Tesla CEO Elon Musk boards Air Force One with U.S. President Donald Trump (not pictured) as they departs for Philadelphia, Pennsylvania, from Morristown Municipal Airport in Morristown, New Jersey, U.S., March 22, 2025.
Nathan Howard | Reuters
Elon Musk said on Friday that his startup xAI has merged with X, his social network, in an all-stock transaction that values the artificial intelligence company at $80 billion and the social media company at $33 billion.
“xAI and X’s futures are intertwined,” Musk, the world’s richest person, wrote in a post on X. “Today, we officially take the step to combine the data, models, compute, distribution and talent.”
He added that the merger would, “unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
The Tesla and SpaceX CEO acquired Twitter in a deal valued at around $44 billion in late 2022, implementing massive cost cuts and soon renaming it X.
Musk launched xAI less than two years ago with a stated goal to “understand the true nature of the universe.” The startup has been trying to compete directly with OpenAI, the richly valued AI startup that Musk co-founded in 2015 as a non-profit research lab. He later left OpenAI and has recently been involved in a public relations and legal spat with the company and CEO Sam Altman over the direction that it’s taken.
At xAI, Musk’s team has been developing large language models and AI software products, taking on offerings from OpenAI as well as Google, Microsoft, Meta and others. X and xAI have already been intertwined, with xAI’s Grok chatbot available to users of the social media app.
In June, xAI announced it would build a supercomputer in Memphis, Tennessee, to train Grok. And in September, Musk revealed part of the Memphis supercomputer, now known as Colossus, was already online.
In a financing round last year, investors valued xAI at around $50 billion. Bloomberg reported last month that the company was in talks to raise funds at a $75 billion valuation. OpenAI was closed to wrapping up a round in February at a $260 billion, while generative AI startup Anthropic was valued at $61.5 billion in a deal that closed this month.
In addition to running Tesla, SpaceX and xAI and overseeing X, Musk has spent much of his time this year in Washington, D.C., as a central figure in President Donald Trump’s second administration.
After contributing $270 million to help Trump and other Republican candidates and causes in the 2024 campaign, Musk was put in charge of the newly formed Department of Government Efficiency (DOGE), which is eliminating government expenses and getting rid of regulations. It’s a position that puts Musk in position to make changes in ways that benefit his various businesses.
This isn’t the first time Musk has merged two of his entities.
In 2016, Tesla acquired SolarCity for $2.6 billion. The solar installer was founded by his first cousins, Lyndon and Peter Rive, and funded by Musk who served as board chair. Tesla shareholders later sued, alleging the deal amounted to a SolarCity bailout, and a breach of fiduciary duty that enriched Musk personally. Delaware judges who heard the dispute decided in favor of Musk and Tesla, and allowed the deal to stand without any remuneration back to the automaker.
WATCH: X acquires xAI
