Investors are still trying to recover damages from Elon Musk for his actions in the run-up to the 2022 Twitter deal, but the billionaire suddenly announced a new deal yesterday involving the company renamed X. He sold it to his $80 billion valuation startup xAI, valuing X at $33 billion.
Image source: xAI
Recall that in 2022, Musk bought Twitter for $44 billion, but now the billionaire has explained that, taking into account debt obligations in the amount of $12 billion, the social network’s business is already worth $45 billion. Formally, the deal between xAI and X is carried out through a mutual exchange of shares, so no funds were actually required to conclude it. Before the merger, both companies had common investors, and since they remain private, this simplified the approval of the deal.
The combined company was named XAI Holdings, and its net worth is easily calculated at over $100 billion. Morgan Stanley reportedly provided financial advice on the deal. The symbiosis between X and xAI was evident long before the deal. Musk tried to use X’s social media data to train xAI’s Grok chatbot, which was made available to X subscribers of a certain level. The billionaire also fairly freely distributed valuable computing resources in the form of Nvidia accelerators between the two companies.
«The future of XAI and X is intertwined. Today, we officially take a step toward unifying data, models, compute, distribution, and talent. This combination will unlock incredible potential by combining xAI’s advanced AI capabilities and competencies with X’s broad reach,” Elon Musk said on the pages of the social network of the same name.
Third-party estimates suggest that social network X will increase its advertising revenue in the U.S. by 17.5% to $1.31 billion this year, and globally by 16.5% to $2.26 billion. Linda Yaccarino, who nominally remains X’s CEO, commented on the xAI deal succinctly: “The future couldn’t be brighter.” Yaccarino’s future role in the combined company is not specified.