Musk to Merge xAI with X Platform, Valued at 113 Billion US Dollars

Billionaire Elon Musk announced that his artificial intelligence startup xAI and the social platform X have merged through a complete stock exchange to form a new holding company called “xAI Holdings Corp.” This move signifies a deep integration of Musk’s two major technology ventures.

According to Musk’s statement on the X platform, the valuation of xAI in this transaction is $80 billion, and the valuation of the X platform is $33 billion (original valuation of $45 billion minus $12 billion in debt), bringing the total valuation of the new holding company to $113 billion.

Musk stated, “The future of xAI and X are inseparable. Today, we are taking a step towards combining data, models, computing power, distribution channels, and talent.”

He emphasized that this integration will unleash vast potential by combining xAI’s advanced artificial intelligence and technical expertise with X’s wide-reaching impact.

“The merged company will provide a smarter and more meaningful experience for billions, while staying true to our core mission of seeking truth and advancing knowledge. This will enable us to create a platform that not only reflects the world but also actively accelerates human progress,” Musk wrote.

Prior to the merger, xAI and the X platform had already shared some resources. When xAI was established, employees worked at X’s old office in San Francisco, and xAI also rented graphics processing units (GPUs) from X.

Sources informed The Wall Street Journal that Morgan Stanley and Sullivan & Cromwell law firm provided advice for this merger. Morgan Stanley has a close relationship with Musk, having previously advised him on the $44 billion acquisition of Twitter (now named X) and led the financing of that transaction.

Founded in 2023, Musk envisioned xAI as a strong competitor to OpenAI. Musk was a co-founder of OpenAI but later withdrew due to ideological differences.

Since its inception, xAI has rapidly expanded, not only swiftly creating language models and large data centers but also launching its first product, the AI chatbot “Grok,” distributed exclusively through the X platform.

Initially exclusive to X’s Premium Plus subscribers, Grok later became available to all X platform users, including limited access for free users.

Sources indicated that a few months before announcing the merger, xAI had tested the waters with investors for a new round of funding, aiming for a valuation of $75 billion, significantly higher than the previous $50 billion.

Prior to this transaction, X already held approximately 10% of xAI’s shares, and the two companies shared multiple common investors, including Sequoia Capital, Vy Capital, and Valor Equity Partners.

This is not Musk’s first integration of his businesses. As early as 2016, he drove Tesla to acquire SolarCity through a complete stock transaction, integrating clean energy and transportation sectors for vertical integration in clean energy. This integration also reflects Musk’s strategic positioning for deep integration of AI and social media.

Since Musk acquired Twitter in 2022 and renamed it X, the platform has experienced significant transformations. Due to relaxed content moderation policies and high-level personnel changes, numerous advertisers had initially pulled out, leading to a sharp decline in revenue.

However, with Musk’s increasing influence in the Trump administration, some advertisers have begun to return. According to research firm eMarketer’s forecast, X is expected to see its first advertising revenue growth since the acquisition in 2025.

Insiders stated that the senior executives of both companies believe that the integration will improve fundraising efficiency, and the consolidated company is poised to achieve synergies in resources, efficiency, and influence.

In his final post, Musk paid tribute to the team: “I want to salute the dedication and perseverance of all members of xAI and X, it is because of you that we have come this far. And this is just the beginning. Thank you for your cooperation and support along the way.”