Elon Musk claims that the future of xAI, which was introduced two years ago, is “intertwined” with that of X, which has more than 600 million users.
Elon Musk said on Friday that his social networking site X, formerly known as Twitter, is being acquired by his artificial intelligence venture xAI for $33 billion. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk wrote in a social media post.
With over 600 million users, Musk claims that X’s future is “intertwined” with that of xAI, which was introduced two years ago.
Musk declared, “Today, we officially take the step to combine the data, models, compute, distribution, and talent,” in reference to merging the two businesses. “This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
After accounting for the social network’s $12 billion debt, the businesses are being merged in an all-stock deal that values xAI at $80 billion and X at $33 billion.
Musk started xAI the following year, spending billions of dollars on top-tier Nvidia chips for the business, after purchasing Twitter for $44 billion in late 2022, including debt.
The billionaire expects that xAI’s most recent chatbot, Grok 3, which was debuted in February, would gain popularity in a very competitive market that is fought by companies like China’s DeepSeek and ChatGPT.
Grok 3, which Musk has marketed as “scary smart,” has ten times the processing power of its predecessor, which was unveiled in August of last year. Additionally, Musk will go off against Sam Altman, a former partner who is now an arch foe, in Grok 3 versus OpenAI’s chatbot, ChatGPT.The billionaire expects that xAI’s most recent chatbot, Grok 3, which was debuted in February, would gain popularity in a very competitive market that is fought by companies like China’s DeepSeek and ChatGPT.
Grok 3, which Musk has marketed as “scary smart,” has ten times the processing power of its predecessor, which was unveiled in August of last year. Additionally, Musk will go off against Sam Altman, a former partner who is now an arch foe, in Grok 3 versus OpenAI’s chatbot, ChatGPT.
In 2015, an 11-person team led by Musk and Altman created OpenAI. Musk provided the first funding for the project, which was developed as a counterbalance to Google’s hegemony in artificial intelligence.
Three years after Musk’s departure, Altman became a household name in the tech industry when OpenAI’s ChatGPT launch in 2022 became a worldwide technology sensation. Since then, their relationship has grown more poisonous and contentious.v
The richest person in the world, X’s billionaire owner, oversees a Department of Government Efficiency that has been reducing the number of government workers and is a significant financial supporter of US President Donald Trump.
Ad revenue at X is expected to increase this year, according to industry analysts at Emarketer, since businesses are afraid of reprisals from politically connected Musk if they don’t invest money on the site.
According to Jasmine Enberg, chief analyst at Emarketer, “many advertisers may consider spending on X as a cost of doing business in order to mitigate potential legal or financial repercussions.”
