Roula Khalaf, the Editor of the Financial Times (FT), curates her favorite stories in a weekly newsletter called the Editor’s Digest.
Elon Musk’s artificial intelligence company, xAI, has acquired the social media platform X for $45 billion. The transaction brings together two prominent businesses under Musk’s leadership. Musk stated that the future of xAI and X are interconnected, highlighting plans to integrate the data, models, computing power, distribution, and talent of the two companies.
The acquisition, carried out entirely with stock, values xAI at $80 billion, although Musk did not provide detailed information about the specifics of the deal. Last year, xAI achieved a $45 billion valuation following a $5 billion private funding round.
The recent announcement places X’s valuation slightly higher than the $44 billion price that Musk paid when taking the company private in October 2022. This news follows a $1 billion fundraising round earlier this month. X’s valuation recovery reflects a rebound after initially struggling under Musk’s ownership, which led advertisers to withdraw spending over concerns regarding his approach to content moderation.
Musk’s takeover of Twitter was financed through loans from a consortium of seven Wall Street banks, which have successfully sold nearly all of the $12.5 billion of loans used in the acquisition.
Investor interest in these loans increased post-Donald Trump’s electoral victory in November, attributed to Musk’s closeness to the administration and his position as the head of the Department of Government Efficiency, known for reducing bureaucratic complexity.
Investment firms such as Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments are stakeholders in X, with Sequoia, Andreessen Horowitz, and Fidelity also investing in xAI.
Musk established xAI in 2023 with the mission to understand the universe and to rival Sam Altman’s OpenAI. Since its inception, xAI has launched Grok, a chatbot, and invested in expanding its data centers through its Colossus supercomputer cluster.
Musk emphasized that the integration of xAI’s advanced artificial intelligence capabilities with X’s extensive reach will unlock significant potential. He postulates that this fusion will enable the creation of a platform that not only reflects the world but actively facilitates progress. X’s data, with over 600 million active users, is already being utilized to enhance Grok, while premium subscribers of X gain access to more advanced Grok features.
