Elon Musk just made a big move. He announced that his company, xAI, is buying X, the social media platform he owns. This deal combines the two companies. xAI will swap its own stock for X’s stock and assets, and also take on X’s debt.
Musk says xAI has a top-notch AI model and data center. X, on the other hand, is a social media platform with over 600 million users, providing a huge amount of real-time data. By combining the two, they can integrate data, AI models, processing, and product delivery to users, making everything more efficient.
What this means
The deal will bring AI power to billions of people. xAI can use X’s data to train its AI, and X can help distribute xAI’s products to a wider audience. This move also simplifies things for Musk, who’s busy with other projects.
Musk bought Twitter, now called X, for $44 billion in October 2022. After that, he laid off many employees, and the platform faced criticism for its content filtering. Some sponsors stopped advertising, and revenue dropped. Investors estimated X’s value had fallen to around $12 billion. However, after Musk was appointed to lead the DOGE task force, some brands returned to advertising, and X’s value increased.
Good news for Musk
This deal boosts X’s value to $45 billion, a $1 billion increase from when Musk bought it. It also helps Musk pay off $12 billion in debt, likely from the $13 billion loan he took to buy Twitter. The bank had to sell the debt to investors last month.
Musk founded xAI in March 2023 and released the Grok chatbot in November 2023. The latest model, Grok 3, was released on March 3, 2025, and is claimed to be one of the most advanced AI models. xAI also built a large data center in Memphis to house the world’s largest supercomputer, called Colossus. Last month, xAI raised $10 billion in funding, valuing the company at $75 billion. So, the current valuation of $80 billion doesn’t seem too high after the successful launch of Grok 3.
Yesterday, Musk posted that the Grok app had become the number one free app on Android in the US, surpassing TikTok and ChatGPT. This popularity can help X overcome its past issues.