Daijiworld Media Network – San Francisco

San Francisco, Mar 29: Tech billionaire Elon Musk announced on Friday that his artificial intelligence startup, xAI, is acquiring his social networking platform X (formerly Twitter) in a major deal valuing the company at $33 billion.

"This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach," Musk said in a post on his platform.

With over 600 million users, X’s future is now "intertwined" with xAI, which Musk launched two years ago. The merger is expected to combine data, AI models, computing power, and talent to accelerate innovation.

The all-stock deal values xAI at $80 billion, while X carries a valuation of $33 billion, factoring in the platform’s $12 billion debt.

Musk had acquired Twitter in 2022 for $44 billion, later rebranding it as X. His AI venture xAI was founded the following year, with Musk investing billions in acquiring high-end Nvidia chips to power its AI ambitions.

In February, xAI introduced Grok 3, the latest version of its AI chatbot, which Musk claims is "scary smart." The chatbot, said to be 10 times more powerful than its predecessor, is Musk’s answer to OpenAI’s ChatGPT and China’s DeepSeek.

Musk’s AI ambitions put him in direct competition with OpenAI's CEO Sam Altman, a former ally turned rival. Musk was among the co-founders of OpenAI in 2015 but left the company in 2018. Since the launch of ChatGPT in 2022, tensions between Musk and Altman have escalated, with legal disputes further souring their relationship.

Meanwhile, industry analysts predict that X's ad revenue will grow this year, partly due to Musk’s strong political connections. Some brands reportedly fear possible repercussions if they do not invest in advertising 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 Jasmine Enberg, principal analyst at Emarketer.