Elon Musk is combining X (formerly Twitter) and xAI (his AI company that’s known for Grok).
The deal puts X under xAI with the transaction valuing X at $33 billion. That’s a 33% discount to the $44 billion he paid to take Twitter private, however with the debt component it might all wash out. There was a mix of debt and equity in that deal and it also included many outside investors, including Jack Dorsey.
Presumably, they are on board with combining the companies and leaving former Twitter investors with a much smaller stake. The merger numbers valued xAI at $80 billion.
The combination makes sense with Grok embedded in Twitter, though I’m not sure the valuation of xAI makes sense in a world where DeepSeek can do what Grok can and it’s open source.
Funnily enough, because of problems with Twitter today, it’s hard to see the tweet where Elon Musk confirms it.
It says:
@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 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.
X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.
I would love to know what went on behind the scenes to make this deal happen. I would much rather own 10% of Twitter than 2.9% of the combined companies.
