The post Elon Musk’s xAI Acquires X for $33 Billion, Shaking Up the Tech World appeared first on Coinpedia Fintech News
In a surprising move, Elon Musk’s xAI startup has just acquired the platform X, formerly known as Twitter, at a jaw-dropping $33 billion valuation – shaking up the tech world once again.
The billionaire in an X post that the total value of his xAI company is now $80 billion, and the social media platform X (formerly Twitter) is valued at $33 billion. He noted that the value of X is $45 billion when including $12 billion of debt. Musk also mentioned that the purchase of X by xAI was done through an all-stock transaction.
XAI Holdings, the newly formed company, is valued at over $100 billion, excluding debt. Morgan Stanley served as the sole banker for the deal, representing both sides. Elon Musk shared that the futures of XAI and X are now closely linked. By combining xAI’s cutting-edge AI technology with X’s vast audience and resources, he believes that this move will unlock huge potential for both companies.
A Stock Swap
Since Musk owns both X and xAI, the deal is likely a stock swap, with X investors getting xAI shares. Both the companies have mutual investors including venture firms like Andreessen Horowitz, Sequoia Capital, Fidelity, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.
Linda Yaccarino, who Musk hired as CEO of X, wrote in a post after Friday’s announcement, “The future could not be brighter.” “The move appears sensible, considering the current trend of increased investments in AI, data centres, and computing,” said analyst Paolo Pescatore, founder of PP Foresight.
Elon Musk’s AI startup, xAI, founded in 2023, recently secured $6 billion in funding, bringing its valuation to $40 billion. Musk bought Twitter for $44 billion in 2022, cutting costs and pushing for less content moderation. This led to a significant drop in advertising revenue. Meanwhile, Musk’s xAI startup, which competes with OpenAI, has been promoting its chatbot, Grok, using data from X users.
Musk Leading Tech and Government Reform
Alongside leading Tesla, SpaceX, xAI, and overseeing X, Elon Musk has spent a lot of time in Washington, D.C., becoming a key figure in Donald Trump’s second administration. After donating nearly $300 million to Trump and other Republican causes for the 2024 campaign, Musk was appointed head of the Department of Government Efficiency (DOGE), where he’s focused on cutting government jobs, reducing spending, and rolling back regulations. This position gives Musk the power to make changes that could benefit his business empire.
With Trump back in office and Musk now in the executive branch, X has become the go-to platform for staying updated on the Trump administration. Musk is also using X to share updates on his work with the Department of Government Efficiency.