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Elon Musk’s xAI acquires X at $33B valuation
Elon Musk today announced that xAI Corp. has acquired X Corp. in an all-stock transaction.
The deal values X at $33 billion excluding debt, Musk (pictured) stated in a post on the social network. He added that xAI is now worth $80 billion. That’s up from the $50 billion valuation the artificial intelligence provider reportedly received in its most recent funding round last year.
“Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk wrote. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Musk bought Twitter Inc. in 2022 for about $44 billion and renamed it to X shortly thereafter. He launched xAI the following year to compete with OpenAI in the large language model market. The AI startup went on to raise more than $12 billion in funding over multiple rounds.
Recent reports indicate that xAI and X had already integrated some of their business operations prior to the deal. In January, The Verge cited sources as saying that all of the LLM developer’s staffers are also X employees. Those staffers reportedly received corporate laptops from the social network along with access to its code base.
The acquisition might be conducive to xAI’s fundraising efforts. Now that it has a presence in the multibillion-dollar social media market, xAI might make the case to investors that it has more revenue growth opportunities than when it focused solely on AI. The company’s AI business currently generates only limited revenue: xAI reportedly told investors last November that it was “on pace” to reach $100 million in annual sales.
In February, Bloomberg reported that the LLM developer was seeking to raise about $10 billion in funding at a $75 billion valuation. That’s less than the $80 billion it’s valued at in the wake of the X acquisition. Sequoia Capital, Andreessen Horowitz and Valor Equity Partners are among the returning investors that could reportedly participate in the round.
Photo: NASA/Wikimedia Commons
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