Yesterday, Elon Musk’s AI startup xAI acquired X in a deal that valued the social networking site at $33 billion.

In a statement posted on social network X, Elon Musk said that his artificial intelligence startup xAI has merged with his social networking platform X in an all-stock transaction. The deal values ​​the artificial intelligence company at $80 billion while the social networking platform is valued at $33 billion.

“The future of xAI and X are intertwined,” Elon Musk wrote in a post on X. “Today, we are officially taking the step of combining data, models, compute, distribution, and talent.”

Mr. Musk sold X to another company he owns, xAI.

Explaining the decision, the world’s richest billionaire said the merger would “unlock enormous potential by combining xAI’s advanced AI capabilities and expertise with X’s massive reach.” He said the purchase price was $45 billion minus $12 billion in debt.

Since both companies are privately held and controlled by Musk, the transaction could be equivalent to a stock swap, in which X investors would be paid in xAI shares, according to CNBC.

The two companies now have a number of joint investors, including venture capital firms Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital and Saudi Arabia’s Kingdom Holding Co.

Mr. Musk acquired Twitter in a deal worth about $44 billion in late 2022. After taking the helm at Twitter, he made a major “blood change” at the company, cutting costs and personnel in large quantities. He then changed the name of Twitter to X. Immediately after Elon Musk announced the decision to sell X to xAI, Ms. Linda Yaccarino, CEO of X expressed her confidence in the bright future of this social networking platform.

“The future couldn’t be brighter,” wrote Linda Yaccarino.

Billionaire Musk launched xAI less than two years ago with the stated goal of “understanding the true nature of the universe.” The startup is attempting to compete directly with OpenAI, the highly valued AI unicorn that Musk co-founded in 2015 as a nonprofit research lab.

Elon Musk sued Open AI and CEO Sam Altman over the company’s direction.

Elon Musk then decided to leave OpenAI because he thought the company had gone astray from its original direction. Musk himself filed a lawsuit against Open AI and CEO Sam Altman over the company’s direction.

At xAI, Musk’s team has developed large language models and AI software products, receiving and processing services from OpenAI as well as other tech giants like Google, Microsoft, Meta and others.

With X and xAI merging and intertwining, xAI’s Grok chatbot will be available to X users.

In June, xAI announced it would build a supercomputer in Memphis, Tennessee to train Grok. In September, Musk revealed that part of the Memphis supercomputer, now called Colossus, was online.

Environmental and public health advocates have expressed concerns about xAI’s rapid growth in Memphis, citing a lack of community involvement and oversight, CNBC reported. Colossus is powered by natural gas turbines, and xAI also plans to expand and build a graywater treatment facility nearby.

Investors valued xAI at about $50 billion in a funding round last year. Bloomberg reported that the company is in talks to raise money at a $75 billion valuation, while OpenAI was close to closing a new round in February at a $260 billion valuation. Another generative AI startup, Anthropic, was valued at $61.5 billion in a deal that closed this month.

In addition to running Tesla, SpaceX and xAI and overseeing X, Mr. Musk has spent much of this year in Washington, DC, as a central figure in President Donald Trump’s administration.

In addition to running Tesla, SpaceX and xAI and overseeing X, Mr. Musk has spent much of this year in Washington, DC, as a central figure in President Donald Trump’s administration.

After donating nearly $300 million to help Trump win the election, Musk was put in charge of the Department of Government Efficiency (DOGE). DOGE has made a series of controversial decisions, including questions about whether the new role could help the world’s richest man make changes that would benefit his businesses.

The sale of X to xAI isn’t the first time Musk has merged two of his companies.

In 2016, Tesla acquired SolarCity for $2.6 billion. The solar installation company was founded by his cousins, Lyndon and Peter Rive, and was funded by Musk, who also serves as chairman of the board.

Tesla shareholders later sued, alleging that the deal amounted to a bailout of SolarCity and breached a fiduciary duty that enriched Musk personally. Delaware state judges, who heard the case, ruled in favor of Musk and Tesla, allowing the deal to stand without any compensation being returned to the automaker.