Elon Musk sells social media platform X to his AI startup xAI amid fraud lawsuit

From Cointelegraph

March 28, 2025 9:02 pm:

Billionaire Elon Musk sells social media platform X to his AI startup xAI amid a lawsuit accusing him of defrauding former Twitter shareholders. The deal values xAI at $80 billion and X at $33 billion, with Musk originally buying X for $44 billion in April 2022, including $12 billion in debt.

The transfer of ownership may expose xAI to more scrutiny as a US judge rejects Musk’s attempt to dismiss the lawsuit. Musk claims the acquisition of X by xAI will combine data, models, compute, distribution, and talent, unlocking potential for both entities.

Musk defends the deal, stating it will blend xAI’s AI capabilities with X’s reach to accelerate human progress. However, critics like Cochran claim Musk overpaid for X, resulting in an $11B loss and potentially harming xAI and X investors.

xAI is best known for its AI chatbot “Grok,” which Musk claims can outperform OpenAI’s ChatGPT. Musk’s motivation behind Grok is to create AI tools that empower research and innovation, despite criticism of Grok’s $80 billion valuation.

While some view the deal as shady, others believe Grok is a top model for various tasks. The acquisition raises questions about Musk’s strategy and the future of xAI and X under his leadership.

Read more at Cointelegraph: Elon Musk’s sale of X to xAI just made fraud lawsuit a ‘lot spicer’