Elon Musk shook up the tech world again on March 28, 2025, revealing plans to merge his artificial intelligence company xAI with social media platform X. The all-stock deal values xAI at a whopping $80 billion and X at $33 billion—quite the haircut from the $44 billion Musk paid for Twitter back in 2022. Guess that’s what happens when you rename a blue bird.
The merger combines xAI’s artificial intelligence capabilities with X’s massive reach of over 600 million active users. Smart move. Musk announced the deal on X itself, naturally. Why pay for a press release when you own the platform?
This corporate reshuffling addresses X’s $12 billion debt situation—a pesky little detail from Musk’s leveraged buyout. The enterprise value of X sits at $45 billion minus that debt burden. Fidelity had previously valued X at just $9.4 billion last October. Talk about a generous reappraisal!
The strategic rationale? Combining data, models, compute, and talent to “accelerate human progress.” Corporate speak for: make both companies worth more money. The merger aims to deliver smarter experiences through the combined platform. Translation: more ways to keep users scrolling. Musk specifically emphasized the merger would enhance capabilities and reach of both companies.
Sullivan & Cromwell LLP is advising on the deal, with M&A partners Mike Ringler and Peter Jones leading the team. Renata Hesse and Juan Rodriguez are handling regulatory matters. They’ll earn their fees steering through this one.
Many shareholders already overlap between the two companies. Sequoia Capital and Fidelity have investments in both entities. Convenient. The merger could prevent further losses for Twitter investors while boosting valuations all around. This aligns with Musk’s stated goal of preventing losses for those who invested in Twitter.
In just two years since founding, xAI has positioned itself as a leading AI lab with its Grok platform. Now it’s getting a built-in distribution network. The combined company intends to “reflect and actively shape the world.” Bold claim, but that’s Musk for you.
The tech industry will be watching closely. Musk is redrawing the map of AI and social media power. Again.
