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XAI's Grok chatbot is already integrated into X
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Elon Musk's artificial intelligence company xAI has acquired his social media platform X in an all-stock transaction.
The deal values xAI at $80 billion and X at $33 billion, according to an announcement Musk made on X on Friday.
"xAI and X's futures are intertwined," Musk wrote in his post, confirming the merger of two of his most high-profile companies.
The transaction combines X with Musk's AI startup launched in 2023.
Elon Musk claims 'xAI and X's futures are intertwined'
REUTERS
The specifics of the deal remain largely undisclosed as both companies are privately held.
They share several major investors, including venture firms Andreessen Horowitz and Sequoia Capital, as well as Fidelity Management.
Linda Yaccarino, CEO of X, reposted Musk's announcement, adding: "The future could not be brighter."
Musk stated the merger would "unlock immense potential by blending xAI's advanced AI capability and expertise with X's massive reach".
"Today, we officially take the step to combine the data, models, compute, distribution and talent," he wrote on the platform.
He added that the "combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge".
LATEST DEVELOPMENTS:
Elon Musk confirmed the merger on X
REUTERS
Musk purchased Twitter for $44billion in 2022, later renaming it to X.
Following the acquisition, he implemented significant staff cuts and changed content moderation policies.
XAI was launched by Musk in 2023 with the stated goal to "understand the true nature of the universe".
The AI startup has been developing large language models to compete directly with OpenAI, which Musk co-founded in 2015 before later leaving.
XAI's Grok chatbot is already integrated into X, with many users asking it to respond to posts and weigh in on arguments.
The AI company has used data from social media posts on X to train its models, making Grok a prominent feature on the platform.
@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).
— Elon Musk (@elonmusk) March 28, 2025
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…
In June, xAI announced plans to build a supercomputer in Memphis, Tennessee, to train Grok.
Part of this supercomputer, known as Colossus, is already online, according to Musk.
The merger comes amid an intensifying competition in the AI space, with major investments flowing into the sector.
XAI was valued at around $50billion in a previous funding round, with reports last month suggesting it was in talks to raise funds at a $75billion valuation.
This compares to OpenAI's reported valuation of $260billion and Anthropic's $61.5billion.
"The move appears sensible, considering the current trend of increased investments in AI, data centres, and computing," said analyst Paolo Pescatore.
The merger raises questions about what changes users of X might experience following the acquisition.
Environmental advocates have expressed concerns about xAI's rapid development in Memphis, citing a lack of community input and oversight.
This isn't Musk's first merger of his companies. In 2016, Tesla acquired SolarCity for $2.6billion, a deal that later faced legal challenges from shareholders.
Musk currently serves as head of the Department of Government Efficiency in the Trump administration.