Elon Musk announced Friday that his artificial intelligence company xAI has acquired social media platform X (formerly Twitter) in an all-stock transaction valued at $45 billion, including $12 billion in debt [1,4].

The deal values xAI at $80 billion and X at $33 billion, marking a significant discount from the $44 billion Musk paid for Twitter in 2022 [9,11]. The transaction will merge the two privately-held companies under a new holding company called xAI Holdings Corp [4].

'xAI and X's futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,' Musk wrote on X [1]. 'This combination will unlock immense potential by blending xAI's advanced AI capability and expertise with X's massive reach.'

The merger formalizes an existing relationship between the companies - xAI already uses X's data to train its AI models and provides its Grok chatbot to X's paying subscribers [1,4]. According to Musk, X has over 600 million active users [16].

The deal comes as X shows signs of recovery, with projections indicating its first year of advertising revenue growth since Musk's takeover. Research firm Emarketer forecasts $1.31 billion in U.S. advertising sales for 2025, a 17.5% increase [16,19].

Saudi Arabian investor Prince Alwaleed bin Talal, the second-largest investor in both companies, supported the merger, stating the combined value of his investments is expected to reach between $4-5 billion [34].

The announcement coincides with Musk's expanding role in the Trump administration, where he serves as head of the Department of Government Efficiency (DOGE). In a Fox News interview aired Friday, Musk claimed his companies are 'suffering' due to his government work [35,36].