Elon Musk says xAI startup is buying X platform

(Patria) - Elon Musk said on Friday that his artificial intelligence (AI) startup xAI is buying his social network X in a deal that values the company formerly known as Twitter at $33 billion, AFP reported last night.

"This combination will unlock immense potential by merging xAI's advanced AI capabilities and expertise with X's vast reach," Musk said in a post on his social network.

X has more than 600 million users, and its future is "intertwined" with that of xAI, launched two years ago, Musk states.

"Today, we have officially taken the step to combine data, models, compute, distribution, and talent," Musk said about the combination of the two companies. "This will allow us to build a platform that not only reflects the world but actively accelerates human progress."

The companies are being united in an all-stock deal that values xAI at $80 billion and X at $33 billion, taking into account the social network's $12 billion debt.

Musk bought Twitter for $44 billion in late 2022, along with its debt, and launched xAI the following year, spending billions of dollars on top-tier Nvidia chips for the venture.

xAI released the latest version of its chatbot, Grok 3, in February, which the billionaire hopes will survive in a highly competitive sector alongside rivals like ChatGPT and China's DeepSeek.

Musk has promoted Grok 3 as "terrifyingly smart," with ten times the computing resources of its predecessor released in August last year.

Grok 3 also competes with OpenAI's chatbot, Sam Altman's ChatGPT.

Musk and Altman were among the team of eleven people who founded OpenAI in 2015. Created as a counterweight to Google's dominance in artificial intelligence, the project received initial funding from Musk. Musk left three years later, and then in 2022, OpenAI's release of ChatGPT created a global tech sensation, making Altman a global tech star. The relationship between Musk and Altman has deteriorated since then.

The owner of X is the main financial supporter of US President Donald Trump and heads the Government Efficiency Department, which is reducing the ranks of civil servants.

Industry analysts at Emarketer predict this week that ad revenue on X will grow this year as brands fear retaliation from the politically connected Musk.

"Many advertisers may view spending on X as a cost of doing business to mitigate potential legal or financial consequences," says Jasmine Enberg, an Emarketer analyst.