Elon Musk announced Friday that he sold social media site X in a $33 billion all-stock deal to his own AI startup company, xAI
The tech billionaire shared the news in a statement posted on X, writing, “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,” Musk, 53, wrote in his announcement.
“The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge,” he added.
Musk said that the merger of X to xAI will “allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
Both X and xAI are privately held, which means they are not required to disclose their finances to the public.
The Tesla and SpaceX CEO said the deal values xAI at $80 billion and X at $33 billion.
It’s not clear if the sale will change anything for X users — xAI already uses data from X user posts to train its artificial intelligence models and paying X users have access to its AI chatbot, Grok.
Musk bought X, then called Twitter, for $44 billion in 2022, gutted its staff and changed its policies on hate speech, misinformation and user verification and renamed it X.
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“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a press release at the time.
A year later, Musk launched xAI, which he says “has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale.”
In March 2023, Musk founded the artificial intelligence company, xAI, to compete with OpenAI, the maker of ChatGPT.
The startup centred in the San Francisco Bay Area hired a group of top AI researchers who formerly worked at OpenAI, Google, Microsoft and Tesla.
Musk was a co-founder and early funder of OpenAI who parted ways with the San Francisco-based research lab several years ago. He’s grown increasingly critical of OpenAI as it’s gained global prominence and commercial success with last year’s release of ChatGPT and solidified its financial ties to Microsoft.
In April 2023, Musk told Fox News host Tucker Carlson that OpenAI’s popular chatbot had a liberal bias and that he planned an alternative that would be a “maximum truth-seeking AI that tries to understand the nature of the universe.”
He said he planned to create an alternative to the popular AI chatbot ChatGPT that he called “TruthGPT.”
The idea, Musk said, is that an AI that wants to understand humanity is less likely to destroy it. He also said that he was worried that ChatGPT “is being trained to be politically correct.”
Musk also advocated for the regulation of artificial intelligence, saying he’s a “big fan.” He called AI “more dangerous” than cars or rockets and said it has the potential to destroy humanity.
More recently, Musk said he would abandon his $97.4-billion offer to buy the nonprofit behind OpenAI if the ChatGPT maker dropped its plan to convert into a for-profit company.
“If OpenAI, Inc.’s Board is prepared to preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion, Musk will withdraw the bid,” lawyers for the billionaire said in a filing to a California court on February 10.
“Otherwise, the charity must be compensated by what an arms-length buyer will pay for its assets.”
Musk and a group of investors made their offer earlier in February, in the latest twist to a dispute with the artificial intelligence company that he helped found a decade ago.
OpenAI is controlled by a nonprofit board bound to its original mission of safely building better-than-human AI for public benefit. Now a fast-growing business, it unveiled plans last year to formally change its corporate structure.
Musk and his own AI startup, xAI, and a consortium of investment firms want to acquire the nonprofit’s controlling stake in the for-profit OpenAI subsidiary.
OpenAI CEO Sam Altman quickly rejected the unsolicited bid in a post on social media, writing, “no thank you but we will buy twitter for $9.74 billion if you want.”
He also addressed the bid in February at the AI Action Summit in Paris, saying, “OpenAI is not for sale. The OpenAI mission is not for sale.”
“Elon tries all sorts of things for a long time. This is this week’s episode. I think he’s probably just trying to slow us down,” Altman said, referring to Musk.
“He obviously is a competitor. He’s working hard and he’s raised a lot of money for xAI and they’re trying to compete… I wish he would just compete by building a better product but I think there’s been a lot of tactics.”
—With files from The Associated Press
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