xAI Acquires X in $33 Billion All-Stock Deal, Forming Unified AI and Social Media Powerhouse

Elon Musk's artificial intelligence venture, xAI, has officially acquired the social media platform X, formerly known as Twitter, in an an all-stock transaction announced on March 28, 2025. The deal values xAI at $80 billion and X at $33 billion, factoring in X's $12 billion debt from its original acquisition, bringing its enterprise value to $45 billion. This strategic move aims to deeply integrate AI capabilities with X's vast global user base under a new combined entity, xAI Holdings Corp.

The acquisition sees X, with its over 600 million active users, formally brought under the umbrella of xAI, the AI startup Musk founded in March 2023. This consolidation is designed to leverage X's extensive real-time data for training xAI's artificial intelligence models, most notably its Grok chatbot, which was already integrated into the platform. The objective is to enhance user experiences and accelerate AI-driven knowledge discovery.

Elon Musk articulated the strategic rationale behind the merger in a post on X, stating, "xAI and X's futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent." He emphasized that this combination would "unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach."

This transaction follows Musk's 2022 acquisition of Twitter for $44 billion, which he subsequently rebranded to X as part of his vision for an "everything app." The all-stock nature of the current deal simplifies the financial structure for mutual investors in both privately held companies, including prominent venture firms and Saudi Arabia's Kingdom Holding Co.

The merger positions xAI to intensify its competition with other leading AI companies, as access to X's real-time information stream provides a unique advantage for training advanced language models. While promising smarter interactions and AI-driven enhancements for users, the integration also raises ongoing discussions regarding data privacy and content moderation on the platform. Linda Yaccarino, CEO of X, is slated to step down from her role on July 9, 2025, following the merger.