Elon Musk — Tesla (TSLA) CEO, fervent apostle for launching a spacecraft to Mars, intense ally of Donald Trump and scourge of government workers — did a deal he hopes will rationalize his corporate life.
He announced Friday he sold X, the site formerly known as Twitter, to his artificial intelligence startup xAI. Both will be part of a new Musk-controlled company.
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Musk said the deal had a total value of $113 billion. That’s $80 billion for xAI and $33 billion for X.
It gets complicated from there. In Musk’s announcement of the deal, he valued X at $45 billion, but that was before accounting for $12 billion in debt.
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Musk bought X in 2022 for $44 billion. He has turned it into a hotbed of controversial conversation, often fanned by himself. It included massive amounts of pro-Trump content during the 2024 election campaign and continues to promote Trump initiatives and political views.
In his announcement, Musk claimed X has 600 million active users.
X has experienced valuation travails . . .
The value of X had sunk to $12 billion in January, The New York Times reported on Friday. The Times cited data from Fidelity Investments, which had helped Musk buy what was then Twitter.
It’s unclear if that means the $12 billion Fidelity cited is net of the debt X was carrying.
In March, X raised $900 million from new and existing investors at a valuation that the Journal said was “just above” its original takeover price.
. . . and has struggled to be a money-maker
However, X has struggled to generate revenue since Musk’s acquisition. In January, The Times said, Musk told employees the company’s revenue was “unimpressive” and X was “barely breaking even.”
In early March, it was struggling to meet first-quarter ad-revenue goals.
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In any event, X and xAI are already partners. Musk said their futures “are intertwined.”
X and an xAI-developed chatbot called Grok share resources, including software engineers. Grok is trained on data posted by X users, and some of X’s revenue comes from xAI.
The Wall Street Journal said Friday that all shares of X and xAI will be exchanged for shares in a new company, xAI Holdings Corp., registered in Nevada. Musk is listed as president.
Musk started xAI to compete against Open AI, the artificial intelligence lab he co-founded that makes ChatGPT software. He has sued to take over OpenAI to prevent its becoming a for-profit business, and the case is set to go to trial in the fall.
Musk’s complicated business structure
Most of Musk’s business holdings are privately held, including his Space X rocket company, Neuralink, the brain-implant chip company, and the Boring Company, which builds tunnels.
Boring is in the early stages of building a giant tunnel under downtown Las Vegas to relieve traffic congestion.
Tesla shares, meanwhile, have been repeatedly buffeted by investors worried about slumping sales and criticism of Musk personally because of his close relationship with President Trump.
The shares fell 3.5% Friday to $263.55. They’re down 34.7% in 2025 and 46.1% from their 52-week high of $488.54 reached on Dec. 18. The shares hit a closing low of $222.15. on March 10.
Musk has been leading the so-called Department of Government Efficiency, which has been trying to cut federal government spending and massively reduce its payrolls. It is a so-called department because Congress has not officially authorized it.
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