X 'swallowed', creating new super company for Elon Musk

After more than 2 years of acquisition, billionaire Elon Musk merged social network X into company xAI. Photo: Reuters .

On the evening of March 28 (US time), Elon Musk said his startup xAI has merged with X, a social networking platform also owned by the billionaire, in an all-stock transaction. This transaction values ​​the AI ​​company at $80 billion and the social network at $33 billion . Musk said the purchase price is $45 billion minus $12 billion in debt.

"The future of xAI and X is intertwined. Today, we are officially taking the step to combine data, models, compute, distribution, and talent," the billionaire said on the X account. He added that the merger will "unlock enormous potential by combining xAI's advanced AI capabilities and expertise with X's massive impact."

Since both companies are private and fully controlled by Musk, the transaction is likely to be a stock swap, with X investors being paid in xAI shares. The two companies have several investors in common, including venture capital firms Andreessen Horowitz and Sequoia Capital, as well as Fidelity Management, Vy Capital and Saudi Arabia’s Kingdom Holding Co.

Musk acquired Twitter in a deal worth about $44 billion in late 2022. He made major cost cuts and soon renamed it X. After an initial period of direct management, Musk hired Linda Yaccarino as CEO of X in June 2023.

The Grok 3 model, which was released in February, is considered to be on par with leading AI models such as Claude 3.5 or GPT-4o. Photo: Jim Clyde Monge .

xAI was founded by Elon Musk in March 2023, with the stated goal of “understanding the true nature of the universe.” The startup has sought to compete directly with OpenAI, which Musk co-founded in 2015 as a nonprofit research lab. He later left OpenAI and has recently been in frequent public and legal disputes with the company and CEO Sam Altman over its direction.

At xAI, Musk’s team has developed large language models and AI software products, competing with those from OpenAI as well as Google, Microsoft, Meta, and others. X and xAI have been linked, with xAI’s Grok chatbot being integrated into websites and social media apps.

Investors valued xAI at around $50 billion in a funding round last year. Bloomberg reported last month that the company was in talks to raise money at a $75 billion valuation. OpenAI is close to closing a new round of funding at a $260 billion valuation, while startup Anthropic was valued at $61.5 billion in a deal completed this month.

This isn’t the first time Musk has merged two of his organizations. In 2016, Tesla acquired SolarCity for $2.6 billion . The solar installation company was founded by his cousins, Lyndon and Peter Rive, and is funded by Musk, who serves as chairman of the board.

In addition to running Tesla, SpaceX, xAI, and overseeing X, Musk has spent much of this year in Washington, DC, as a central figure in President Donald Trump’s second administration. After contributing nearly $300 million to Trump’s campaign, Musk was put in charge of the newly created Department of Government Efficiency (DOGE).

Source: https://znews.vn/x-bi-nuot-chung-tao-ra-sieu-cong-ty-moi-cho-elon-musk-post1541669.html