Elon Musk announced that he has sold his social media platform, X, to his artificial intelligence company, xAI. The transaction, valued at $45 billion, is slightly higher than what Musk paid for the company in 2022, though it includes $12 billion in debt.
According to Musk’s post on X, this transaction values the platform at $33 billion.
“xAI and X’s futures are intertwined,” Musk said in a post on X. “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.”
Musk has not announced any immediate operational changes to X. However, xAI’s chatbot, Grok, is already part of the social media platform. Musk stated that the integration will lead to “smarter, more meaningful experiences” for users. He also pegged the value of the unified company at $80 billion, CNN reports.
Since acquiring the platform in 2022, Musk has implemented sweeping changes that have driven away major advertisers. He cut the workforce by 80%, overhauled the verification process, and restored previously suspended accounts belonging to White supremacists.
Though X’s current valuation is below Musk’s purchase price, it marks a turnaround. In October, investment firm Fidelity assessed X’s worth as nearly 80% lower than at the time of Musk’s acquisition. By December, the platform had regained some value, reaching about 30% of its original purchase price, according to Fidelity’s Blue Chip fund, which holds a stake in the company.
This development comes amid growing scrutiny of Musk’s involvement in the Department of Government Efficiency under the Trump administration, raising concerns about the level of attention he gives to his businesses, including Tesla. By combining X and xAI, Musk could consolidate his efforts.
Musk has also been pushing to establish dominance in artificial intelligence, an area that is central to both the Trump administration’s priorities and the tech industry’s evolution. Earlier this year, Musk led an investor group that attempted to acquire OpenAI, the developer of ChatGPT, in a deal nearing $100 billion—another chapter in the ongoing rivalry between Musk and OpenAI CEO Sam Altman.
It remains uncertain how the acquisition will advance Musk’s AI goals, but integrating xAI with X could enable faster dissemination of AI models and features to a wide user base.
Major advertisers are returning to X after previously leaving due to concerns over hate speech and offensive content. Amazon has significantly increased its advertising expenditure on the platform, and Apple has resumed advertising after a 15-month hiatus. These developments mark a notable shift for X, which had faced a decline in ad revenue following controversies related to content moderation.
The platform's stabilization has also benefited bondholders, who were previously facing significant losses. Recently, they managed to sell substantial portions of their X debt holdings at 97 cents on the dollar, albeit with high-interest rates.
In February, Bloomberg reported that X was in discussions to raise funds, potentially valuing the company at $44 billion. The outcome of these talks remains unclear, especially considering xAI's recent acquisition of X for $33 billion. X continues to manage a substantial debt load, with Elon Musk stating that the total amounts to $12 billion.
A significant factor in X's recent valuation rebound is its association with xAI, which was seeking a $75 billion valuation in a funding round last month.
Elon Musk's role as a special government employee under President Donald Trump has also influenced X's resurgence. His position has provided him with considerable influence over federal operations, which he has leveraged to promote the platform.
Investors in X appear to be placing their confidence in Musk's leadership rather than the company's business fundamentals. Over the past year, Musk has transformed X into a platform that amplifies the president's campaign, sharing various political messages with his extensive follower base.
With President Trump back in office and Musk involved in the executive branch, X has regained prominence as a key social media platform for engaging with the administration. Musk has also utilized X to communicate changes implemented by the Department of Government Efficiency.
