In a bold move to reshape his tech empire, Elon Musk has sold X Corp (formerly Twitter) to his artificial intelligence company, xAI, in an all-stock deal announced on March 28, 2025. The transaction values X at $33 billion and xAI at a staggering $80 billion, raising big questions about Musk’s strategy and what this means for both companies.
The Real Reason Behind the Sale
Musk described the sale as a game-changer, saying it would “unlock immense potential” by merging xAI’s advanced technology with X’s massive user base. This suggests a strategic plan to enhance AI-powered tools like Grok, xAI’s chatbot, which already learns from user interactions on X. The deal could give xAI a major advantage in the competitive AI landscape, where it battles industry giants like OpenAI.
A Financial Rescue Mission?
The sale also comes amid X’s financial struggles. Since Musk’s $44 billion takeover of Twitter in 2022, the platform has seen a steep drop in value—reportedly as low as $12.5 billion in late 2023—due to advertiser pullouts, staff reductions, and controversial policy shifts. By transferring X to xAI, Musk could be looking to stabilize his businesses, offset losses, and capitalize on xAI’s soaring valuation, which was pegged at $75 billion before the deal.
Political and Strategic Timing
Adding another layer of intrigue, the timing aligns with Musk’s growing influence in the Trump administration, where he now leads the Department of Government Efficiency (DOGE). His position may have strengthened investor confidence, making the deal more viable.
What’s Next?
While details about investor compensation and regulatory impacts remain unclear, one thing is certain—Musk is betting big on AI. By merging X with xAI, he’s not just saving a struggling platform; he’s creating a powerful ecosystem where artificial intelligence and social media go hand in hand.