Just prior to the start of the weekend, Elon Musk announced that his artificial intelligence company xAI is acquiring his social media platform X (formerly Twitter) “in an all-stock transaction,” valuing xAI at $80 billion and X at $33 billion ($45 billion less $12 billion in debt). The merger has the potential to create a powerful GenAI-powered content platform. The billionaire purchased Twitter in late 2022 for $44 billion, following months of legal skirmishes. According to Musk, X currently touts more than 600 million active users, while “xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale.”

“Given Musk’s various unpopular changes at the app, and the resulting advertiser exodus, the actual value of X is seemingly a lot lower than” what was revealed on Friday, according to Social Media Today. In fact, Fidelity valued “the company at just $9.4 billion in October last year.” Regardless, this move is expected to secure the social platform’s immediate future.

Through a post on X, Musk explained the merger would “combine the data, models, compute, distribution and talent” necessary to effectively blend “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,” he added. “This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”

“Despite failing so far to make X an ‘everything app,’ Musk has tied these two ventures together closely since launching xAI in the summer of 2023,” writes The Verge, suggesting that combining the companies could result in “prominently placing xAI’s Grok tool within the social app.” (Grok is a chatbot developed by xAI that is based on an LLM of the same name.)

“While X’s valuation had reportedly dropped since the 2022 takeover before recently rebounding,” notes The Verge, “the value of xAI has only risen, along with other companies in the space like Nvidia and OpenAI, where Musk has gone from co-founder and early investor to legal antagonist after walking away from it in 2018.”

Since leaving OpenAI, Musk has “been involved in a public relations and legal spat with the company and CEO Sam Altman over the direction that it’s taken,” CNBC adds.

Musk’s xAI team has been busy developing AI software and large language models to compete with the likes of OpenAI, Google, Meta Platforms and Microsoft. The efforts of X and xAI have already been combined and in February, xAI released Grok 3 with reasoning capabilities and a Web analysis tool called DeepSearch. Access to Grok 3 is limited to X Premium+ subscribers or via a SuperGrok plan (that does not include X social features).

“In June, xAI announced it would build a supercomputer in Memphis, Tennessee, to train Grok,” reports CNBC. “In September, Musk revealed part of the Memphis supercomputer, now known as Colossus, was already online.”