The ownership of the social media platform X (formerly Twitter) has officially changed hands. As of March 28, 2025, X is no longer owned by Elon Musk. Instead, it has been acquired by artificial intelligence startup xAI, a company also founded by Musk. This move is making waves in the business and tech world, as it dramatically reshapes the structure of both companies.
The deal values xAI at a staggering $80 billion and X at $33 billion. However, the total valuation of X was originally set at $45 billion, with a $12 billion debt adjustment bringing it down to $33 billion. This financial maneuver has raised eyebrows, as it paints a different picture of the company’s worth.
This transaction means that X is no longer under X Corp, the company that had been its parent since March 2023. Instead, it is now a wholly owned subsidiary of xAI. The social media giant, with 600 million active users, now functions under the umbrella of the AI firm.
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Why This Move Matters
This ownership change has massive implications, particularly because of xAI’s rapid rise in the AI industry. The company was founded just two years ago by Musk, yet it has quickly positioned itself as one of the leading AI players in the world. Its latest creation, Grok 3, is an advanced AI chatbot that is already seen as a strong competitor to Google Gemini, OpenAI’s ChatGPT, Microsoft’s Copilot, and Meta’s AI initiatives.
With this acquisition, xAI gains access to X’s enormous user base. The 600 million people currently using X now represent potential users for xAI’s AI products, including Grok 3. This integration is expected to give xAI a significant advantage over its rivals in the AI industry.
The free tier of Grok 3 already includes features like DeepSearch and Think, capabilities that are more restricted in the free versions of competing AI models. This puts xAI in a strong position, as it can leverage its AI expertise while utilizing X as a distribution channel.
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The announcement of this merger also confirms that X’s operational structure remains intact. The company’s CEO, Linda Yaccarino, will continue leading X, while Musk is expected to retain a crucial leadership role as Executive Chairman and Chief Technology Officer (CTO).
The Financial Creativity Behind the Deal
One of the most intriguing aspects of this transaction is the financial structuring. xAI, a company founded just two years ago, is now valued at $80 billion, making it one of the highest-valued AI startups globally. This valuation is a result of its rapid expansion, technological advancements, and substantial investor backing.
Several major investment firms have already placed significant bets on xAI, including Sequoia Capital, Andreessen Horowitz, Fidelity, and BlackRock. These firms have contributed over $12 billion in funding to xAI, including a $6 billion investment in December last year.
Before this acquisition, it was believed that investors in X Corp held a 25% stake in xAI. However, this new deal has significantly changed the ownership structure. The details of how these shares have been restructured have not been disclosed yet, but this acquisition has undeniably increased Musk’s influence over both companies.
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A Strategic All-Stock Transaction
This move has also strategically shifted the control of X to xAI without requiring a traditional cash transaction. Instead, the deal has been structured as an all-stock transaction, which means ownership was transferred using shares rather than money. This approach allows xAI to take full control of X while maintaining its cash reserves for other business expansions and AI advancements.
This creative financial maneuver has further solidified xAI’s position as a dominant player in both AI and social media. The combination of cutting-edge artificial intelligence and one of the world’s most influential social media platforms creates a unique and powerful business entity.
The deal marks a major milestone in the industry, merging the potential of AI with the reach of a massive digital platform. The future of this combination will be closely watched, as it reshapes the competitive landscape of social media and artificial intelligence.
