Elon Musk has sold social media company X to xAI, his own Artificial Intelligence company, for $45 billion, valuing the site at $33 billion plus $12 billion in debt.

Gone was the fanfare associated with Musk’s purchase of the social media site, then called Twitter, for $44 billion in 2022 — the speculation, the sink, and the theatrics. 

Instead, Musk made the announcement quietly in a post on his X account on Friday. 

"xAI and X's futures are intertwined," Musk posted on X. "Today, we officially take the step to combine the data, models, compute, distribution, and talent," he continued.

What exactly is xAI? 

Musk launched the xAI startup in March 2023, with the stated aim of understanding “the true nature of the universe”. Headquartered in the San Franscisco Bay Area , xAI’s goal on its website is to solve “real problems”. Its method of choice is, as its name suggests, developing large language models and AI products. 

According to a media report, the company's recent funding round raised $10 billion, ultimately helping to value it at $75 billion. Its main competitors are Microsoft-backed OpenAI and Chinese startup DeepSeek. 

xAI has been boosting its data centre capacity to train more advanced models. Its supercomputer cluster ‘Colossus’ in Memphis, Tennessee, is believed to be the largest in the world. 

Yet, more than Colossus, you are more likely to be familiar with xAI’s Grok, xAI’s inaugural project launched in 2023. Musk integrated the AI feature into X and made it free for all 600 million users soon after. Grok-3, the latest iteration of its chatbot, came out in February. Grok’s continued exposure to X gives it access to text and media published on the social media site by its users.

What does Musk mean by ‘intertwining’ X and xAI? 

The day he announced the deal, Musk wrote on X that the movie would “combine the data, models, compute, distribution and talent” between both companies. He added that it would “unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.” 

According to the Reuters news agency, industry watchers and users can expect X to ramp up its distribution of xAI products and also provide a feed with users’ musings, screenshots, and other data. It was not immediately clear what that would look like. 

One way could be through Grok, which can access information in real time through X. The deal is likely to help xAI increase its capacity to train Grok’s chatbots. 

Elon Musk, the world's wealthiest man, is also a close ally of US President Donald Trump, March 30, 2025, (AP Photo/Jeffrey Phelps)

So, what is behind the move? 

Is it because of the bad press Musk and his companies have been experiencing, or something more strategic? 

It could be both.

Consolidating x and xAI into a single entity would help shave costs and improve efficiency by removing barriers to integration. It can also bring value to shareholders. 

It could also push xAI’s services to a larger audience, something Musk alluded to in his post, when he mentioned using X’s massive reach to provide “smarter, more meaningful experiences to billions of people”.