Bought for $44B, Sold for $33B! Why Did Elon Musk Offload X to xAI & What’s the Bigger Plan?

Billionaire entrepreneur and tech mogul Elon Musk has announced a major move—his artificial intelligence (AI) company, xAI, has acquired X (formerly Twitter) in a $33 billion deal. This decision aligns with Musk’s vision of integrating AI-driven advancements into the social media platform. But why did Musk make this move, and what benefits will it bring? Let’s break it down.

Why Did Elon Musk Sell X to xAI?

Elon Musk has long been vocal about the potential of artificial intelligence. His company, xAI, is one of the fastest-growing AI labs, and merging it with X (formerly Twitter) allows AI to be embedded within the platform. Musk aims to create a smarter, AI-powered social network that enhances user interactions.

Since Musk’s $44 billion acquisition of Twitter in 2022, the platform has gone through several changes, including a rebranding to X and the introduction of a paid verification system. Despite these transformations, X’s financial growth has been slow, with its valuation reportedly dropping to $12 billion by the end of 2023. By selling it to xAI, Musk is strategically realigning his resources towards a more futuristic and profitable venture.

Elon Musk stated that the integration of xAI with X will allow the two companies to merge their strengths—X’s huge user base of over 600 million active users and xAI’s cutting-edge AI models and computing power. This merger is expected to push the boundaries of social media and AI.

What Will Be the Benefits of Elon Musk's xAI and X Deal?

With xAI now controlling X, the platform is expected to incorporate advanced AI features. This could mean better content recommendations, smarter chatbots and AI-assisted moderation. Users may experience a more interactive and intelligent social network.

Musk’s xAI is rapidly growing. In December, it raised $6 billion from investors, pushing its valuation to $35–$40 billion. By absorbing X, xAI gains direct access to a vast amount of user data, which could significantly enhance AI training and model development.

Elon Musk described X as one of the most efficient companies in the world. Now, by integrating AI into the platform, he believes that it will be able to scale at a faster rate and open new revenue streams.

The Future of Elon Musk’s xAI-X Merger

Elon Musk calls this 'just the beginning', emphasising that xAI and X are now deeply connected. X CEO Linda Yaccarino has also expressed excitement, stating that the future is bright with this transition.

With X’s massive reach and xAI’s AI capabilities, the merger is poised to redefine the role of artificial intelligence in social media. The coming years will reveal whether this move will truly transform X into a next-generation AI-powered platform or if it’s another bold experiment by Musk.