{"id":22561,"date":"2025-03-31T12:25:29","date_gmt":"2025-03-31T09:25:29","guid":{"rendered":"https:\/\/forklog.com\/en\/musks-xai-buys-his-own-social-network-x-why\/"},"modified":"2025-03-31T12:25:29","modified_gmt":"2025-03-31T09:25:29","slug":"musks-xai-buys-his-own-social-network-x-why","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/musks-xai-buys-his-own-social-network-x-why\/","title":{"rendered":"Musk\u2019s xAI buys his own social network X. Why?"},"content":{"rendered":"<p>Elon Musk\u2019s AI startup xAI has acquired his other company, X, in an all-stock deal. He said the transaction values xAI at $80 billion and X at $33 billion ($45 billion less $12 billion of debt).<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\"><a href=\"https:\/\/twitter.com\/xai?ref_src=twsrc%5Etfw\">@xAI<\/a> has acquired <a href=\"https:\/\/twitter.com\/X?ref_src=twsrc%5Etfw\">@X<\/a> in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt). <\/p>\n<p>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\u2026<\/p>\n<p>\u2014 Elon Musk (@elonmusk) <a href=\"https:\/\/twitter.com\/elonmusk\/status\/1905731750275510312?ref_src=twsrc%5Etfw\">March 28, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The billionaire highlighted his firms\u2019 progress:<\/p>\n<ul class=\"wp-block-list\">\n<li>xAI \u201chas rapidly become one of the leading AI labs\u201d;<\/li>\n<li>X is a \u201cdigital town square\u201d with 600 million active users.<\/li>\n<\/ul>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cThe futures of xAI and X are intertwined. Today we are officially taking a step toward unifying data, models, compute, distribution and talent. This union will unlock enormous potential by combining xAI\u2019s cutting-edge capabilities and expertise in artificial intelligence with X\u2019s vast reach,\u201d Musk stressed.<\/p>\n<\/blockquote>\n<p>As both companies are private, the deal is likely an exchange of shares in which X investors receive a stake in xAI, <a href=\"https:\/\/www.cnbc.com\/2025\/03\/28\/elon-musk-says-xai-has-acquired-x-in-deal-that-values-social-media-site-at-33-billion.html\">CNBC<\/a> wrote.<\/p>\n<p>According to <a href=\"https:\/\/www.wsj.com\/tech\/musk-merges-his-ai-company-with-x-claiming-combined-valuation-of-113-billion-4a8f2263\">The Wall Street Journal<\/a>, the deal entails swapping X and xAI shares for equity in a new holding company called xAI Holdings Corp. Executives of both firms believe the step will make it easier to raise money for the combined venture.<\/p>\n<p>The combined company is worth more than $100 billion excluding debt, noted <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-03-31\/musk-s-xai-deal-offers-an-unexpected-win-for-x-investors?srnd=phx-ai\">Bloomberg<\/a>.<\/p>\n<p>Online, jokes proliferated about selling companies to oneself. Prediction market Polymarket quipped that even it could not have predicted such a move.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Congratulations to <a href=\"https:\/\/twitter.com\/elonmusk?ref_src=twsrc%5Etfw\">@elonmusk<\/a> on xAI&#8217;s acquisition of X. <\/p>\n<p>Not even we could have predicted this! <a href=\"https:\/\/t.co\/6d0ao7h3ci\">pic.twitter.com\/6d0ao7h3ci<\/a><\/p>\n<p>\u2014 Polymarket (@Polymarket) <a href=\"https:\/\/twitter.com\/Polymarket\/status\/1905738829761540123?ref_src=twsrc%5Etfw\">March 28, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>In 2022 Musk bought Twitter for $44 billion and later rebranded it as X. He launched xAI in 2023 with the goal \u201cto understand the true nature of the universe.\u201d The startup aims to compete with OpenAI, which the billionaire co-founded in 2015 as a non-profit, but he later left over disagreements about its direction.<\/p>\n<p>Sam Altman\u2019s firm is <a href=\"https:\/\/forklog.com\/en\/news\/openai-explores-corporate-restructuring-with-regulators\">in talks<\/a> with the California attorney general\u2019s office about changing its corporate structure to a for-profit entity.<\/p>\n<p>In August 2024, Musk <a href=\"https:\/\/forklog.com\/en\/news\/elon-musk-renews-legal-battle-against-openai\">revived a lawsuit<\/a> against OpenAI. The complaint alleges that the AI startup and two of its founders\u2014Altman and Greg Brockman\u2014violated the company\u2019s founding agreement by putting commercial interests above the public good.<\/p>\n<p>xAI and X have already worked together\u2014the <a href=\"https:\/\/forklog.com\/en\/news\/elon-musks-xai-unveils-smartest-grok-3-ai-model\">Grok<\/a> chatbot is integrated into the social network. In July 2024 the platform automatically <a href=\"https:\/\/forklog.com\/en\/news\/x-enables-user-data-sharing-for-grok-ai-training-offers-opt-out\">enabled<\/a> AI training on user data.<\/p>\n<h2 class=\"wp-block-heading\"><strong>Why the deal?<\/strong><\/h2>\n<p><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-03-31\/musk-s-xai-deal-offers-an-unexpected-win-for-x-investors?srnd=phx-ai\">Bloomberg<\/a> noted the benefits of combining X and xAI:<\/p>\n<ul class=\"wp-block-list\">\n<li>xAI would gain full control over X\u2019s data\u2014billions of user posts. The company could refuse to license them to AI rivals; <\/li>\n<li>X would help xAI distribute the Grok chatbot and other products to its users.<\/li>\n<\/ul>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">We\u2019re investors in xAI and X, and this combo makes a lot of sense.<\/p>\n<p>Grok brings the brains. X brings the distribution (600M MAUs) and a unique data asset.<\/p>\n<p>OpenAI has the brains and brand distribution (e.g., Apple), but lacks X\u2019s proprietary data.<\/p>\n<p>Long-term edge: xAI. <a href=\"https:\/\/t.co\/EpZvQC76OB\">https:\/\/t.co\/EpZvQC76OB<\/a><\/p>\n<p>\u2014 Gene Munster (@munster_gene) <a href=\"https:\/\/twitter.com\/munster_gene\/status\/1905742347608215635?ref_src=twsrc%5Etfw\">March 28, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cWe are investors in xAI and X, and this combination makes a lot of sense. Grok offers the brains. X the distribution (600 million users) and a unique data asset. OpenAI has the brains and brand distribution (e.g., Apple), but lacks X\u2019s proprietary data. Long-term edge: xAI,\u201d said Gene Munster, managing partner at Deepwater Asset Management.<\/p>\n<\/blockquote>\n<p>Another advantage is the ability to assign \u201cany\u201d valuation to X and xAI, provided investors do not object. Earlier the AI startup <a href=\"https:\/\/forklog.com\/en\/news\/elon-musks-xai-secures-6-billion-in-funding\">raised<\/a> $6 billion at a $50 billion valuation. The new deal involves no fresh capital, yet the valuation has risen.<\/p>\n<p>New York Times reporter Ryan Mac mocked the figures:<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cI also sold my 2008 Honda Accord for $1 million,\u201d \u2014 <a href=\"https:\/\/bsky.app\/profile\/rmac.bsky.social\/post\/3llhsjtm5q22j\">wrote<\/a> he.<\/p>\n<\/blockquote>\n<p>X was valued at the same price Musk paid for the social network. Previously its value had fallen to as low as $9.4 billion, according to <a href=\"https:\/\/www.forbes.com\/sites\/tylerroush\/2024\/09\/30\/elon-musks-x-is-now-worth-around-a-fifth-of-the-44-billion-he-paid-for-it-fidelity-says\/?utm_source=chatgpt.com\">Fidelity<\/a>.<\/p>\n<p>D.A. Davidson analyst Gil Luria <a href=\"https:\/\/www.reuters.com\/markets\/deals\/musks-xai-buys-social-media-platform-x-45-billion-2025-03-28\/\">says<\/a> the $45 billion price for X including debt is no accident. It is $1 billion more than the 2022 Twitter acquisition price.<\/p>\n<p>One xAI investor said he views the deal as Musk consolidating his leadership across his companies. According to him, the billionaire did not seek permission from other shareholders.<\/p>\n<h2 class=\"wp-block-heading\"><strong>A precedent<\/strong><\/h2>\n<p>AI developers may follow Musk\u2019s lead and look to acquire social networks to obtain datasets needed to train AI.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cWe believe that smaller players in social media will actively seek alliances with large-language-model providers, given xAI\u2019s premium $80 billion valuation, which exceeds the combined market value of Snap, Pinterest and Reddit,\u201d noted Bloomberg Intelligence analyst Mandeep Singh.<\/p>\n<\/blockquote>\n<p>In January the startup Perplexity AI <a href=\"https:\/\/forklog.com\/en\/news\/reports-perplexity-ai-proposes-merger-with-tiktok-u-s\">said<\/a> it intended to acquire the U.S. TikTok.<\/p>\n<p>In July 2024, Musk <a href=\"https:\/\/forklog.com\/en\/news\/elon-musk-proposes-5-billion-investment-in-xai-from-tesla\">posted<\/a> a poll on X proposing that Tesla invest $5 billion in his AI startup xAI at a valuation set by reliable, independent investors.<\/p>\n<p>Earlier, Tesla shareholders <a href=\"https:\/\/forklog.com\/en\/news\/tesla-shareholders-sue-musk-over-xai-venture\">sued<\/a> the CEO and the board over the billionaire\u2019s decision to found xAI.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Elon Musk\u2019s AI startup xAI has acquired his other company, X, in an all-stock deal. He said the transaction values xAI at $80 billion and X at $33 billion ($45 billion less $12 billion of debt). @xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":22560,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[438,1217,1493,1150,40],"class_list":["post-22561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-artificial-intelligence","tag-elon-musk","tag-explainable-ai","tag-news-plus","tag-twitter"],"aioseo_notices":[],"amp_enabled":true,"views":"67","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/22561","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=22561"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/22561\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/22560"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=22561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=22561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=22561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}