Elon Musk, Tesla CEO and owner of the newly formed AI startup xAI, announced a deal to sell his social media platform X (formerly Twitter) to xAI for a total value of $113 billion. The sale consists of $80 billion for xAI and $33 billion for X.
Musk acquired X in 2022 for $44 billion and has since turned it into a hotbed of controversy, often fueled by his own content. The platform had struggled to generate revenue since Musk’s acquisition and was reported to be “barely breaking even” by employees. Despite this, the valuation of X sank to $12 billion in January.
The deal marks a significant shift for Musk, who has been focusing on expanding his business empire beyond X. He is also facing criticism from investors over Tesla’s declining sales and his personal relationship with President Trump.
As part of the agreement, all shares of X and xAI will be exchanged for shares in a new company, xAI Holdings Corp., registered in Nevada. Musk will serve as president of this new entity. The deal has been hailed as a rationalization move by Musk to simplify his corporate life.
Musk’s AI startup, xAI, is an artificial intelligence lab that competes with Open AI, which developed the popular ChatGPT software. Musk has sued to take over Open AI in the past, and the case is set to go to trial in the fall.
Source: https://www.thestreet.com/breaking-news/elon-musk-sells-x-mostly-to-himself