Elon Musk’s Second Takeover of X
Elon Musk has once again acquired X (formerly Twitter), but this time through his artificial intelligence startup, xAI. The deal, finalized on March 28, 2025, creates a new entity called XAI Holdings, which now boasts a valuation of over $100 billion. This acquisition is expected to reshape the landscape of both AI and social media.
Why Did Musk Acquire X Again?
Musk’s decision to merge xAI and X primarily benefits his AI venture by securing direct access to X’s massive dataset. This dataset, consisting of billions of user-generated posts, provides valuable training material for AI models like Grok, xAI’s chatbot. Additionally, this merger allows Musk to prevent competitors from accessing X’s data, further solidifying xAI’s market position.
Financials of the Deal
- The transaction values X at $33 billion, excluding its $12 billion in debt.
- xAI was valued at $80 billion, a significant jump from its previous $50 billion valuation in November 2024.
- Investors in X now own shares in the AI-driven entity, potentially boosting their stakes in a more lucrative sector.
The Impact on X Users and Advertisers
Since Musk’s initial takeover in 2022, X has struggled with declining ad revenue and user engagement. The merger with xAI could provide new revenue streams through AI-driven features and deeper integration of Grok. However, it remains uncertain whether this transition will restore advertisers’ confidence or lead to further disruptions.
Leadership and Future of XAI Holdings
Musk has not yet announced the leadership structure for XAI Holdings. While Linda Yaccarino, the current CEO of X, has expressed optimism, her future role remains unclear. Musk himself may take the helm, potentially restructuring the organization to align with his vision of an “everything app.”
Will Other Social Media Platforms Follow Suit?
Musk’s move could trigger a trend where AI companies seek to acquire social media platforms for exclusive data access. AI-driven firms such as OpenAI, Anthropic, and Perplexity AI might explore similar deals to gain proprietary datasets and expand their AI capabilities.
Conclusion
Elon Musk’s strategic merger of X and xAI into XAI Holdings marks a significant shift in the intersection of AI and social media. Whether this move will revitalize X or further complicate its trajectory remains to be seen. However, with Musk at the helm, innovation and controversy are almost guaranteed.
