Elon Musk has orchestrated a high-profile takeover of X through his artificial intelligence firm, xAI, in an all-stock transaction. The deal values xAI at $80 billion and X at $33 billion, sparking intense debate over whether these figures accurately reflect market realities or simply serve as a mechanism to manage Musk’s growing financial obligations.
Industry insiders point out that the transaction appears to rely on an elevated valuation for xAI to bolster the purchase price of X. By leveraging a higher worth for his AI enterprise, Musk could absorb a loss on the social media platform while positioning xAI as a key AI player.
One interpretation is that the merger centralizes control of user data from X, enhancing xAI’s ability to develop its flagship model, Grok.
Skepticism about Grok’s $80 billion valuation persists among observers who question whether a real-time data feed from X is sufficient to justify such a high figure.
Adding another layer of complexity is the detail that a portion of xAI shares was previously integrated into Twitter—now rebranded as X—in exchange for data access and revenue sharing. This arrangement implies that, within the newly announced $33 billion valuation for X, there is already a substantial amount of xAI equity.
Consequently, the actual worth attributed to X may be significantly lower than stated, highlighting the rapid descent from its original acquisition price of $45 billion.
A US judge recently denied Musk’s request to dismiss a lawsuit alleging he delayed publicly revealing his growing stake in Twitter, which may have affected shareholder interests. By merging X and xAI, the new entity could open itself to scrutiny regarding past transactions and public disclosures, potentially expanding the scope of ongoing litigation.
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