• xAI has purchased X for $33 billion.
• Elon Musk, who owns both companies, said that this would allow the pair to combine “data, models, compute, distribution and talent”.
• In September 2024, Fidelity said that X was likely worth just $9.9 billion after lowering the value of its initial investment from $19.66 million to just $5.5 million.

Since Elon Musk purchased Twitter and claimed to be turning it into an “everything app” ala China’s WeChat, the platform has degraded. We’re not just talking about the content that makes its way onto the platform, but its value as well.

In September 2024, a major investor that helped Musk secure funding to buy Twitter, Fidelity, revised the value of its $19.66 million initial investment down to $5.5 million. The company reckoned that in total, X was worth $9.9 billion, down from the ill-advised $44 billion Musk paid for it.

Back in February, X launched a new funding round in a bid to up the value of X, and it seems to have worked.

In a post late on Friday evening, Musk announced that X had been acquired for $33 billion. The buyer? Musk’s other company, xAI.

“Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale,” Musk wrote in the post.

“xAI and X’s futures are intertwined. 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. 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. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress,” the billionaire added.

As Musk lays out quite clearly in his post, xAI will now have access to all of X’s data which means that user data is likely to be fed into the machine. This isn’t all that new though. xAI’s Grok already combs through X data to answer questions from users only now, the line blurring xAI and X is obliterated.

Some have questioned why xAI acquired X and not the other way around. As we pointed out above, X isn’t in a good space financially and hasn’t been for a while so it’s unlikely X would be able to pay the $80 billion price tag that is now seemingly the price tag of the AI firm.

Many have questioned whether X really is worth the $33 billion at which this transaction paints it at. The fact that a Musk-owned company purchased a Musk-owned company has raised a few red flags for people. We’re sure there will be investigations whether it’s really worth that price or if Musk just decided that after three years at the helm, X had added another billion Dollars to its worth. We’re sure X stakeholders aren’t upset that they will now have a stake in a major AI player.

What the future of X looks like is unclear at this stage but expect Grok to feature more prominently that it does currently. As for the vision of X becoming an “everything app”, an AI injection may help that cause but we doubt that given the fierce competition in the AI space.