Elon Musk at the 2025 Conservative Political Action Conference. Image: Gage Skidmore via Flickr (CC BY-SA 2.0)
X, which dramatically dropped in value when Musk took over, has started to recover due to his influential role in the new US government.
Elon Musk announced last Friday (28 March) that his artificial intelligence (AI) start-up xAI has acquired his social media platform X. In a post on his platform, Musk said that the combined companies will deliver “smarter, more meaningful experiences to billions of people”.
According to the post, this acquisition now values xAI at $80bn and X at $33bn. The Wall Street Journal reports that all shares of X and xAI will be exchanged for shares in a new holding company called xAI Holdings Corp. The company was created a day before Musk’s announcement and names him as president.
Moreover, the financial publication also reports that company executives believe placing X under the xAI umbrella will make it easier to raise money for the combined businesses.
Musk said the future of the two companies is “intertwined”, adding that the acquisition now combines their 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,” he said.
xAI’s products, including its AI chatbot Grok are already integrated into X, with many concerned about the AI clutter on the platform and its seemingly weak guardrails. However, this acquisition further connects the two, prompting some to raise concerns around data privacy.
“While X’s policy allows for public data to be used, many users may not realise their posts and images are feeding AI models,” said Adrianus Warmenhoven, a cybersecurity expert at NordVPN.
“The inclusion of publicly shared images in AI training is particularly concerning. Photos often contain metadata, facial features or sensitive details that could be misused. Without clear safeguards, this could lead to unintended consequences,” the expert added.
Moreover, Warmenhoven pointed out that training AI models on X content reduces the reliability of Grok’s outputs.
X’s current valuation at $33bn is lowered from its enterprise value of $45bn, considering the company has $12bn debt, Musk elaborated in his post.
He purchased X – then known as Twitter – for $44bn in late 2022, in what can only be described as a messy deal. Since then, the company’s valuation dropped significantly. Fidelity – the mutual fund which helped Musk purchase X – estimated in 2023 that the company’s valuation was 71.5pc lower than what it was initially purchased for.
However, Musk, who has close ties with US president Donald Trump and leads the controversial US Department of Government Efficiency, has been able to bring up the company’s valuation significantly in recent months, largely because investors now view Musk as more influential due to his political connections.
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Elon Musk at the 2025 Conservative Political Action Conference. Image: Gage Skidmore via Flickr (CC BY-SA 2.0)
Updated, 10:25am, 31 March 2025: The article was updated to include comment from a NordVPN expert.
