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Elon Musk’s artificial intelligence group Xai bought the social media platform X for $45 billion as the billionaire entrepreneur gathers two of his flagship businesses.
“The futures of Xai and X are intertwined,” Musk said Friday evening, adding that it will combine data, models, computing power, distribution and talent from both companies.
Musk said the all-share trading valued Xai at $800 billion. He did not give details on how the deal was structured. Xai was valued at $45 billion in a $5 billion private funding round at the end of last year.
The deal was announced on Friday. This includes $12 billion in debt. That’s slightly above the $44 billion price that Musk paid to make the company private in October 2022, slightly above the price he paid X after a $1 billion fundraiser this month.
It highlights the rebound of X’s fate. This fell following the acquisition of Musk as advertisers elicited spending from the platform, citing concerns about a handoff approach to moderation.
A group of seven banks on Wall Street sold almost all of the $12.5 billion loan masks that were used in 2022 to fund the acquisition of Twitter, which he later renamed X.
Lenders were plagued by debt, but Musk tried to turn X’s business around as stock investors relicated shares on the platform with dramatic discounts.
Investor interest in loans improved in the weeks that won the election for Donald Trump in November. It has improved given the billionaire’s proximity to the new administration as the president’s confidence and the government’s efficiency director, which aims to cut the government’s deficit.
X’s investors include Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital and Fidelity Investments. Sequoia, Andreessen Horowitz and Fidelity are also Xai investors.
Last year, Musk supported investors to buy Twitter, backed 25% of Xai’s shares, helping to increase the value of its social media platform. It was unclear how this setup would be considered for Friday’s deal.
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Musk launched the startup Xai in 2023 to “understand the essence of the universe” and challenged Sam Altman’s open rule. Since then, they have launched their own chatbot, Grok, and have increased datacenter expansion with their Colossus SuperComputer cluster.
“This combination unlocks immense possibilities by blending Xai’s advanced AI capabilities and expertise with X’s big reach,” Musk said of the X partnership on Friday. “This allows us to build a platform that not only reflects the world, but also actively accelerates human progress.”
Already, according to Musk, X’s data, which said it had over 600 million active users, is being used to train Grok. Second, a more refined GROK feature is offered to pay X’s premium subscribers.
