Elon Musk’s xAI Acquires X for $33 Billion, Shaking Up the Tech World

In a surprising move, Elon Musk’s xAI startup has just acquired the platform X, formerly known as Twitter, at a jaw-dropping $33 billion valuation – shaking up the tech world once again.

Musk has never been one to play by the rules, and this latest move raises big questions. What does this mean for X’s future? How will AI change the platform?

Let’s break it all down.

A High-Stakes Transaction

Musk announced on X that his xAI company is now valued at $80 billion, while X is worth $33 billion. When including $12 billion in debt, X’s total valuation reaches $45 billion. The acquisition was structured as an all-stock deal, meaning no cash was exchanged.

As a result, a new entity called XAI Holdings has been formed, with a total value exceeding $100 billion (excluding debt). Morgan Stanley acted as the sole banker for the deal, representing both sides. Musk emphasized that xAI and X will now work more closely together, using AI to enhance the platform and unlock new opportunities.

How the Deal Affects Investors

Because Musk owns both xAI and X, analysts believe this was likely a stock swap, meaning X investors will now hold shares in xAI. The two companies also share several major investors, including venture capital firms Andreessen Horowitz, Sequoia Capital, Fidelity, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.

X CEO Linda Yaccarino praised the deal, saying, “The future could not be brighter.”

Analyst Paolo Pescatore, founder of PP Foresight, called it a logical move given the rising demand for AI, data centers, and computing power.

Musk’s Growing Influence in AI and Government

Elon Musk founded xAI in 2023 as a competitor to OpenAI. The startup recently secured $6 billion in funding, bringing its valuation to $40 billion. Meanwhile, Musk’s 2022 purchase of Twitter for $44 billion led to aggressive cost-cutting and reduced content moderation, causing a drop in ad revenue. However, Musk has since been using X to promote xAI’s chatbot, Grok, which is trained on data from X users.

Beyond tech, Musk has also become more involved in politics. After donating nearly $300 million to Donald Trump’s 2024 campaign and other Republican causes, he was appointed head of the Department of Government Efficiency (DOGE). In this role, he is focused on cutting government jobs, reducing spending, and rolling back regulations – policies that could benefit his business empire.

X Becomes the Hub for Trump’s Administration

With Trump back in the White House and Musk now holding a key government position, X has become the main platform for updates on the administration. Musk has also been using X to share details about his work at the Department of Government Efficiency, further increasing the platform’s political influence.

As Musk continues to merge his business and political interests, this latest acquisition signals a future where AI and social media are more connected than ever.

Love him or hate him, Musk is proving once again that when he makes a move, the entire world takes notice.