Elon Musk sales X to his own company
Elon Musk sells X to xAI in surprise $33B deal amid legal turmoil.
Billionaire Elon Musk has sold his social media platform X (formerly Twitter) to his artificial intelligence startup xAI in a surprise all-stock transaction, a move that has triggered legal and investor scrutiny.
The timing of the deal—announced on March 28—coincides with a U.S. judge’s decision to reject Musk’s attempt to dismiss a class-action lawsuit over alleged securities fraud tied to his 2022 acquisition of the platform, reports Cointelegraph.
Deal Raises Legal and Financial Questions
Musk revealed that the acquisition values xAI at $80 billion and X at $33 billion, factoring in $12 billion in debt from the original $45 billion valuation when he bought Twitter in April 2022. The announcement came just hours after a judge ruled that a lawsuit from former Twitter shareholders—alleging Musk delayed disclosing his initial stake in the company—would proceed.
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Critics argue the transfer could further entangle xAI in the ongoing legal case. “It’s a whole lot spicier now,” said Adam Cochran, partner at Cinneamhain Ventures. “He’s opened up his AI entity to exposure here too, and it’s a much bigger pie.”
Cochran also accused Musk of using inflated xAI stock to overpay for X, all while taking an $11 billion paper loss on the transaction—an action he described as “screwing over both xAI investors and X investors.”
Strategic Synergy or Data Grab?
Musk characterized the acquisition as a step toward unifying AI and social media. “xAI and X’s futures are intertwined,” he said. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.” Musk hinted at the integration of data, models, compute, distribution, and talent, aiming to create a platform that “actively accelerates human progress.”
Critics, however, say the deal could be aimed at giving xAI access to X’s massive reservoir of user data. The company’s flagship product, the AI chatbot Grok, is already integrated into the X platform. Musk launched Grok in November 2023, touting its performance as superior to early versions of OpenAI’s ChatGPT.
Market Divided on xAI Valuation
The $80 billion valuation of xAI has also raised eyebrows. Cochran called it “an insanely dumb valuation,” suggesting that the move may be more about optics than fundamentals. Others, however, see potential. “This is shady all around,” noted crypto developer Keef, “but Grok is genuinely probably the top model for various tasks.”
As legal proceedings unfold and financial details are scrutinized, Musk’s high-stakes bet on combining social media and AI could reshape his AI ambitions—or expose xAI to deeper regulatory and investor backlash.
Recently we wrote, that Elon Musk, known for his groundbreaking ventures, has achieved a significant milestone by establishing a company valued at $113 billion in just two years.
