From Yahoo Finance: 2025-03-31 19:19:00

Elon Musk has acquired the social network formerly known as Twitter for the second time in three years. The all-stock deal values X at $33 billion, not including debt, with the joint entity called XAI Holdings worth more than $100 billion, not including debt. Musk’s decision to merge the businesses is a win for X investors.

The surprise deal is a win for X investors who have endured uncertainty since Musk’s takeover. The combination with xAI means X investors now own shares in a nascent artificial intelligence startup with more perceived upside. The merger raises questions about necessity and potential benefits, with many unknowns remaining about the new arrangement.

Musk announced the transaction on X, praising the ways both companies will help each other. The deal gives xAI control over X’s dataset and allows the company to refuse to license the data to competitors. X can help xAI distribute its chatbot and products to millions of consumers. However, these benefits were already in place, raising questions about the need for the deal.

The deal values X at $33 billion and xAI at $80 billion. Musk purchased X with xAI, both of which were represented by the same bank, Morgan Stanley. The acquisition allows X investors to shift their stakes from one company to another. The deal’s impact on X and xAI remains to be seen, with potential for tighter integration and collaboration between the two companies.

The acquisition reflects a trend of AI companies seeking proprietary datasets to train their systems. Companies like Reddit have licensed their data to AI providers for significant revenue. Other AI companies may seek to acquire social networks for unique datasets. The deal highlights the value of large language models in the AI industry. Smaller social media players may seek alliances with providers of large datasets to stay competitive.



Read more at Yahoo Finance: Musk’s XAI deal offers unexpected win for X investors