Tech billionaire Elon Musk publicly proclaimed that his AI startup, xAI, acquired his social media and microblogging platform X (formerly Twitter) last Friday, March 29. The acquisition has reportedly taken place in an all-stock transaction worth $33 billion. It is notable to mention that xAI is valued at $80 billion, signifying a deal of $45 billion less $12 billion in debt.
In an X post, Musk wrote, "xAI has acquired X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt) ...."
Musk, the global business tycoon and the CEO of renowned firms like SpaceX and Tesla Inc., took over Twitter in 2022 through a deal worth $44 billion, subsequently changing its name to X. The acquisition followed significant cost-cutting and dismissing around 80% of Twitter's staff.
On the other hand, launched in 2023, xAI has become an AI powerhouse in no time. Grok, xAI's chatbot, is now one of the leading AI models, competing with OpenAI's ChatGPT and Google's Gemini. The recent upgrades of Grok have shown advanced reasoning and improved the ability to solve increasingly complicated queries.
Following the acquisition of X by xAI, investors and other noted individuals have shown their concern and overviews. Linda Yaccarino, the CEO of X, highlighted the situation and stated, "The future could not be brighter." One of the xAI investors anonymously shared that the acquisition was not very shocking and was a result of Musk's leadership approach to strengthening his companies.
Nevertheless, Musk apparently did not seek validation from any investors before initiating the acquisition since both companies are privately held and controlled by him, but he gave hints about the collaboration between the two companies.
What Can We Expect from the Acquisition?
As Musk stated, "xAI and X's futures are intertwined", the contemplations are evident in the combined effort of both companies to make significant advancements. Reports assert that xAI's chatbot Grok is already trained on data retrieved from the posts on X. More than 600 million individuals use X, and conversely, xAI has become a leading AI lab globally. Therefore, in the coming years, xAI will be able to leverage X's extended reach, and the latter will integrate advanced AI capabilities offered by the former.
The merger aims to provide more meaningful and innovative experiences to people across the world and combinedly contribute to human progression.
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