Elon Musk Folds X Into xAI, Creating a $113 Billion Juggernaut

In a consolidation of his tech businesses, X owner Elon Musk said in a post on Friday that xAI, the developers of Grok, had acquired X (formerly Twitter) in an all-stock transaction. According to Musk, the merger values xAI at $80 billion and X at $33 billion.

Musk bought Twitter for $44 billion in April 2022. By October 2024, Fidelity Investments adjusted the valuation of its stake in X, estimating the company’s overall value to be approximately $9.4 billion.

Though its valuation had recovered somewhat by December 2024, it was still down a whopping 77% from Musk’s purchase price. How Musk arrived at a $33 billion valuation, in other words, would make for interesting reading.

Already the head of several companies, including SpaceX and Tesla, Musk launched xAI in July 2023, a year after purchasing Twitter. While he said the goal of xAI was to “understand reality,” an ongoing feud with former business partner OpenAI CEO Sam Altman was also a driving factor.

“Today, we officially take the step to combine the data, models, compute, distribution, and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” Musk wrote on X Friday. “The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge.”

Calling X “the digital town square,” Musk said the platform boasted over 600 million active users. However, Meta, which launched a rival social media platform, Threads, in July 2023, and Bluesky, which launched in February of that year, have been trying to woo away users.

Bluesky's user count surpassed 27.44 million users in January 2025, many of whom had left Twitter after Musk’s takeover. At the same time, bolstered by its connections to Facebook and Instagram, Threads had over 320 million monthly active users as of February 2025.

Musk made headlines in July of last year when it was revealed that Grok would be trained on X user data. The setting can be disabled, but is on by default for user accounts.

Some social media users jeered today’s announcement, mocking the apparently sizable valuation boost in a deal between two of Musk's own companies.

“I also sold my 2008 Honda Accord to myself for $1 million,” New York Times tech reporter Ryan Mac said on Bluesky.

“Wait a min…what’s different though… other than on paper?” an X user asked.

The merger, however, could serve a more pragmatic purpose. With X still carrying significant debt—$12 billion, according to Musk's tweet—folding it into the xAI umbrella could give the company access to new investors, improved valuation, and a narrative pivot away from Twitter’s chaotic takeover.

“This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress,” he said.