Elon Musk's AI Firm Integrates Online Platform X

In a significant move for tech entrepreneur Elon Musk, his artificial intelligence company, xAI, has officially absorbed the online platform X, previously known as Twitter. This acquisition marks a pivotal moment as X transitions from an independent entity into a subsidiary of xAI, potentially streamlining the legalities surrounding the use of X's vast content for training Musk's AI model, Grok.

Musk announced the acquisition through a stock deal, noting that X was already under his majority ownership. With this merger, the integration of data, computing infrastructure, and personnel is expected to occur. Musk claims that X boasts around 600 million active users, and he envisions that the newly combined entity could ultimately reach billions of users.

The financial details reveal that xAI is now valued at approximately $80 billion, while X's valuation stands at around $33 billion. Musk's initial purchase of Twitter, which laid the foundation for X, was made for about $44 billion in late 2022, funded in part by substantial loans totaling around $12 billion. Musk clarified that this debt would be excluded from X's current evaluation.

As neither xAI nor X are publicly traded, they are not required to disclose details regarding this merger officially. However, financial reports suggest that the new combined entity, referred to as XAI Holdings, might hold a valuation exceeding $100 billion.

Under Musk's leadership, X has faced challenges, particularly in the advertising domain. After acquiring Twitter, he significantly reduced the workforce and lifted several restrictions designed to curb hate speech and misinformation, which led to concerns from major advertisers about their brand safety alongside controversial content. As a result, many advertisers withdrew from the platform, prompting Musk to express frustration over a halving of advertising revenues.

Recently, however, there have been indications of a potential recovery in advertiser confidence, particularly following reports of a close association between Musk and former President Donald Trump. This relationship has reportedly influenced several companies to consider resuming their advertising on X, motivated by concerns over political retaliation and shifting market dynamics. Recent reports indicate that X has successfully raised $900 million from investors.

With the rebranding of Twitter to X, Musk previously articulated his vision for the platform to evolve into a comprehensive service encompassing various functionalities, ranging from banking to job listings. However, concrete advancements toward this vision have yet to materialize. The future direction of X under the xAI umbrella, as well as the role of Linda Yaccarino, the newly appointed CEO of X, remains to be clarified.