Musk’s xAI Buys X at $33 Billion Valuation — What It Means for Investors

Tech billionaire Elon Musk has announced that his artificial intelligence start-up, xAI, has acquired social media platform X (formerly Twitter) in an all-stock deal. According to Musk, X was valued at $33 billion, excluding $12 billion in debt ($45 billion in total), while Grok chatbot maker xAI was valued at a whopping $80 billion.

"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 capabilities and expertise with X’s massive reach," Musk said in a post on X.

At $45 billion, X's valuation is about $1 billion more than when Musk bought it as Twitter in 2022. Following the deal, he fired thousands of microblogging site staff, including its CEO at the time.

His takeover was followed by an advertiser exodus from the platform, which impacted the company's revenue as well as its market valuation.

In October 2024, America's Fidelity Investments, an investor in Twitter and later X, said the company's value had declined by nearly 80% since the acquisition, to around $9.4 billion.

In July 2023, Elon Musk rebranded Twitter as X, marking a significant shift in the platform's identity. He also renamed the holding company to X Corp, a wholly owned subsidiary of X Holdings Corp.

Earlier this month, Bloomberg reported that X had raised close to $1 billion in new equity funding, valuing the company at approximately $32 billion. Elon Musk himself reportedly participated in this funding round, which aimed to use part of the proceeds to reduce the company's existing debt.

X Crop Already Owns Part of xAI

xAI was founded by Elon Musk in Nevada on March 9, 2023, and is headquartered in the San Francisco Bay Area, California. In November 2023, xAI introduced the chatbot Grok on X. According to reports, many investors in X Corp and xAI overlap.

Later that month, Musk said in a post on X that X Corp investors would own 25% of xAI.

In December 2024, xAI secured $6 billion in a Series C funding round, bringing its valuation to approximately $50 billion. Investors included Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, and others.

In February 2025, reports indicated that xAI was seeking an additional $10 billion in funding, aiming for a valuation of $75 billion.

Saudi Arabian investor Prince Alwaleed bin Talal, who owns the investment company Kingdom Holding, said his companies are the second-largest investors in X and xAI.

"After this deal, the value of our investments is expected to reach between $4-$5 billion... and the meter is running," he said in a post on X.