April 2, 2025
SAN FRANCISCO — In a groundbreaking move that has captivated both the technology and financial sectors, Elon Musk’s artificial intelligence startup, xAI, has acquired the social media platform X, formerly known as Twitter, in an all-stock transaction valued at approximately $113 billion. This merger, announced on March 29, 2025, is poised to redefine the landscape of social media and artificial intelligence integration.
Merger Details and Strategic Implications
The merger combines xAI’s valuation of $80 billion with X’s (formerly Twitter) valuation of $33 billion. Notably, both companies utilized a single set of advisers from Morgan Stanley and Sullivan & Cromwell, an unconventional approach for deals of this magnitude. This consolidation underscores the strategic importance of integrating proprietary data from X’s platform into xAI’s AI operations.
Legal Challenges Surrounding the Acquisition
The acquisition has not been without legal scrutiny. The U.S. Securities and Exchange Commission (SEC) is continuing a $150 million lawsuit against Elon Musk, alleging that he misled investors during his initial purchase of Twitter stock in 2022. The SEC contends that Musk failed to properly disclose his stake in the company, which had significant implications for shareholders.
Supreme Court Brief on User Data Protection
In a related development, X has filed a brief with the U.S. Supreme Court seeking to protect users from broad and suspicionless data requests by U.S. law enforcement. This action supports James Harper in his ongoing case against Coinbase, where he claims his trading data was handed to the IRS without proper warrants, violating privacy policies. X’s intervention highlights Musk’s stance against government censorship and his commitment to user privacy.
Implications for the Tech Industry
The merger between xAI and X is indicative of a broader trend where social media platforms and artificial intelligence companies seek to integrate their operations to leverage data more effectively. Observers suggest that this deal could set a precedent for future mergers and acquisitions in the tech industry, emphasizing the strategic value of data integration between social media and AI enterprises.
