 2025

What is xAI? Musk's Ambitious AI Venture

xAI is a cutting-edge AI company founded by Musk in March 2023. It was established to rival AI giants such as OpenAI and Google DeepMind. Officially launched in July 2023, xAI aims to understand the true nature of the universe and solve real-world problems. Here are the key details about xAI:

Founding and Leadership: xAI was founded by Musk, and its leadership includes prominent AI experts, including Igor Babuschkin, who previously worked at Google DeepMind.
Focus and Mission: The company focuses on rapidly developing and iterating AI technology that can solve tangible, real-world problems.
Notable Projects: One of xAI’s first projects, Grok, is an AI chatbot that has already been integrated into X. The chatbot aims to provide intelligent, real-time interactions on the platform.

How Will the Acquisition Impact X’s Users?

While Musk hasn’t announced major immediate changes for X’s users, the integration of xAI into the platform promises several potential shifts:

AI-Powered Features: The integration of Grok, xAI’s AI chatbot, will provide smarter, more intuitive interactions. X users may see more personalized experiences driven by AI, although details on specific features are still unclear.
Data Integration: xAI has been using data from X’s user posts to train its AI models. This deep data-sharing could result in more advanced AI tools available to users but raises privacy and data concerns.
Access to Grok: Paying X users already have access to Grok. This could expand, offering new AI-driven services and interactions on the platform.

Musk’s Ambitions and Broader AI Strategy

Musk’s decision to merge X with xAI is part of his broader strategy to dominate the AI space. Some important points to note:

AI Rivalry with OpenAI: Musk has long been in competition with OpenAI, the company he co-founded. In 2023, he attempted to acquire OpenAI for $97.4 billion, but his bid was rejected. This move to acquire X aligns with Musk's goal of advancing his AI efforts in direct competition with OpenAI.
AI as a Central Focus: Musk’s AI ventures have ramped up significantly, with xAI working to scale its data centers and expand its supercomputer cluster, Colossus, which is touted as the world’s largest.

Impact on Musk’s Other Ventures

Beyond X and xAI, Musk’s portfolio includes Tesla, SpaceX, and his role in the Trump administration as an advisor on government efficiency. The merger between xAI and X fits into a larger strategy of consolidating power and influence across multiple sectors, including tech, aerospace, and AI.

Influence in Washington D.C.: As the head of the Department of Government Efficiency (DOGE), Musk has overseen significant cost-cutting efforts in the U.S. government. This positions him to exert considerable influence over policies that could affect his business interests, including AI regulation.
Continued Investment in AI: With xAI, Musk has a direct stake in one of the most rapidly growing sectors of the tech world. xAI’s AI-driven models could potentially change industries from social media to healthcare, finance, and beyond.

What Does This Mean for X’s Advertising Model?

Musk’s purchase of X in 2022 saw a significant loss of advertising revenue, partly due to changes in content moderation and user verification policies. However, the latest move signals a potential shift back to profitability:

Return of Advertisers: While early changes to X led to advertiser pullback, recent trends suggest that brands are beginning to return to the platform as Musk’s influence grows.
AI-Driven Advertising: The integration of AI into X could also transform advertising on the platform. By utilizing advanced AI tools, Musk could introduce more targeted, personalized, and efficient ad models, providing a new revenue stream for X.

Regulatory Scrutiny and Challenges

Given the scale and complexity of this merger, regulatory scrutiny is likely. The acquisition of X by xAI raises several questions about data privacy, antitrust concerns, and the future of social media regulation:

Data Privacy: With the merging of AI models and social media data, user privacy will be a critical issue. The sharing of user data for AI training could raise concerns among regulators and users alike.
Antitrust Issues: As Musk consolidates power in both AI and social media, there may be concerns about monopolistic practices and the influence one individual could have over both industries.

What Happens Next?

For X users, the immediate future may not bring drastic changes, but the integration of xAI’s tools could slowly transform the platform. As xAI expands and evolves, more advanced AI tools may become integrated into the platform, improving the user experience.

However, the full impact of the merger will unfold over time as Musk continues to combine the reach of X with the capabilities of xAI’s advanced AI models.

A Game-Changing Move for AI and Social Media

Elon Musk’s decision to sell X to xAI for $33 billion represents a transformative moment in the tech world. The merger combines Musk’s ambitions in AI with the massive reach of X, creating a potent force that could redefine social media and artificial intelligence. As this merger takes shape, it will have a significant impact on users, advertisers, and the tech industry at large. The full extent of this acquisition will become clearer as xAI’s AI-driven features become more deeply integrated into X, and Musk continues his push to reshape the digital landscape.

With inputs from agencies

Image Source: Multiple agencies