In a $33 billion stock agreement, Elon Musk sells X to his own AI startup, xAI.

What is the goal of the combination between X and xAI?

The backstory: Musk said in a post on X that the deal will “unlock immense potential” by fusing X’s enormous user base and distribution reach with xAI’s cutting-edge artificial intelligence capabilities. He highlighted a future when both platforms exchange data, models, computing power, and product creation.

A year after purchasing Twitter for $44 billion and rebranding it as X, Musk introduced xAI in 2023. Grok, an AI chatbot that is already integrated into X for paying customers, is xAI’s flagship product. Additionally, the business has trained its language models using data from X posts.

In the deal, Musk valued X at $33 billion and xAI at $80 billion. Since they are privately held, neither is obligated to provide financial reports to the public.

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