The companies are being combined in an all-stock deal that values xAI at US$80b and X at US$33b, factoring in the social network’s $12b debt.
Elon Musk said his artificial intelligence startup xAI is buying his social networking platform X. Photo / Getty Images
Elon Musk said his artificial intelligence startup xAI is buying his social networking platform X. Photo / Getty Images
Musk bought Twitter for $44b 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.
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 that was released in August last year.
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 US 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,” said Emarketer principal analyst Jasmine Enberg.
-Agence France-Presse