Elon Musk announced Friday that his artificial intelligence company, xAI, has officially acquired X—formerly known as Twitter—in an all-stock transaction that values the two companies at a combined $113 billion.
The deal places an $80 billion valuation on xAI and $33 billion on X. Musk originally acquired Twitter in 2022 for $44 billion, meaning the new valuation represents a notable drop. However, Musk indicated that the move was strategic and forward-looking, with the goal of fully integrating both platforms’ technological and operational resources.
“xAI and X’s futures are intertwined,” Musk wrote in a post on X. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
While both companies are privately held, they share overlapping investors and infrastructure. The acquisition allows Musk to consolidate the two ventures under a single strategic direction, particularly at a time when AI and data infrastructure investments are accelerating.
The merger also appears to be a defensive move to protect stakeholders. Investors who initially backed Musk’s purchase of Twitter have seen its value decrease since the acquisition. By folding the platform into xAI, Musk may be seeking to reframe the long-term potential of their investment through exposure to a fast-growing AI sector.
According to Musk, the goal of the merger is to deliver “smarter, more meaningful experiences” to users, while maintaining a mission of “seeking truth and advancing knowledge.” xAI’s technology has already been integrated into X through Grok, its in-house chatbot, which was trained using data from the platform’s public posts.
Industry analysts say the move fits the broader trend of tech companies racing to enhance AI capabilities and build out data center infrastructure. “This appears to be a sensible step, especially with AI now being central to everything,” said Paolo Pescatore, founder of PP Foresight.
The development comes amid Musk’s ongoing legal battle with OpenAI, a company he co-founded in 2015 but left after a falling out with leadership. Musk has sued OpenAI and CEO Sam Altman, alleging that the company abandoned its nonprofit mission. In a separate bid earlier this year, a group led by Musk attempted a $97.4 billion takeover of OpenAI, which was rejected.
On Friday, the Wall Street Journal reported that OpenAI is finalizing a $40 billion deal with SoftBank, which is reportedly contingent on a full transition to a for-profit model.
Meanwhile, Musk continues to play an increasingly visible role in U.S. politics. As a key figure in President Donald Trump’s administration, he is pushing for deep federal spending cuts. This weekend, Musk is in Wisconsin, where he’s contributing millions to a high-stakes state Supreme Court race. On Friday, the state’s attorney general filed a court request to stop Musk from distributing $1 million checks to voters ahead of the election.
