Elon Musk Merges xAI with X (Twitter) to Combine Valuations of $113 Billion

posted by Sundance at CTH 

In an announcement on his Twitter (X) account, Elon Musk announces that xAI is purchasing X (Twitter) in an internal stock swap.  Twitter was valued at $33 billion, and xAI at $80 billion.

The remaining $12 billion in debt attributed to Twitter, can now be removed and paid to the debt holders without worry of the financial instability a repayment would generate. IMHO this was the motive.

Those who followed my research on Twitter financials, clearly understand how the platform needed to restructure.  The same people who organized the Twitter financing are the same people who just organized the merger.

As noted by The Wall Street Journal, “The new valuations were determined during negotiations between the two Musk arms, which both had the same advisers.”

The Twitter debt holders can now get repaid without impact to Twitter.  Note, by Musk’s own admission the debt within Twitter is the same today as it was on the original purchase date. No debt was paid down.

Elon Musk – “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 it’s 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 and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.

xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach. 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. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.

I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning.

Thank you for your continued partnership and support. (link)

I’m not going to spend much time on this other than to note CTH long-term analysis of the Twitter financial issue was 100% accurate, much to the chagrin of those who preferred to play a game of pretending.

Instead of a Twitter IPO approach to recover the financials and unload the debt, xAI was created – generated a stock valuation and then merged with Twitter.