The social media platform X (formerly Twitter) has undergone a significant ownership change in an all-stock transaction earlier today. Elon Musk is no longer the owner of X; instead, artificial intelligence startup xAI now holds full ownership. However, xAI itself is owned by Musk, making this transition more of a strategic restructuring than a complete change in control.
This deal values xAI at $80 billion and X at $33 billion—calculated from an initial $45 billion valuation, minus $12 billion in debt, as clarified by Musk. X currently boasts 600 million active users. Meanwhile, xAI, founded just two years ago, has quickly risen to prominence in the AI space, with its latest generative AI model, Grok 3, posing competition to industry giants like Google, Microsoft, OpenAI, and Meta.
“xAI and X’s futures are deeply connected. Today, we take a crucial step in merging data, models, computing power, distribution, and talent. This synergy will unlock tremendous potential by integrating xAI’s advanced AI expertise with X’s vast reach,” Musk shared in a post on X, his go-to communication platform.
A prime example of this integration is Grok 3’s deep involvement with X. The AI chatbot’s free-tier offering includes features like DeepSearch and Think, which remain limited in competing services such as Google Gemini, ChatGPT, and Microsoft Copilot. This provides xAI with access to X’s 600 million active users, enhancing its competitive standing against AI firms like Anthropic and Meta.
Musk envisions this merger as a way to create a smarter, more insightful digital ecosystem. “The combined company will deliver more meaningful experiences to billions while staying true to our mission of seeking truth and advancing knowledge. This platform won’t just reflect the world—it will actively accelerate human progress,” he stated.
X Becomes a Wholly Owned Subsidiary of xAI
With this shift, X is now a fully owned subsidiary of xAI, replacing X Corp as its parent entity. Previously, X Corp was established by Musk in March 2023 after acquiring Twitter, Inc.
Despite the restructuring, xAI remains a private company under Musk’s control. While its exact ownership details remain undisclosed, Musk is the majority stakeholder, with notable investors including Sequoia Capital, Andreessen Horowitz, Fidelity, and BlackRock. These firms have collectively invested over $12 billion in xAI, including a $6 billion funding round in December last year.
This move significantly strengthens Musk’s influence over both entities, consolidating AI development and social media operations under a single strategic vision.
Operationally, X continues to be led by CEO Linda Yaccarino, with Musk retaining his roles as Executive Chairman and CTO. The merger is expected to further integrate xAI’s AI capabilities within X’s ecosystem, particularly following the success of Grok’s integration.
Previously, X Corp investors reportedly held a 25% stake in xAI, but this acquisition has likely reshaped the ownership structure significantly.
