Elon Musk has announced that his AI company, xAI—which we're told is also working on a videogame—has acquired his social media company, X, in an all-stock transaction. The Musk-to-Musk deal values X at $45 billion before subtracting $12 billion in debt.
Before rebranding it as X, Musk purchased Twitter for $44 billion in 2022. Last year, Fidelity estimated that X's value had dipped substantially since then, appraising the social media site at 72% less than Musk's purchase price.
Estimations of X's value have increased following the election and inauguration of Musk ally Donald Trump (who has gone so far as to promote Musk's cars on the White House lawn), and the return of some advertisers.
According to the New York Times, however, X is still struggling to hit revenue targets following the advertiser exodus. Citing an internal email, the paper reports that X has brought in $91 million in ad revenue this year, "well below its first-quarter target of $153 million."
Musk has now assigned a value of $80 billion to xAI, whose main products are Grok, a large language model competitor to ChatGPT which is already integrated with X, and its image generation component, Aurora. xAI raised $6 billion in new funding in December.
Part of xAI's advantage is that it can use X posts as training material. Unless users opt out, their data may be used "to train and fine-tune Grok and other AI models developed by xAI," the X user settings say.
"xAI and X's futures are intertwined," Musk said in a post on X. "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."
In November 2024, Musk said that he was also launching a videogame studio within xAI, though we haven't heard much about what this department may be working on, except that "photo-realistic graphics" are a goal. And we can assume that it will cater to the reactionary 'anti-woke' crowd Musk courts.
As for his own gaming habits, Musk admitted to account boosting in Diablo 4 and Path of Exile 2 in January after being called out, an incident which Ubisoft recently referenced in a dig that seemed uncharacteristically bold for the Assassin's Creed Shadows developer.
