Elon Musk says he has sold X to his AI startup xAI

Elon Musk said Friday that he had sold X, his social media company, to xAI, his artificial intelligence startup, in an unusual arrangement that shows the financial maneuvering inside the business empire of the world’s richest man.

The all-stock deal valued xAI at $80 billion and X at $33 billion, Musk said on X. X’s price was down from the $44 billion that Musk paid for the social media company in 2022, but higher than the $12 billion valuation that some of X’s investors have recently assigned it. The last valuation of xAI, at a December fundraising round, was about $40 billion.

Both companies are privately held and already share significant resources, such as engineers. A chatbot called Grok, made by xAI, is trained on data posted by X users and is available on X. Last month, bankers for X told investors that some of the social media company’s revenue came from xAI.

Musk wrote in his post that “xAI and X’s futures are intertwined.”

“Today,” he said, “we officially take the step to combine the data, models, compute, distribution and talent.” He added, “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.”

The deal shows how Musk can play with different parts of his business empire. In this case, he folded a company that had been losing value, X, into one that had been gaining value, xAI.

Linda Yaccarino, X’s CEO, wrote on X of the deal, “The future could not be brighter.” X declined to comment.

X and xAI have been on different trajectories. X is much more widely known, and Musk has used it as a battering ram to advance his political views, campaigning on the platform for President Donald Trump and whipping support for his governmental cost-cutting effort, known as the Department of Government Efficiency. But X’s financial outlook has declined since Musk bought the company.

In contrast, xAI has grown rapidly. The AI startup raised $6 billion from investors in December, valuing it at $35 billion to $40 billion, up from $24 billion in May 2024. The company has also put down roots in Memphis, Tennessee, where Musk has built what he says will be the world’s largest supercomputer.

This article originally appeared in The New York Times.

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