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Elon Musk’s AI Group xAI Purchases Social Media Platform X for $45bn
Elon Musk’s artificial intelligence group xAI has purchased social media platform X for $45bn, as the billionaire entrepreneur brings together two of his flagship businesses.
"MxAI and X’s futures are intertwined," Musk said on Friday evening, adding that he would be combining the data, models, computing power, distribution, and talent of the two companies.
The deal announced on Friday values X slightly above the $44bn price that Musk paid to take the company private in October 2022 and comes after a $1bn fundraising round this month.
Rebound in Fortunes for X
The deal highlights the rebound in fortunes for X, which slumped following Musk’s takeover as advertisers pulled their spending from the platform citing concerns over his hands-off approach to moderation.
Lender Debt
A group of seven Wall Street banks have also sold almost all the $12.5bn of loans Musk used to finance his takeover of Twitter, which he later renamed X, in 2022.
Investor Interest
Investor interest in the loans improved in the weeks following Donald Trump’s election victory in November, given the billionaire’s proximity to the new administration as a confidant of the president and the head of the so-called Department of Government Efficiency intent on cutting government red tape.
Investors in X
Investors in X include Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments. Sequoia, Andreessen Horowitz, and Fidelity are also investors in xAI.
Deal Structure
The deal was forged in part to help Musk establish a value for his privately held businesses. They added that Musk’s main outside investors had supported the transaction, which had been in the works for months, and expected it would provide greater clarity on how the two groups operate in tandem.
Conclusion
The deal between xAI and X is a significant development in the world of technology and social media. It highlights the growing importance of artificial intelligence in shaping the future of these industries.
FAQs
Q: What is xAI?
A: xAI is Elon Musk’s artificial intelligence group, which was launched in 2023 to "understand the true nature of the universe" and challenge the dominance of Sam Altman’s OpenAI.
Q: What is X?
A: X is a social media platform that was previously known as Twitter, which Elon Musk purchased in 2022.
Q: What is the deal structure?
A: The deal was structured as an all-stock deal, valuing xAI at $80bn and X at $45bn.
Q: Who are the investors in X?
A: Investors in X include Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments.
