So, xAI just bought X in a $33B deal…
Elon Musk has made headlines once again with a major business move, as his AI startup xAI has acquired the social media platform X in an all-stock transaction. Announced on March 28, 2025, by CNBC Tech, the deal values xAI at $80 billion and X at $33 billion, accounting for $45 billion minus $12 billion in debt. Musk, who owns both companies, shared the news on X, stating, “xAI and X’s futures are intertwined,” emphasizing the merger’s potential to combine xAI’s advanced AI capabilities with X’s massive user reach.
The narrative of this acquisition is a strategic consolidation of Musk’s ventures, blending AI innovation with social media influence. Musk likened the deal to a juice company (xAI) buying the orange farm (X) it sources from, a metaphor for leveraging X’s data and distribution to fuel xAI’s AI development, particularly for its Grok chatbot, which is already integrated into X. The merger aims to unlock new possibilities by merging xAI’s tech expertise with X’s platform, which Musk acquired for $44 billion in 2022 before rebranding it from Twitter. This move follows a pattern for Musk, who previously merged Tesla with SolarCity in 2016, a deal that faced scrutiny but ultimately stood.
Market performance for both entities reflects their high stakes. xAI, launched less than two years ago, was valued at $50 billion in a 2024 funding round, with Bloomberg reporting talks of a $75 billion valuation last month. X, despite its $33 billion valuation in this deal, has faced challenges since Musk’s 2022 acquisition, including debt restructuring and a turbulent transition under CEO Linda Yaccarino, who called the merger’s future “brighter” in a post. The deal’s structure, likely a stock swap, benefits mutual investors like Andreessen Horowitz and Sequoia Capital, who hold stakes in both companies.
This buy comes on the heels of Musk’s enhanced role, including in Trump’s administration under the Department of Government Efficiency (DOGE), where he’s pushing deregulation that can benefit his businesses. With persistent environmental issues over xAI’s Memphis supercomputer complex, Colossus, the merger positions Musk to integrate more AI into social media, potentially transforming the way X and other platforms operate and interact with users. X’s $33 billion valuation and xAI’s $80 billion price tag for the time being are an ambitious step in Musk’s consolidation of his tech empires.
