On March 28, billionaire tech tycoon Elon Musk announced on X (formerly Twitter) that xAI, his artificial intelligence (AI) company, has acquired X in an all-stock transaction. The merger valued xAI at $80 billion and X at $33 billion while factoring in the latter’s $12 billion debt, Musk claimed.
“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 wrote.
While Musk founded xAI in March 2023, he acquired Twitter for $44 billion in October 2022 and rebranded it to X in July 2023.
Soon after, former Twitter shareholders brought a class action lawsuit against Musk, alleging that he didn’t disclose his initial investment in Twitter within a legally mandated period while he was acquiring a stake in the social media company. The delayed disclosure allegedly led to the shareholders losing money.
It is known as the Rasella v. Musk case. Musk asked to have the lawsuit dismissed. Notably, a judge ruled on March 28 itself that Musk must face the lawsuit.
Cinneamhain Ventures partner Adam Cochran claimed on X on March 28 that “Musk used his pumped up xAI stock to pay multiple times over value for X, but still take an $11B loss on the transaction, while screwing over xAI investors, and X investors and to sell your data to his own AI company.”
Cochran also claimed that the lawsuit “just got a whole lot spicer though,” as Musk has exposed his AI entity too.
xAI, which developed the AI chatbot Grok that is built into X, will now have direct access to data shared by more than 600 million active users of the social media platform.
