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    Home»Technology»Elon Musk consolidates power as xAI swallows X
    Technology

    Elon Musk consolidates power as xAI swallows X

    Chris AnuBy Chris AnuMarch 30, 2025No Comments4 Mins Read
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    Elon Musk consolidates power as xAI swallows X
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    Elon Musk. Image: TED Conference

    Elon Musk’s xAI has acquired X in a deal that values the social media platform at US$33-billion and allows the value of his artificial intelligence firm to be shared with his co-investors in the company formerly known as Twitter.

    The deal could also help xAI’s ability to train its chatbot known as Grok.

    “xAI and X’s futures are intertwined,” Musk, who also heads car maker Tesla and rocket company SpaceX, wrote in a post on X. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”

    Today, we officially take the step to combine the data, models, compute, distribution and talent

    He said the combination values xAI at $80-billion and X at $33-billion, or $45-billion less $12-billion in debt.

    Representatives for X and xAI did not immediately respond to requests for comment. Much of the deal’s specifics remain unclear, such as how X’s leaders would be integrated in the new firm or whether there would be regulatory scrutiny. Musk, the world’s wealthiest man, is also a close ally of US President Donald Trump and heads the department of government efficiency.

    Saudi Arabian investor Prince Alwaleed bin Talal, who owns the investment company Kingdom Holding, said he had requested the development. He noted his companies are the second largest investors in X and xAI. “After this deal, the value of our investments is expected to reach between $4-billion and $5-billion … and the meter is running,” he said in a post on X.

    Price tag

    DA Davidson analyst Gil Luria said the price tag for X of $45-billion when debt was included was not a coincidence. “It is $1-billion higher than the take-private transaction for Twitter in 2022.”

    An investor in xAI who declined to be identified said they were not surprised by the deal, viewing it as Musk consolidating his leadership and management at his own companies. Musk did not ask investors for approval but told them that the two companies had been collaborating closely and the deal would drive deeper integration with Grok, the investor said.

    Read: How DDoS attackers took down Elon Musk’s X

    Musk’s xAI start-up was launched less than two years ago and recently raised $10-billion in a funding round that valued the company at $75-billion, according to a media report. It competes with the likes of Microsoft-backed OpenAI and Chinese start-up DeepSeek.

    In February, Musk, 53, made a $97.4-billion bid with a consortium for OpenAI, which was rejected and he has sued to prevent the ChatGPT maker from converting from a non-profit to a for-profit business. A judge this month denied Musk’s request for a preliminary injunction that would prevent the changeover.

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

    xAI introduced Grok-3, the latest iteration of its chatbot, in February.

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

    After buying Twitter, Musk gutted the company’s workforce, prompting advertisers to flee the platform. Recently, brands have been returning to X as Musk’s influence in the Trump administration grows.

    A US judge rejected a bid by Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders

    The seven banks that extended $13-billion in loans to Musk to buy X kept the debt on their books for two years until they were able to sell it all at once last month, according to a source familiar with the transactions.

    This was made possible after a surge in investor interest for exposure to AI companies along with X’s improved operating performance over the previous two quarters, among other factors, according to two people familiar with the matter.

    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.”

    Read: Tesla sales plunge in Europe amid anti-Musk backlash

    Separately, a US judge on Friday rejected a bid by Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders by waiting too long to disclose his initial investment in the company.  — Greg Bensinger, with Krystal Hu, Tatiana Bautzer, Seher Dareen, Jaspreet Singh, Juby Babu and Jaidaa Taha, (c) 2025 Reuters

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