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Elon Musk’s artificial intelligence company, xAI, has officially acquired his social media platform, X, in a multibillion-dollar deal aimed at creating a next-generation, AI-driven content ecosystem.
Announced on March 28, the deal values xAI at $80 billion and X at $33 billion (after factoring in $12 billion in debt). Musk emphasized the strategic synergy between the two companies, stating:
“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.”
Strategic Integration of AI and Social Media
X currently boasts 600 million active users, providing a vast data pool that has already been leveraged to train Grok, xAI’s artificial intelligence model. Premium X subscribers can access some of Grok’s advanced AI-powered features, positioning the platform as a leader in AI-integrated social media experiences.
The acquisition comes after reports last month suggested that X was in talks to raise funds at a $44 billion valuation, the same price Musk originally paid for Twitter in 2022.
Industry analysts believe Musk has been keen to restore X’s value after an initial drop due to loosened content moderation policies, which led to an advertiser exodus and declining revenues. However, X’s financial outlook appears to be rebounding, with advertisers such as Amazon increasing their spending and the platform reportedly generating $1.2 billion in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) last year.
xAI’s Expansion and AI Infrastructure Investment
Beyond the acquisition, xAI is making significant strides in AI infrastructure development. The company recently joined forces with Nvidia to participate in the $30 billion AI Infrastructure Fund, a project backed by BlackRock, Microsoft, and Abu Dhabi AI investment group MGX, with the goal of raising up to $100 billion for global AI expansion.
Jensen Huang, CEO of Nvidia, highlighted the transformative potential of AI, stating:
“AI factories built on Nvidia full-stack AI infrastructure will convert data into intelligence that will accelerate every industry and help society achieve unimaginable breakthroughs.”
The Future of X as an AI-Powered Platform
With the merger of xAI and X, Musk is reshaping the digital landscape, turning X into a powerful, AI-enhanced content platform. This move aligns with his broader vision of integrating cutting-edge artificial intelligence into everyday digital experiences, marking a new era for social media, AI-driven content, and digital intelligence.
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