xAI buys X for $33bn

Elon Musk’s artificial intelligence startup, xAI, has acquired X, the social media platform formerly known as Twitter, for $33 billion.

Musk announced the transaction in a post on X on Friday, March 28, 2025.

Musk stated: “Xai has acquired X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).

“Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale.

“X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.

“xAI and X’s futures are intertwined. 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.

“The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.

“I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning.

“Thank you for your continued partnership and support.”

Musk bought Twitter for $44 billion in late 2022 in a transaction that included debt and launched xAI the following year, spending billions of dollars on high-end Nvidia chips for the venture.

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xAI in February released the latest version of its chatbot, Grok 3, which the billionaire hopes will find traction in a highly competitive sector contested by the likes of ChatGPT and China’s DeepSeek.

Musk has promoted Grok 3 as “scary smart”, with 10 times the computational resources of its predecessor, which was released in August 2024.

Grok 3 is also going up against OpenAI’s chatbot, ChatGPT – pitting Musk against collaborator-turned-arch rival Sam Altman.

Musk and Altman were among the 11-person team that founded OpenAI in 2015.

Created as a counterweight to Google’s dominance in artificial intelligence, the project got initial funding from Musk.

Musk left three years later, and then in 2022, OpenAI’s release of ChatGPT created a global technology sensation – which made Altman a tech world star.

Their relationship has become increasingly toxic and litigious ever since.

X’s billionaire owner, the world’s richest person, is a major financial backer of United States President Donald Trump and heads a Department of Government Efficiency that has been slashing the ranks of government employees.

Industry analysts at Emarketer this week forecast that ad revenue at X will grow this year as brands fear retaliation by politically connected Musk if they don’t spend on the platform.

“Many advertisers may view spending on X as a cost of doing business in order to mitigate potential legal or financial repercussions,” AFP quoted Emarketer principal analyst Jasmine Enberg as saying.

The Star