29-3-2025 – Elon Musk has orchestrated an intriguing merger between his artificial intelligence venture xAI and the social media platform X, formerly Twitter. The all-stock transaction, announced via X, values the AI enterprise at $80 billion whilst attributing a $33 billion valuation to X—figures that have raised eyebrows across the tech sector.
The timing of this consolidation proves particularly noteworthy, given X’s recent financial turbulence. Despite Fidelity Investments’ stark reassessment of X’s worth to approximately $9.4 billion by October 2024, Musk has positioned the merger as a strategic fusion of technological capabilities and social media reach.
@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
The announcement arrives against a backdrop of mounting competition in the social media landscape. Whilst X claims an impressive 600 million active users, rival platforms have made significant inroads. Threads, Meta’s challenger, has amassed over 320 million monthly active users by February 2025, whilst Bluesky has cultivated a dedicated following exceeding 27 million users by January 2025.
The merger’s architecture appears designed to address multiple challenges, not least X’s substantial $12 billion debt burden. By incorporating X into the xAI framework, the restructuring potentially opens avenues for fresh investment and strategic repositioning.
Musk’s venture into AI through xAI, launched in July 2023, emerged partly from his well-documented tensions with OpenAI’s Sam Altman. The integration of Grok, xAI’s flagship AI model, with X’s vast user data has sparked discussions about data privacy, particularly as the training settings defaulted to ‘enabled’ for all users.
The tech community’s response to the merger announcement has been notably sceptical. New York Times technology correspondent Ryan Mac’s sardonic comment on Bluesky—likening the deal to selling oneself a modest Honda at an inflated price—reflects widespread questioning of the valuation metrics employed.
Nevertheless, Musk envisions the consolidated entity as a catalyst for technological advancement, promising enhanced user experiences through the marriage of xAI’s artificial intelligence prowess and X’s extensive reach. Whether this ambitious fusion will deliver on its promises remains a matter of keen interest across the technology sector.
