xAI, the artificial intelligence company founded by Elon Musk, has completed the acquisition of X, the social media platform previously known as Twitter, valuing it at $33 billion (approximately Rs. 2,82,447 crore). This deal sets the stage for Musk to share the enhanced value of his AI venture with co-investors.
This transaction is expected to bolster xAI’s capabilities, particularly with respect to its chatbot, Grok.
Musk, who leads Tesla and SpaceX in addition to xAI, stated on X: “The futures of xAI and X are closely linked. Today, we officially take the step to combine our data, models, computing resources, distribution networks, and talent.”
He elaborated that this merger appraises xAI at $80 billion (around Rs. 6,84,643 crore) while giving X a valuation of $33 billion (about Rs. 2,82,447 crore) after accounting for $12 billion in debt (roughly Rs. 1,02,699 crore).
Representatives from both X and xAI were unavailable for immediate comment, leaving various aspects of the deal, including the integration of X’s leadership and potential regulatory challenges, ambiguous.
Musk, recognized as the wealthiest individual globally, maintains a relationship with former U.S. President Donald Trump and oversees the Department of Government Efficiency.
Investor Prince Alwaleed bin Talal, whose Kingdom Holding is one of the largest stakeholders in both X and xAI, confirmed that he had requested this acquisition and noted that the collective value of his investments could rise to between $4 billion (approximately Rs. 34,233 crore) and $5 billion (around Rs. 42,791 crore) following the merger.
D.A. Davidson analyst Gil Luria pointed out that the $45 billion valuation for X, when considering its debt, aligns closely with the purchase price Musk paid for Twitter in 2022.
One anonymous investor in xAI mentioned that the deal reflects Musk’s consolidation of power and management across his various companies, stating that although he did not seek investor approval, he communicated the close collaboration between the two entities and the anticipated deeper integration with Grok.
Competition in AI
xAI was launched less than two years ago and significantly raised $10 billion (around Rs. 85,583 crore) in a funding round, which positioned its value at $75 billion (approximately Rs. 6,41,840 crore). It finds itself in competition with major players like Microsoft-backed OpenAI and the Chinese startup DeepSeek.
Earlier this year, Musk attempted to lead a consortium to acquire OpenAI for $97.4 billion (about Rs. 8,33,475 crore), a bid that was ultimately rejected. He is also involved in ongoing litigation to stop OpenAI from transitioning into a for-profit entity, with a recent ruling denying his request for a preliminary injunction against this move.
As the race in the AI sector escalates, xAI is expanding its data center capabilities, with plans to enhance its supercomputer cluster, “Colossus,” located in Memphis, Tennessee, which is considered the largest of its kind globally.
In February, xAI released Grok-3, the latest version of its chatbot. The X platform is expected to assist in the distribution of xAI products and provide a continuous stream of user-generated data.
Since acquiring Twitter, Musk has significantly reduced the company’s workforce, leading to a decline in revenue as advertisers fled the platform. However, there have been recent signs of advertisers returning to X, coinciding with Musk’s increasing influence in political spheres.
The seven banks that provided $13 billion (approximately Rs. 1,11,244 crore) in loans for Musk’s purchase of X maintained the debt on their balance sheets until they could find buyers last month. This was facilitated by increased investor interest in AI and an improved financial performance from X over the past two quarters.
Following the merger, those who acquired the debt from the banks are expected to see gains, according to Espen Robak, founder of Pluris Valuation Advisors, a firm specializing in non-liquid assets. “This debt is almost certainly valued higher now, if not fully settled,” he remarked.
In a separate legal development, a U.S. judge dismissed Musk’s motion to end a lawsuit alleging he defrauded former Twitter shareholders by delaying the disclosure of his initial investment in the company.
Thomson Reuters 2025
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
