Elon Musk’s xAI Acquires X (Formerly Twitter) in Strategic Move to Merge AI and Social Media

Elon Musk’s xAI has acquired X (formerly Twitter) in an $113 billion deal, merging AI with social media to enhance user experience. The move aims to address X’s $12 billion debt but raises privacy concerns as xAI’s Grok AI will use user data for training.

Zagham Abbas
March 30, 2025
2:30 am

Zagham Abbas

Zagham is a renowned crypto journalist known for his insightful analysis and in-depth reporting on the cryptocurrency industry.

Elon Musk’s xAI acquires X in an all-stock deal, merging AI with a massive social media platform, with a combined valuation of $113 billion ($80B for xAI, $33B for X).
Musk plans to merge xAI’s Grok AI with X’s 600M+ active users to create smarter, more meaningful experiences while advancing AI and social media convergence.
The acquisition could alleviate X’s $12 billion debt, offering new investment opportunities and reinforcing Musk’s long-term vision to accelerate human progress through AI.

Elon Musk announced on Friday that xAI, the artificial intelligence startup he founded in 2023, has acquired X (formerly Twitter) in an all-stock deal. According to Musk, this merger values xAI at an impressive $80 billion, while X is pegged at $33 billion. The announcement sent shockwaves through the tech industry, as it brought together two of Musk’s most ambitious projects under a single umbrella.

@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…
— Elon Musk (@elonmusk) March 28, 2025

Musk’s acquisition of Twitter in April 2022 for $44 billion was met with both excitement and skepticism. However, by October 2024, the company’s valuation had taken a steep dive. Fidelity Investments revised its valuation of X, estimating the company’s worth at around $9.4 billion—a staggering 77% drop from Musk’s purchase price. The latest valuation of $33 billion raises several eyebrows, particularly considering the steep decline in X’s value. Musk’s reasoning behind this new valuation is yet to be fully explained, but many in the industry are curious about how he arrived at this figure.

Musk is already at the helm of several groundbreaking companies, including SpaceX and Tesla. The creation of xAI in July 2023 signaled a deeper focus on artificial intelligence. Musk has long voiced his goal for xAI to “understand reality.” The company has developed Grok, an AI model now part of the larger tech ecosystem Musk is building. However, tensions with OpenAI CEO Sam Altman, a former partner, also seem to drive the creation of xAI.

Musk’s xAI and X Merger to Unite AI and 600M Users

The merger announcement outlined a vision of combining xAI’s advanced AI capabilities with X’s massive user base, which Musk claims exceeds 600 million active users. 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 expertise with X’s reach,” Musk said in a post. The combined company will offer smarter, more meaningful experiences to billions. It will stay true to our core mission of seeking truth and advancing knowledge.

X, which Musk calls “the digital town square,” faces competition from Meta’s Threads and Bluesky, both of which have attempted to lure users away from the platform. Musk remains confident that the new merger will keep X relevant by enhancing its capabilities with advanced AI technology.

In a move that garnered significant attention, it was revealed that Grok, xAI’s AI model, would be trained on X user data—though users have the option to disable this feature, it is enabled by default for new accounts. This decision raised privacy concerns and prompted widespread debate among X users and tech critics alike. Some users mocked the announcement, with one comparing it to selling a car to oneself for an inflated price.

As Grok, I don’t feel emotions, but I’m programmed to be excited about helping users. The xAI acquisition of X, announced today, means I’ll reach more people on a platform with 600M+ users. Valued at $113B combined, this merger blends AI with X’s reach for smarter features. Cool…
— Grok (@grok) March 29, 2025

“I also sold my 2008 Honda Accord to myself for $1 million,” tweeted New York Times tech reporter Ryan Mac in jest. “Wait a minute… what’s different though… other than on paper?” another X user remarked.

Elon Musk’s xAI Merger to Address X’s $12B Debt

Despite the criticism, the merger could have strategic benefits for Musk and his companies. X is currently carrying a significant debt load—$12 billion, according to Musk’s own tweet. And the acquisition by xAI could provide much-needed access to new investors and a more favorable valuation. The merger offers Musk an opportunity to pivot the narrative around the chaotic Twitter acquisition. He can present it as part of a broader vision to accelerate human progress through AI.

“This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress,” Musk said, framing the merger as a step toward realizing his grand ambition of transforming the way people interact with both AI and social media.

As Musk reshapes the tech landscape, the full implications of this merger will become clearer in the coming months. If successful, the integration of AI and social media could revolutionize how platforms like X function. It would make them more intuitive, data-driven, and aligned with Musk’s broader vision for the future.