In a deal of $33 billion (about Rs. 2,82,447 crore), Elon Musk’s xAI purchased X, allowing him to share the value of his artificial intelligence company with his fellow investors in the business that was formerly known as Twitter.
The agreement might also make it easier for xAI to teach Grok, its chatbot.
In a post on X, Musk, who also leads SpaceX and the manufacturer Tesla, stated that “xAI and X’s futures are intertwined”: “Today, we officially take the step to combine the data, models, compute, distribution, and talent.”
“xAI at $80 billion (approximately Rs. 6,84,643 crore) and X at $33 billion (approximately Rs. 2,82,447 crore) — ($45 billion (approximately Rs. 3,85,111 crore) less $12 billion debt (approximately Rs. 1,02,699 crore)” he said about the combo.
Requests for comment from X and xAI representatives were not immediately answered. Many details of the acquisition are still unknown, like whether regulatory scrutiny would be present or how X’s leaders would be incorporated into the new company.
The richest guy in the world, Musk leads the Department of Government Efficiency and is a strong ally of US President Donald Trump.
Kingdom Holding is owned by Saudi Arabian businessman Prince Alwaleed bin Talal, who claimed to have asked for the change.
He mentioned that the second-largest investors in X and xAI are his enterprises. “After this deal, the value of our investments is expected to reach between $4 billion (roughly Rs. 34,233 crore) -$5 billion (roughly Rs. 42,791 crore) … and the meter is running,” he wrote in a post on X.
Gil Luria, an analyst at D.A. Davidson, stated that the $45 billion price tag for X—roughly Rs. 3,85,111 crore when debt was taken into account—was not an accident. “It is $1 billion (roughly Rs. 8,558 crore) higher than the take-private transaction for Twitter in 2022.”
An unnamed xAI investor expressed their lack of surprise at the deal, seeing it as Musk strengthening his management and leadership at his own businesses.
Musk informed investors that the two businesses had been working closely together and that the deal will lead to tighter integration with Grok, but he did not ask for their approval.
OpenAI Competition
According to a media report, Musk’s xAI venture, which was founded less than two years ago, recently raised $10 billion (about Rs. 85,583 crore) in a funding round that valued the business at $75 billion (approximately Rs. 6,41,840 crore).
It faces competition from Chinese upstart DeepSeek and Microsoft-backed OpenAI.
Musk, 53, filed a lawsuit to stop the ChatGPT creator from changing from a non-profit to a for-profit company after his consortium’s $97.4 billion (about Rs. 8,33,475 crore) purchase for OpenAI in February was turned down. This month, Musk’s bid for a preliminary injunction to stop the switchover was turned down by a judge.
xAI has been increasing its data center capacity to train increasingly sophisticated models as the AI competition heats up. Its “Colossus” supercomputer cluster in Memphis, Tennessee, is regarded as the biggest in the world.
In February, xAI unveiled Grok-3, the most recent version of its chatbot.
In addition to offering a real-time feed of users’ thoughts, screenshots, and other data, the X platform may be used to further disseminate xAI products.
Musk destroyed the company’s workforce after acquiring Twitter, which caused advertisers to abandon the site and caused revenue to drop off quickly. Brands have recently been going back to X as Musk’s power inside the Trump administration increases.
According to a source familiar with the transactions, the seven banks that gave Musk $13 billion (about Rs. 1,11,244 crore) in loans to purchase X held onto the debt for two years before being able to sell it all at once last month.
According to two people familiar with the situation, this was made possible by a number of circumstances, including X’s improved operating performance over the last two quarters and a spike in investor interest in exposure to AI businesses.
Espen Robak, the founder of Pluris Valuation Advisors, a firm that focuses on illiquid assets, stated that investors who purchased the debt from the banks will benefit from the merger. “For sure the debt is worth more now, if not fully paid off.”
In a related development, Musk’s attempt to have a lawsuit alleging that he had deceived former Twitter shareholders by failing to reveal his original investment in the firm sooner was denied by a US judge on Friday.
