The acquisition assigns xAI a valuation of $80 billion, while X is valued at $33 billion, inclusive of $12 billion in debt. The merger is expected to facilitate the sharing of resources between the two entities, allowing X to leverage xAI's tools and technologies, and enabling xAI to utilize X's vast user data for training and refining its AI models.
Elon Musk, who acquired Twitter in 2022 for $44 billion and rebranded it as X, has been at the forefront of multiple ventures, including Tesla and SpaceX. The integration of xAI and X represents a significant consolidation within Musk's business empire, potentially enhancing the synergy between social media and artificial intelligence.
Despite the ambitious vision behind the merger, some industry experts have expressed skepticism. Former Twitter executive Bruce Daisley suggested that the deal might indicate an overvaluation in the AI market. Concerns have also been raised about potential regulatory scrutiny, given the consolidation of significant data and technological resources under Musk's control.
Investors with stakes in both companies, such as Prince Alwaleed bin Talal, have welcomed the merger, viewing it as a strategic alignment that could drive innovation and growth. The deal was advised by Morgan Stanley, highlighting the financial significance of the transaction.
X, under Musk's leadership, has undergone substantial changes, including a significant reduction in workforce and shifts in content moderation policies. These changes led to fluctuations in advertiser support and user engagement. However, recent reports indicate a stabilization and potential growth in advertising revenue, suggesting a positive trajectory for the platform.
xAI, founded by Musk in 2023, has rapidly advanced in the AI sector, developing models like the Grok AI chatbot. The merger with X is anticipated to provide xAI with access to real-time user data, enhancing its AI training capabilities and product offerings.
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