Elon Musk said on Friday that he had sold X, his social media company, to xAI, his artificial intelligence start-up, in an unusual arrangement that shows the financial maneuvering inside the business empire of the world’s richest man.
The all-stock deal valued xAI at $80 billion and X at $33 billion, Mr. Musk said on X. X’s price was down from the $44 billion that Mr. Musk paid for the social media company in 2022, but higher than the $12 billion valuation that some of X’s investors have recently assigned it. The last valuation of xAI, at a December fund-raising round, was about $40 billion.
Both companies are privately held and already share significant resources, such as engineers. A chatbot called Grok, made by xAI, is trained on data posted by X users and is available on X. Last month, bankers for X told investors that some of the social media company’s revenue came from xAI.
Mr. Musk wrote in his post that “xAI and X’s futures are intertwined.”
“Today,” he said, “we officially take the step to combine the data, models, compute, distribution and talent.” He added, “The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge.”
The deal shows how Mr. Musk can play with different parts of his business empire. In this case, he folded a company that had been losing value, X, into one that had been gaining value, xAI. Mr. Musk previously made a similar maneuver in 2016, when he used stock of his electric car company Tesla to buy SolarCity, a clean energy company where he was the largest shareholder and his cousin, Lyndon Rive, was chief executive.
While Tesla is a publicly traded company that must disclose its finances and other information to shareholders, most of Mr. Musk’s companies are privately held and are more opaque. Those include the rocket manufacturer SpaceX, the tunneling start-up The Boring Company and the brain interface company Neuralink. Mr. Musk often moves resources and employees between his companies, defying traditional business norms and operating his various companies as one big Musk enterprise.
