Why Elon Musk sold X to xAI? How will it benefit the users? World’s richest man explains what’s next

In a shock move, Elon Musk on Friday sold his social media platform X to his own xAI artificial intelligence company in a $33 billion all-stock deal.
While making the announcement, Musk further said that the deal included $12 billion of debt — which raises the overall valuation for X to $45 billion.

‘xAI and X’s futures are intertwined,’ Musk on why he sold X

“The combination values xAI at $80 billion and X at $33 billion,” Musk revealed in a statement posted on X — formerly known as Twitter.

Making the announcement on an X post, he said “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”

X CEO Linda Yaccarino echoed Musk’s optimism regarding the deal, posting, “The future could not be brighter.”

Musk acquired Twitter for $44 billion in late 2022, incurring substantial debt. Since then, he has cut jobs, changed user features, reinstated banned accounts, and rebranded Twitter as X. The merger is strengthen xAI, especially with the addition of its chatbot, Grok.

Speaking about xAI, Musk said, “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.”

He also pointed out highlighted that X, digital town square where more than 600M active users go to find the real-time source of ground truth, has also undergone a profound change, and stated, “has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.”

X recently raised nearly $1 billion in new equity, bringing its valuation close to Musk’s 2022 purchase price. The platform is also set for its first year of ad revenue growth since his takeover.