Elon Musk’s AI Company xAI Acquires Twitter / X

Elon Musk’s AI Company xAI Acquires Twitter / X 

Story Highlights:

• AI company xAI acquires X 
• xAI’s valuation is primarily speculative, based on future potential without definitive or proven revenue or profit thus far.
• Following Musk’s acquisition in 2022, X faced significant challenges, including advertisers leaving the platform.
• Several factors appear to have contributed to X’s recent valuation rebound.

Elon Musk’s tumultuous journey with X (formerly Twitter) takes another surprising turn as his artificial intelligence (AI) venture, xAI, acquires the social media platform in an all-stock deal valuing X at $33 billion. 

This valuation marks a significant recovery from a reported low of $12 billion but still falls short of the $44 billion Musk paid for the company in 2022. The move raises questions about whether Musk made a “losing deal” and the future trajectory of the intertwined entities of xAI and X.

In a tweeted announcement of March 29, 2025 on X, Elon Musk stated that “xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt)“. This development comes after a rollercoaster period for X’s valuation since Musk’s takeover three years prior.

X’s Valuation Swings: Following Musk’s acquisition in 2022, X faced significant challenges, including advertisers leaving the platform. This led to a sharp decline in valuation, with a report marking the value down by as much as 72% as of December 2024. Reports indicated that X’s valuation plummeted to a low of $12 billion.

However, recent reports suggest a substantial recovery. According to the Financial Times, a “secondary deal was carried out earlier this month” pushing X’s valuation back up to $44 billion, almost the same amount Musk paid for it. This recovery indicates a 70% plus jump in valuation. Interestingly, Bloomberg reported that Musk invested an additional $150 million in X last year at a valuation similar to the 2022 takeover price.

Factors Driving the Recovery: Several factors appear to have contributed to X’s recent valuation rebound. Notably, advertisers like Apple and Disney are reportedly resuming partnerships with the platform. Furthermore, cost-cutting measures implemented since Musk took over have improved the balance sheet.

The Financial Times highlighted that X’s EBITDA for last year stood at $1.2 billion, a stark contrast to the over $220 million loss Twitter posted in 2021. Previous profitable years for the company were 2018 and 2019, with earnings of $1.2 billion and $1.45 billion, respectively.

Musk also introduced revenue-generating initiatives such as the option to pay for a blue check mark and the AI model Grok, which have likely added to the bottom line. Moreover, Musk’s ties with former US President Donald Trump are seen as a potential advantage for X’s business prospects.

xAI Acquires X: A Strategic Move? The recent announcement of xAI, Musk’s two-year-old AI lab, acquiring X in an all-stock transaction is a significant development. The deal values xAI at $80 billion and X at $33 billion (accounting for $12 billion in debt).

Musk explained this strategic combination by stating, “xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach“. He believes this will lead to a platform that “doesn’t just reflect the world but actively accelerates human progress“.

However, xAI’s valuation is primarily speculative, based on future potential without definitive or proven revenue or profit thus far. It also remains unclear why the $12 billion debt remains on X’s books. Additionally, while X holds a $6 billion stake in xAI, the overall financial implications of this acquisition are still unfolding.