Elon Musk Sells X to xAI for $45 Billion in Stock

Highlights

• Elon Musk announced the sale of X to his AI startup xAI for $45 billion in stock and $12 billion in debt.
• The transaction values xAI at $80 billion.
• Musk’s aggressive fundraising and strategic initiatives position xAI against AI giants like OpenAI, Google DeepMind, and Anthropic.

Caption – xAI acquired X, taking total valuation at $80 billion. (Photo by Dima Solomin on Unsplash)

Elon Musk made a surprising announcement recently, revealing that he has sold X (formerly Twitter) to his AI startup xAI for $45 billion in stock. The deal also includes $12 billion in debt owed by X.

According to Musk, this transaction now values xAI at $80 billion, doubling the $40 billion valuation from its recent $6 billion funding round. Musk founded xAI in 2023, and the company has been rapidly growing in the AI space.

@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).

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…

— Elon Musk (@elonmusk) March 28, 2025

Musk originally bought Twitter in 2022 for $44 billion and rebranded it as X. Right after acquiring it, he fired top executives, later rehiring some to keep things running. The platform faced early struggles with advertiser losses and verification issues but has since stabilized.

Musk also introduced three tiers of paid subscriptions, ranging from $4 to $50 per month. However, the financial details of this new sale remain unclear since neither X nor xAI are publicly traded.

This move comes just six weeks after Musk offered to buy OpenAI for $97.4 billion, a bid that OpenAI’s CEO Sam Altman rejected.

AI is one of the hottest sectors in tech, and Musk has been aggressively expanding xAI. The company developed GrokAI, an AI chatbot available to X users. To compete with giants like OpenAI, Google DeepMind, and Anthropic, Musk has assembled top AI researchers from Google DeepMind, Microsoft, and OpenAI while also building massive AI data centers.

“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,” Musk wrote in his announcement post.

Since its launch, xAI has been making major strides. In February 2024, it released Grok 3, an advanced frontier AI model that competes with the best AI models in areas like math, science, and coding.

Musk has been on an aggressive fundraising spree including a $6 billion round in December that previously valued xAI at $45 billion. Now, with this latest deal, Musk says xAI is worth $80 billion, signaling even bigger plans ahead.

FAQs

Q1. What was the recent announcement made by Elon Musk regarding X and xAI?

Answer. Elon Musk announced the sale of X (formerly Twitter) to his AI startup xAI for $45 billion in stock, including $12 billion in debt owed by X.

Q2. What are some of xAI’s recent achievements in the AI space?

Answer. xAI developed GrokAI and released Grok 3, an advanced AI model excelling in math, science, and coding. It has also built massive AI data centers.

Q3. How does this transaction impact xAI’s valuation?

Answer. The sale now values xAI at $80 billion, doubling its previous valuation of $40 billion from its $6 billion funding round.

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