Elon Musk is merging X, which used to be known as Twitter, with his AI firm called xAI—famous for its Grok technology.
In this deal, X is joined under xAI, with X being valued at $33 billion. This is a significant markdown from the $44 billion Musk initially spent to privatize Twitter. However, when you factor in the debt, it could potentially even out. The original transaction was supported by a blend of debt and equity, involving several other investors like Jack Dorsey.
It’s assumed these stakeholders are on board with the merger, even if it results in former Twitter investors holding a smaller share. The merger places xAI’s valuation at a hefty $80 billion.
The rationale for the merger is understandable, especially with Grok being integrated into Twitter. However, there’s some skepticism about whether assigning xAI such a high valuation is justifiable, especially since DeepSeek offers similar capabilities and is open-source.
Ironically, because of current issues with Twitter, tracking down the tweet where Elon Musk confirmed this news is quite the challenge.
The tweet states:
“@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).”
Since xAI was founded two years ago, it has quickly emerged as a leading AI lab globally, constructing models and data centers at record-breaking speed and magnitude.
X is described as the digital town square with over 600 million active users seeking real-time information. Over the past two years, it’s been transformed into one of the most efficient firms worldwide, ready to support scalable future growth.
I’m genuinely curious about the behind-the-scenes workings that brought this deal to life. Personally, I’d prefer holding 10% of Twitter over owning a mere 2.9% in the merged entities.
