Compiled and translated by Silicon Rabbit

Musk's Bold AI Vision

On Friday, March 29, 2025, Elon Musk made a groundbreaking announcement on the social media platform X, revealing that his AI venture, xAI, had successfully acquired X (formerly Twitter) through an all-stock deal. This transaction valued xAI at $80 billion and X at $33 billion (with a net worth of $45 billion after accounting for $12 billion in debt).

Excluding debt, the newly formed entity, XAI Holdings, boasts a combined valuation of $113 billion (approximately RMB 820.8 billion), underscoring the immense potential of this merger.

This strategic union signifies the formal convergence of Musk's two pivotal business ventures, illuminating his ambitious aspirations in the realm of AI. The acquisition aims to amalgamate resources such as data, computational power, and top talent to propel AI development to new heights.

In the era dominated by large models, data emerges as a critical competitive advantage. With access to X's proprietary datasets, xAI will secure unique benefits and establish formidable barriers against its competitors in the large model landscape.

AI at the Core

Prior to this merger, xAI and X maintained a close relationship: xAI utilized X's data to train its Grok chatbot, which Musk subsequently made available to X users. In his X post, Musk emphasized, "The futures of xAI and X are inextricably linked." This integration will streamline their resources, including computational power and expertise, while also offering xAI a vast consumer base through X.

Founded by Musk in 2023, xAI has swiftly assembled a team of leading AI researchers from Google DeepMind, Microsoft, and OpenAI, and established a state-of-the-art AI data center.

Recently, xAI unveiled Grok-3, which Musk heralds as the world's most intelligent AI, a feat made possible by substantial capital investment.

Musk has spearheaded a remarkable funding campaign for xAI, including a $6 billion round last December, valuing the startup at $45 billion. Today, xAI's valuation has soared to nearly $80 billion.

Meanwhile, X's valuation plummeted to $10 billion amidst Musk's radical reforms but has since rebounded to $33 billion following the merger, offering investors a viable exit strategy.

A New Model for AI-Social Media Mergers

By combining X's exclusive datasets with xAI's computational prowess, the company further widens its lead over competitors like OpenAI and Anthropic. Its flagship model, Grok 3, already stands at the forefront of the industry, while X's global reach provides an unparalleled "super test field" for AI technology.

Bloomberg analysts foresee this transaction setting a precedent for other AI companies to merge with social media platforms, accelerating industry consolidation. "This deal signals that AI rivals, including OpenAI, Anthropic, Perplexity, and Mistral, may pursue similar mergers to expand their consumer reach and distribution capabilities," said Bloomberg analyst Mandeep Singh.

Given xAI's towering valuation of $80 billion, which surpasses the combined market capitalization of Snap, Pinterest, and Reddit, smaller social media firms are likely to actively seek partnerships with major language model providers.

However, the combined valuation of $113 billion has sparked debates, with market participants questioning whether Musk can uphold his pledge to "change the world with AI."

Investor Impact

Certain investors stand to benefit from this merger. According to PitchBook, xAI recently secured $12 billion from a diverse group of investors. Companies like Sequoia Capital, Andreessen Horowitz, Saudi Prince Alwaleed Bin Talal, and Qatar Investment Authority are also investors in X. Those holding shares in both companies may remain unperturbed.

Conversely, some xAI investors, such as Abu Dhabi's sovereign wealth fund MGX, NVIDIA, and AMD, do not have stakes in X, leaving their reactions uncertain.

Reference Articles:

Musk solves X (information source)

Elon Musk says xAI acquired X (TechCrunch)