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American Focus > Blog > Economy > Elon Musk’s artificial intelligence group buys X for $45bn
Economy

Elon Musk’s artificial intelligence group buys X for $45bn

Last updated: March 28, 2025 5:35 pm
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Elon Musk’s artificial intelligence group xAI has made a significant move by acquiring the social media platform X for a whopping $45 billion. This strategic decision by the billionaire entrepreneur marks the convergence of two of his flagship businesses.

In a statement released on Friday evening, Musk emphasized the intertwined futures of xAI and X, noting that the merger would leverage the combined strengths of both companies, including data, models, computing power, distribution, and talent. The all-stock deal places a valuation of $80 billion on xAI, with X being valued slightly higher at $45 billion following a $5 billion private funding round last year.

The deal, which includes $12 billion in debt, values X above the $44 billion price that Musk paid to take the company private in October 2022. This move comes on the heels of a $1 billion fundraising round earlier this month, signaling a resurgence in X’s fortunes. The platform had faced challenges after Musk’s takeover, with advertisers withdrawing their spending due to concerns over his hands-off approach to moderation.

Furthermore, a consortium of seven Wall Street banks have successfully offloaded nearly all of the $12.5 billion in loans that Musk utilized to finance his acquisition of Twitter, which was later rebranded as X in 2022. These lenders had been burdened with the debt while Musk worked to revamp X’s operations, resulting in equity investors reevaluating their stakes in the platform at discounted rates.

Investor interest in the loans saw a boost following Donald Trump’s election victory in November, given Musk’s close ties to the new administration and his role as a confidant of the president. The involvement of prominent firms such as Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments underscores the confidence in Musk’s vision for X and xAI.

See also  North American and European leaders agree on 5% defence spending target

Last year, Musk granted investors who supported his Twitter acquisition a 25% stake in xAI, contributing to the social media platform’s increased value. It remains to be seen how this arrangement will factor into the recent deal.

Musk founded xAI in 2023 with the goal of exploring the true nature of the universe and challenging the dominance of Sam Altman’s OpenAI. The company has since launched its chatbot, Grok, and expanded its data center capabilities with the Colossus supercomputer cluster.

The integration of xAI’s advanced AI capabilities with X’s extensive user base is expected to unlock significant potential. Musk envisions a platform that not only reflects the world but actively propels human progress forward. Data from X, which boasts over 600 million active users, has already been instrumental in training Grok. As a result, premium subscribers of X can access more sophisticated features powered by Grok.

This momentous acquisition signals a new chapter for both xAI and X, as they embark on a journey to harness the power of artificial intelligence and propel innovation in the digital realm.

TAGGED:45bnArtificialBuysElonGroupIntelligenceMusks
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