Elon Musk likes to shake up his companies like a Rubik's Cube: in 2016, Tesla bought SolarCity, a company founded by cousins. This time, he decided to merge two of his toys: his artificial intelligence startup xAI and X (formerly Twitter), the social network he bought at the end of 2022.
Elon Musk brings his toys together
In a post published on Friday, he announced that xAI has acquired X for $33 billion, in an all-stock transaction. The result: a new entity dubbed XAI Holdings, valued at more than $100 billion (excluding debt).
In concrete terms, it's a game of exchanges between structures already in the billionaire's orbit. Morgan Stanley was the only bank involved, on both sides of the deal. According to Elon Musk, this merger "combines data, models, computing power, distribution and talent," a cocktail that should allow his AI ambitions to take a boost.
For a year, xAI has already been using content published on X to train Grok, his chatbot meant to rival ChatGPT. By buying the platform directly, the billionaire secures this access to data and, above all, makes it exclusive. "Grok brings the brains, X brings the distribution," summarizes analyst Gene Munster.
Beyond the technical ambitions, this operation also serves to breathe new life into X, whose stock market value has suffered since its acquisition by Elon Musk for $44 billion. The platform lost a good portion of its advertising revenue after the failure of content moderation and the proliferation of hate speech... sometimes propagated and amplified by the social network's owner.
But in recent months, X has raised nearly a billion dollars from investors, and advertising seems to be slowly picking up. Advertisers, who left with a bang, have quietly returned to curry favor with the man who has become Donald Trump's closest advisor.
By merging the two entities, Musk is seeking to give a more coherent image to his ecosystem, and to create a better-oiled machine between AI and social networking. It's also a way to align with a trend: analysts believe that other, smaller social networks could also move closer to AI startups to compete with giants like OpenAI.
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