Elon Musk says he sold X to his AI company

Elon Musk Sells X to His AI Company for $45 Billion

Elon Musk has made headlines again with his latest business maneuver: on Friday evening, he announced the sale of his social media platform, X, to xAI, his artificial intelligence company. The deal is valued at approximately $45 billion, slightly surpassing the amount Musk paid for the platform in 2022, although it includes $12 billion in debt. This acquisition marks a significant move in Musk’s ongoing efforts to merge social media with advanced AI technology.

In a post on X, Musk stated that the deal values X at $33 billion, and he emphasized the interconnected future of both entities, declaring, “xAI and X’s futures are intertwined.” Musk went on to explain that the merger will allow for the combination of data, models, compute, distribution, and talent, which he believes will "unlock immense potential." He further noted that the joint project’s valuation could reach $80 billion, indicating his optimistic outlook for the future of both companies.

Despite the merger, Musk has not announced any immediate changes to X, which has already begun integrating xAI’s Grok chatbot into the social media platform. He hinted that the new combined entity would deliver "smarter, more meaningful experiences" to users. This strategic merger follows Musk’s extensive overhaul of the platform since acquiring it, which included significant staff layoffs and a controversial restructuring of the verification system.

Challenges Faced by X

After Musk’s takeover, X faced several challenges, including a mass exodus of major advertisers due to a surge in hate speech and the presence of extremist content. However, there are signs of recovery; big brands like Amazon and Apple are reportedly reinvesting in ads after having largely abandoned the platform during its tumultuous transition.

Investment firm Fidelity previously estimated that X’s value plummeted to nearly 80% less than what Musk initially paid for it. While recent developments indicate a partial rebound, the company is still valued significantly lower than Musk’s acquisition cost. The current market dynamics and the looming $12 billion debt balance highlight the complexity of X’s financial situation.

Implications of the xAI Acquisition

The merger between X and xAI could streamline Musk’s focus across his various ventures, particularly as he takes on a role in government under the Trump administration, raising questions about his oversight of other companies like Tesla. The integration is seen as a potential accelerator for xAI’s initiatives, enabling more rapid deployment of AI features to a broader audience through X’s existing user base.

The combined powers of X and xAI come at a crucial time, as Musk seeks to establish a significant foothold in the AI sector. Earlier this year, he attempted to orchestrate a deal to purchase OpenAI for nearly $100 billion amid ongoing competition with its CEO Sam Altman.

The Future of X and xAI

While the full benefits of this acquisition remain uncertain, the potential for integrating AI capabilities into social media may present new opportunities for both entities. Investors may view this acquisition as a gamble on Musk himself, rather than merely on X’s business model, especially given his significant influence and ability to shape market perceptions.

As X continues to stabilize its brand image, the incorporation of cutting-edge AI solutions could play a pivotal role in restoring advertiser confidence and enhancing user engagement. Time will reveal the long-term impacts of this acquisition, but for now, Musk’s vision for a combined X and xAI is set to take shape amidst a rapidly evolving tech landscape.

This content is adapted from original reporting by CNN.