(Bloomberg) โ Billionaire Elon Musk said his xAI artificial intelligence startup has acquired the X platform at a valuation of $33 billion, marking a surprise twist for the social network formerly known as Twitter.
Most Read from Bloomberg
โThe combination values xAI at $80 billion and X at $33 billion,โ he wrote in an X post on Friday. The X value is $45 billion when including $12 billion of debt, he said. It was an all-stock transaction.
โxAI and Xโs futures are intertwined,โ he said. โToday, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAIโs advanced AI capability and expertise with Xโs massive reach.โ
Musk, the worldโs richest person, acquired Twitter for $44 billion in 2022, a transaction that included debt. After taking control of the platform, he slashed jobs, revamped features and allowed some banned accounts to return.
He also has used the service to promote Grok, a chatbot developed by xAI. The startup is competing with AI firms such as OpenAI, which Musk co-founded before an acrimonious split with that company.
โThis helps integrate the system quite nicely,โ said Shweta Khajuria, a Wolfe Research analyst who views the deal as a positive for both of Muskโs businesses. โThis gives Grok a unique advantageโ by providing access to vast amounts of training data while also allowing xAI to control โ or even cut off โ that data flow to other companies.
Musk had previously canvassed potential investors for an xAI funding round at a valuation of about $75 billion, Bloomberg News reported in February. xAI investors have included Sequoia Capital, Andreessen Horowitz, Fidelity Investments and BlackRock Inc.
โSince its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale,โ Musk said in the post.
X, meanwhile, โhas been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth,โ he said.
The social network raised close to $1 billion in new equity from investors, Bloomberg reported this month, in a deal that gave the company a valuation in line with when Musk took it private in 2022.
The company also is on pace for its first year of advertising revenue growth since the Musk takeover. The company is projected to generate $1.31 billion in US advertising sales in 2025, an increase of 17.5%, according to research firm Emarketer. Globally, Xโs ad sales are estimated to be $2.26 billion this year, up 16.5%.