Musk’s xAI Shakes the Tech World with $33 Billion X Takeover

Elon Musk’s artificial intelligence company xAI has sealed a monumental deal to acquire social media platform X for $33 billion, in what some are calling a watershed moment for AI and social media convergence. The transaction, which Musk insists places X’s value at $45 billion—despite skepticism from market analysts—has ignited debates about data privacy, misinformation, and the immense power that a single tech magnate now wields.

In Musk’s own words, “xAI has acquired X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt). Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale. X is the digital town square, where more than 600M active users go to find the real-time source of ground truth.” 

These lofty claims highlight Musk’s vision of merging cutting-edge AI capabilities with a global social media platform, generating significant excitement and concern.

Doubts abound, however, as critics point to the platform’s declining ad revenue and Fidelity’s valuation of X at $9.4 billion last year, raising questions about Musk’s stated $45 billion figure. Advertiser exodus following Musk’s contentious changes has only intensified speculation about X’s true worth. 

The reaction has caused a frenzy on Musk's “X”; with critics providing stern opinions on the deal with post critiques on Elon Musk's acquisition of X by xAI, raising concerns about user data privacy, as X's 600 million users may have their tweets and DMs used for AI training without clear consent, amid reported GDPR violation claims in Europe.

Others are discussing the refinance deal, not an ideological tech play:

The post references Mohammed bin Salman (MBS), Saudi Arabia's Crown Prince, who loaned Elon Musk billions in 2022 to buy Twitter, a deal that faced backlash due to Saudi Arabia's human rights record, including the 2018 killing of journalist Jamal Khashoggi.

The loan's repayment deadline coincided with the end of March 2025, suggesting Musk's acquisition of X by xAI was a strategic move to manage this debt, likened to "robbing Peter to pay Paul."

Yet for Musk, the bigger prize may be X’s rich repository of user-generated content, which could supercharge xAI’s model training and accelerate advancements in algorithmic technology.

Supporters of the deal argue it is a “necessary step” to remain competitive against giants like Google and Meta in the AI arms race. They see xAI’s supercomputer cluster, “Colossus,” as a formidable resource for creating more sophisticated AI models, potentially leading to innovations in content moderation, personalized user experiences, and new revenue streams. But concerns linger over data privacy and the ethical implications of AI trained on vast amounts of public discourse, especially when the platform’s owner is embroiled in a high-stakes rivalry with OpenAI.

The acquisition intensifies Musk’s rivalry with OpenAI, a competitor he once co-founded. After a rejected $97.4 billion bid for OpenAI in February 2025 and a failed lawsuit to block its shift to for-profit status, Musk is doubling down with xAI. The startup, valued at $75 billion after a $10 billion funding round last year, is expanding its Memphis-based “Colossus” supercomputer—the world’s largest, per Musk—to outpace rivals like OpenAI and China’s DeepSeek. For X users, little may change immediately; xAI already taps X posts for AI training, and premium users enjoy access to its Grok chatbot. Still, the merger amplifies xAI’s data advantage, potentially accelerating breakthroughs—or controversies.