xAI Buys X for $45 Billion; Creates GenAI-Powered Content Platform
Elon Musk’s artificial intelligence (AI) company has acquired his social media platform in a multibillion-dollar deal.
The deal, announced by Musk Friday (March 28), values his xAI at $80 billion and X, the social media platform once known as Twitter, at $33 billion ($45 billion minus $12 billion in debt).
“xAI and X’s futures are intertwined,” Musk wrote in a post on the social media site. “Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
According to Musk, X now has 600 million active users. Data from those users has been used to train Grok, xAI’s artificial intelligence model. And premium subscribers to X can access some of Grok’s higher-end features.
The news follows reports from last month that X was in talks to raise funds from investors at a $44 billion valuation, the same figure Musk paid for the platform in 2022.
An investor in X told the Financial Times (FT) that getting back to the original purchase price has been a symbolic target for Musk. As that report noted, Musk loosened X’s moderation policies after taking over. That prompted an advertiser exodus, driving down revenues.
Fidelity Investments, the report points out, has slashed the company’s value, saying in late September it was under $10 billion. However, many advertisers have returned, with Amazon recently increasing its spending as Musk forged stronger ties with the White House.
Investors told the FT that X’s finances seem to be improving, with the company having posted $1.2 billion in adjusted earnings before interest, taxes, depreciation and amortization last year. That figure aligns more or less with the time just before Musk acquired Twitter, the report added, though one source said the number was subject to “significant adjustments.”
Meanwhile, xAI and chipmaker Nvidia recently joined the $30 billion AI Infrastructure Fund, an AI infrastructure project backed by BlackRock, Microsoft and Abu Dhabi AI investment group MGX, with the goal of raising up to $100 billion for the technology.
“The global buildout of AI infrastructure will benefit every company and country that wants to achieve economic growth and unlock solutions to the world’s greatest challenges,” Jensen Huang, founder and CEO of Nvidia, said in the announcement.
“AI factories built on Nvidia full-stack AI infrastructure will convert data into intelligence that will accelerate every industry and help society achieve unimaginable breakthroughs.”
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