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Elon Musk said Friday that he is combining his two companies, Xai and X, into a single entity. In X’s post, Musk states that Xai is the acquirer and is worth $80 billion in the deal, while X is valued at $30 billion. Musk acquired Twitter for $44 billion in 2022 and later changed its name to X.
Elon Musk said Friday that his startup Xai has merged with social network X.
“The future of Xai and X are intertwined,” Musk, the world’s wealthiest person, wrote in X’s post.
He added that the merger “unlocks immense possibilities by combining Xai’s advanced AI capabilities and expertise with X’s big reach.”
Both companies are managed privately by Musk, so the transaction amounts to a stock exchange, and X investors are paid in Xai stock. The companies have many mutual investors, including venture companies Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.
Musk, who is also CEO of Tesla and SpaceX, acquired Twitter in late 2022 on a deal worth around $44 billion, implementing massive cost savings and quickly renamed X. Linda Yaccarino.
Musk launched Xai two years ago with the clear goal of “understanding the essence of the universe.” The startup is trying to compete directly with Openai, a wealth of precious AI startup that Musk co-founded in 2015 as a non-profit lab. He later left Openai and recently became involved in public relations and legal spats with the company and CEO Sam Altman, which is what goes around the direction it was taken.
At Xai, Musk’s team develops large language models and AI software products, and assumes products from Openai, Google, Microsoft, Meta and more. X and Xai are already intertwined, and Xai’s Grok chatbot is available to users of social media apps.
In June, Xai announced that he would train Groks by building a supercomputer in Memphis, Tennessee. And in September, Musk revealed that some of the Memphis supercomputers, now known as Colossus, are already online.
Environmental and public health advocates have expressed concern about the ferocious speed of Memphis’ development, citing lack of community opinion and surveillance. The facility will be equipped with a natural gas combustion turbine, and XAI plans to expand and build a grey water treatment plant nearby.
Investors valued XAI at around $50 billion in last year’s funding round. Bloomberg reported last month that the company is in talks to raise funds at a $75 billion valuation. Openai closed in February to close the round at $260 billion, but in the deal that closed this month, the generation AI startup humanity was valued at $61.5 billion.
In addition to running Tesla, SpaceX and Xai, Musk spent a lot of his time in Washington, DC this year as a central figure in President Donald Trump’s second administration.
After giving $270 million to support Trump and other Republican candidates and causes in the 2024 campaign, Musk was in charge of the newly formed Government Efficiency (DOGE) by eliminating government costs and removing regulations. It is a position he is in a position to make change in ways that benefit his various businesses.
This is not the first time Musk has merged his two entities.
In 2016, Tesla acquired SolarCity for $2.6 billion. The solar installer was founded by his first cousins Lyndon and Peter Liv and funded by Musk, who served as board chairs. Tesla shareholders later sued, claiming that the transaction amounted to a violation of their fiduciary duty to personally enrich Musk. Upon hearing the dispute, a Delaware judge was decided in Musk and Tesla’s favor and allowed the automaker to make a deal without compensation.
Watch: X gets Xai
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