Musk's AI firm just acquired X—Musk's social media company—for $33B
What's the story
Elon Musk's artificial intelligence company, xAI, has acquired X, the social media platform owned by the tech billionaire himself.
Musk confirmed the acquisition in a post on X, which was formerly known as Twitter.
The deal was executed as an all-stock transaction and values xAI at a whopping $80 billion and X at $33 billion after accounting for its $12B debt.
Since this is a stock deal, X's shareholders will receive equity in xAI rather than cash.
Strategic merger
xAI and X's future intertwined, says Musk
Musk said in his post that "xAI and X's futures are intertwined."
He further elaborated that the merger will enable them to use X's vast reach as a social platform to promote "xAI's advanced AI capability."
The companies plan to combine their resources - data, models, compute, distribution and talent - for this purpose.
AI expansion
xAI's rapid growth and strategic fundraising efforts
Since its inception two years ago, xAI has quickly become one of the world's leading AI labs. The company has been building models and data centers at an impressive pace.
Like many other top AI firms, xAI has also been raising funds aggressively to support its growth and expansion efforts.
Historical precedent
Musk's acquisition strategy: A look at the past
The acquisition of X by xAI isn't Musk's first attempt at merging companies.
Back in 2016, he had enabled a similar merger between Tesla and SolarCity for $2.6 billion.
Not only does this strategic move cut down some of the debt Musk took on when he made Twitter private, but it also falls in line with his continued efforts to drive innovation in the AI space through strategic partnerships and acquisitions.