Elon Musk has sold X (formerly Twitter) to his artificial intelligence company, xAI, in a deal that values the social media platform at $33 billion.
He disclosed this in a post on X on Saturday.
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With the deal, Mr Musk has officially merged X, the platform he acquired in 2022, with his artificial intelligence company to form a single entity.
The merger will allow xAI to use X’s real-time data to improve its AI models.
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X, in return, will benefit from more advanced AI features to enhance user experience.
In his post, Mr Musk said, “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
“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,” he wrote.
The business magnate said xAI is now valued at $80 billion. X, on the other hand, is valued at $33 billion after subtracting its $12 billion debt from its previous $45 billion price tag.
The $12 billion debt comes from the loans Mr Musk took out to finance the acquisition of the social media platform in October 2022.
Mr Musk said together, both companies are valued at $80 billion.
“xAI and X’s futures are intertwined,” he said. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
He said the merger will help build a platform that “doesn’t just reflect the world but actively accelerates human progress.”
Mr Musk, however, did not state how the deal would affect the leadership and workforce of both companies.
The AI race
In recent years, artificial intelligence (AI) has become one of the most competitive industries, with companies rushing to develop the most advanced technology.
As the AI race intensifies, Mr Musk seeks to centralise control over AI and data in his companies.
With the merger of X and xAI, Mr Musk is creating a closed ecosystem where he owns both the AI company and the data source (X) and can compete with major AI firms such as OpenAI and Chinese AI.
These firms rely on external partnerships for data sources.
Earlier in the year, Mr Musk had offered to buy OpenAI, the company behind ChatGPT, for $97.4 billion. However, the bid was turned down, with OpenAI stating that it was not on the market.
Mr Musk originally co-founded OpenAI in 2015 alongside its current CEO, Sam Altman, but left in 2018 due to disagreements over its direction.
Following this, OpenAI transitioned from a non-profit to a hybrid model and partnered with Microsoft, securing a billion dollars in funding.
The CEO of Tesla and X social media has, however, criticised the firm for straying from its founding mission.
He also sued the firm in federal court in California earlier in March to prevent its conversion to a for-profit business, but the judge denied his request for a preliminary injunction to prevent the changeover.
Meanwhile, with xAI, Mr Musk is ramping up his efforts to compete by building a massive supercomputer, colossus, and releasing a chatbot, Grok-3.
Grok-3 currently uses X to both distribute its AI products and collect data that could enhance future AI models.
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