While tech giants scramble to stake their claims in the AI gold rush, Elon Musk has casually decided to merge his two-year-old AI startup with the social media platform he overpaid for in 2022. The all-stock deal, announced March 28, 2025, combines xAI and X for a whopping $113 billion valuation. Not bad for a company formerly known as Twitter that Fidelity recently valued at just $9.4 billion.
The merger values xAI at $80 billion and X at $33 billion. Let’s not forget X’s $12 billion debt load, a souvenir from Musk’s impulsive $44 billion Twitter shopping spree. This merger conveniently reframes that narrative. Smart move.
Musk’s vision? Blend xAI’s artificial intelligence with X’s 600 million active users. It’s a data goldmine meets distribution channel. The combination aims to accelerate “human progress” – whatever that means coming from the guy who named his kid using symbols from an alien language.
Blending AI with millions of users—a data buffet to advance humanity, whatever Musk’s alien-inspired definition entails.
The timing is interesting. xAI, founded just two years ago, has been gaining traction with its Grok chatbot, now on version 3. Musk’s been busy stockpiling high-end Nvidia chips like they’re Tesla cars. The startup hit a $50 billion valuation late last year, making this merger a significant value jump. The new Grok 3 now leverages 10 times the computation of its previous version, positioning it as a formidable competitor in the AI chatbot space. Musk emphasized this merger will enhance the capabilities and reach of both companies.
This sets up the tech world’s most awkward rivalry: Musk versus his OpenAI co-founder Sam Altman. There’s history there. Now Musk claims Grok 3 is “scary smart” and coming for ChatGPT’s lunch.
What does this mean for users? AI-driven social media experiences are coming. Whether that’s utopian or dystopian depends on your view of Musk, free speech absolutism, and content moderation.
For competitors in both AI and social media, this merger signals trouble. The combined data, compute power, and distribution create a formidable player overnight. The digital advertising landscape might never be the same. Buckle up – Musk’s internet takeover just shifted into high gear.
