Elon Musk merges social platform into xAI in $33 billion deal

Entrepreneur Elon Musk recently announced the merger of his artificial intelligence (AI) venture xAI with the popular social media platform X, which Musk acquired as Twitter for a hefty $44 billion in 2022. The tech mogul expressed the intertwined future of these two companies, revealing that xAI had clinched the acquisition of X for $33 billion, a significant decrease from the initial purchase price.

This all-stock deal valued xAI at a robust $80 billion, signifying a strategic move in Musk’s tech empire. Musk emphasized the consolidation of crucial aspects such as data, models, compute power, distribution, and talent between the two entities. Despite being privately held, both firms boast common major investors, prompting Musk to streamline resources, including leveraging X’s data to bolster xAI’s model training processes.

Grok, an essential chatbot feature of xAI, plays a pivotal role in X’s premium offering, elevating user experiences on the platform. Musk underlined the merged entity’s commitment to enhancing user experiences by delivering smarter and more meaningful interactions to billions of people while remaining steadfast in their core mission of truth-seeking and knowledge advancement.

Musk’s journey with X has been beset by challenges, exemplified by a recent legal setback. A US judge rejected Musk’s attempts to dismiss a lawsuit alleging that he defrauded former Twitter investors by withholding information about his initial investment in the social media giant. Manhattan-based US District Judge Andrew Carter ruled against Musk’s dismissal motion, indicating that claimants had valid grounds to assert fraud against the X chief.

The lawsuit alleges that Musk engaged in misleading practices by submitting an improper regulatory filing, making deceptive Twitter-related posts, and clandestinely accumulating shares in the platform before making a bid to acquire it. Specifically, plaintiffs led by the Oklahoma Firefighters Pension and Retirement System accused Musk of flouting an SEC deadline to disclose his 5% ownership stake in Twitter shares, culminating in delayed revelations about his subsequent 9.2% ownership interest.

While Carter didn’t pass judgment on the lawsuit’s substance, he did dismiss some claims within the class action suit. Moreover, Musk faces additional scrutiny from the US Securities and Exchange Commission regarding the acquisition, reflecting the intensified regulatory challenges surrounding his business endeavors.

Musk’s multifaceted tech empire, encompassing cutting-edge AI ventures and vast social media influence, illustrates the intricate landscape of modern entrepreneurship and the regulatory hurdles that often accompany such ambitious undertakings. With the merger of xAI and X, Musk continues to navigate the complex intersection of AI innovation, digital platforms, and regulatory compliance in the ever-evolving tech industry.