Elon Musk’s xAI buys Twitter (X) for $33 billion, less than initial purchase price

Source Cryptopolitan

Elon Musk has merged xAI, his artificial intelligence startup, with his social media company X, in an all-stock deal that values X at $33 billion, nearly $11 billion less than what he paid to buy Twitter in late 2022. The transaction was announced on Friday, and Elon posted on X that the two companies’ futures are now “intertwined.”

The value of xAI in the deal was set at $80 billion, and both companies are now under the same structure. The move combines the infrastructure, user data, compute power, and software teams behind each business.

“Today, we officially take the step to combine the data, models, compute, distribution and talent,” Elon wrote on Friday.

“X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.”

Musk connects X and xAI to expand control

The merger brings together two private companies that were already overlapping. Elon said the combination would “unlock immense potential” by joining xAI’s advanced AI capability with X’s massive reach. The two were already linked through Grok, the chatbot developed by xAI that’s available inside X.

Elon bought Twitter for $44 billion at the end of 2022, after months of legal threats, court battles, and chaotic filings. He cut staff aggressively, scrapped content moderation systems, killed ad partnerships, and renamed the company X. He later brought in Linda Yaccarino, formerly an ad exec, as CEO. On Friday, Linda posted, “The future could not be brighter.”

xAI was launched less than two years ago with a goal to “understand the true nature of the universe.” But the company’s real function has been trying to compete with OpenAI, the company Elon helped co-found in 2015. He left OpenAI after disagreements over its direction, and since then, has taken aim at CEO Sam Altman both online and in court.

Grok, Colossus, and government power moves

Since its launch, xAI has focused on large language models and generative AI tools. It has been positioning itself as a rival to OpenAI, Google, Microsoft, Meta, and other companies with billion-dollar AI divisions. Grok, the chatbot Elon launched inside X, was developed by xAI and built using real-time access to X’s user data.

Last year, xAI was valued at around $50 billion during a funding round. In early 2025, Bloomberg reported that the company was trying to raise money at a $75 billion valuation. For comparison, OpenAI was near closing a raise that would push its value to $260 billion, and rival Anthropic was just valued at $61.5 billion.

While running Tesla, SpaceX, xAI, and X, Elon has also taken up a new job in Washington with D.O.G.E after donating $270 million to Donald Trump and Republican campaigns during the 2024 election.

This isn’t the first time Elon has merged two of his own companies. In 2016, Tesla acquired SolarCity, a solar company founded by his cousins Lyndon and Peter Rive, in a $2.6 billion deal. At the time, Elon was chairman of the board at both companies. Shareholders sued, accusing him of using Tesla’s money to save a failing company he was personally tied to.

The case dragged on for years, with accusations that the SolarCity deal violated fiduciary duty and benefited Elon more than Tesla shareholders. But a Delaware court ruled in favor of Elon and let the deal go through without requiring him to pay anything back to Tesla.

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