Elon Musk's xAI Acquires Social Media Platform X
The merger aims to leverage AI capabilities and user data from X, previously known as Twitter, following Musk's significant investment in the platform.
Elon Musk announced on March 28 that his artificial intelligence start-up, xAI, has acquired the social media platform X, formerly known as Twitter.
In a message posted on X, Musk stated that the futures of xAI and X are "intimately linked".
Musk had previously purchased Twitter in late 2022 for $44 billion, utilizing the platform for various purposes, including supporting former U.S. President Donald Trump's campaigns.
Musk articulated that combining xAI's data assets, AI models, computational capabilities, and human resources with X will create "smarter and more profitable services." He asserted that integrating the "capabilities and expertise of xAI in advanced AI with X's massive reach" would "unlock the immense potential" of the combined entity.
Musk noted that X has over 600 million users, although he did not specify the frequency of their engagement.
The acquisition is structured as an "entirely stock transaction," valuing xAI at $80 billion and X at $33 billion, a figure derived from the $45 billion purchase price minus $12 billion in debt.
An anonymous xAI investor indicated that this move consolidates Musk's position within his enterprises.
Musk founded xAI in 2023, a response to the success of ChatGPT, the leading generative AI launched by OpenAI in late 2022, an organization Musk had co-founded before severing ties with other founders.
xAI has developed its own chatbot, Grok, which benefits from the extensive data drawn from user interactions on X. This chatbot is designed to provide responses that are less aligned with prevailing social norms and to incorporate humor.
Since taking control of X, Musk has allowed more freedom of expression, including controversial and hateful speech, which has led some brands to reconsider their advertising strategies on the platform due to concerns over the context of their ads.
In a concluding message on X, Musk claimed that the merger of his two companies would enable the development of a platform that "not only reflects the world but actively accelerates human progress."
According to market research firm eMarketer, advertisers are beginning to return to X, forecasting a projected 17.5% increase in U.S. advertising revenues for the platform this year, the first such growth since 2021. However, analyst Jasmine Enberg noted that some of this growth appears to be driven by fear, as many advertisers view spending on X as a necessary operational cost to mitigate potential legal or financial ramifications.
Large corporations, particularly in the technology sector, have adjusted their policies to align with Trump's administration, with some rescinding diversity promotion programs and easing content moderation to fit Republican expectations.
Enberg commented on the current climate, stating that while hate and controversial content that has previously driven advertisers away from X remains unacceptable, there is a sense that such content might soon become inevitable.
In a message posted on X, Musk stated that the futures of xAI and X are "intimately linked".
Musk had previously purchased Twitter in late 2022 for $44 billion, utilizing the platform for various purposes, including supporting former U.S. President Donald Trump's campaigns.
Musk articulated that combining xAI's data assets, AI models, computational capabilities, and human resources with X will create "smarter and more profitable services." He asserted that integrating the "capabilities and expertise of xAI in advanced AI with X's massive reach" would "unlock the immense potential" of the combined entity.
Musk noted that X has over 600 million users, although he did not specify the frequency of their engagement.
The acquisition is structured as an "entirely stock transaction," valuing xAI at $80 billion and X at $33 billion, a figure derived from the $45 billion purchase price minus $12 billion in debt.
An anonymous xAI investor indicated that this move consolidates Musk's position within his enterprises.
Musk founded xAI in 2023, a response to the success of ChatGPT, the leading generative AI launched by OpenAI in late 2022, an organization Musk had co-founded before severing ties with other founders.
xAI has developed its own chatbot, Grok, which benefits from the extensive data drawn from user interactions on X. This chatbot is designed to provide responses that are less aligned with prevailing social norms and to incorporate humor.
Since taking control of X, Musk has allowed more freedom of expression, including controversial and hateful speech, which has led some brands to reconsider their advertising strategies on the platform due to concerns over the context of their ads.
In a concluding message on X, Musk claimed that the merger of his two companies would enable the development of a platform that "not only reflects the world but actively accelerates human progress."
According to market research firm eMarketer, advertisers are beginning to return to X, forecasting a projected 17.5% increase in U.S. advertising revenues for the platform this year, the first such growth since 2021. However, analyst Jasmine Enberg noted that some of this growth appears to be driven by fear, as many advertisers view spending on X as a necessary operational cost to mitigate potential legal or financial ramifications.
Large corporations, particularly in the technology sector, have adjusted their policies to align with Trump's administration, with some rescinding diversity promotion programs and easing content moderation to fit Republican expectations.
Enberg commented on the current climate, stating that while hate and controversial content that has previously driven advertisers away from X remains unacceptable, there is a sense that such content might soon become inevitable.
