Entrepreneur Elon Musk has announced the merger of his artificial intelligence startup, xAI, with his social media platform, X, in an all-stock transaction valued at $33 billion.
This merger brings xAI’s valuation to $80 billion, while X is valued at $33 billion.
Both xAI and X are privately held entities under Musk’s control.
The two companies share notable investors, including Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.
Founded less than two years ago, xAI aims to “understand the true nature of the universe.” The company has been developing large language models and AI tools, positioning itself as a direct competitor to OpenAI, a company Musk co-founded in 2015 before exiting due to strategic differences.
In June 2024, xAI announced plans to build a supercomputer in Memphis, Tennessee, to train its AI chatbot, Grok. By September, Musk revealed that part of the Memphis-based supercomputer, called Colossus, was already online.
xAI’s rapid expansion has drawn scrutiny from environmental and public health advocates, who cite a lack of community input in its Memphis project. The Colossus supercomputer is powered by natural gas-burning turbines, and xAI plans to expand operations with a nearby graywater facility.
Musk, in a post on X, stated that the merger would combine their data, computing power, distribution, and talent to create more advanced AI-driven experiences while staying committed to their core mission of truth and knowledge advancement.
“@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).
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 unprecedented speed and scale.
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.
xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. 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. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.
I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning,” he stated.
ALSO READ TOP STORIES FROM VERILY NEWS
