Billionaire Elon Musk said his xAI artificial intelligence startup has acquired the X platform at a valuation of $33 billion, marking a surprise twist for the social network formerly known as Twitter.
“The combination values xAI at $80 billion and X at $33 billion,” he wrote in an X post on Friday. The X value is $45 billion when including $12 billion of debt, he said. It was an all-stock transaction.
“xAI and X’s futures are intertwined,” he said. “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.”
Musk, the world’s richest person, acquired Twitter for $44 billion in 2022, a transaction that included debt. After taking control of the platform, he slashed jobs, revamped features and allowed some banned accounts to return.
Read More: Musk Closes $44 Billion Twitter Deal, Fires Top Executives
He also has used the service to promote Grok, a chatbot developed by xAI. The startup is competing with AI firms such as OpenAI, which Musk co-founded before an acrimonious split with that company.
“This helps integrate the system quite nicely,” said Shweta Khajuria, a Wolfe Research analyst who views the deal as a positive for both of Musk’s businesses. “This gives Grok a unique advantage” by providing access to vast amounts of training data while also allowing xAI to control — or even cut off — that data flow to other companies.
Musk had previously canvassed potential investors for an xAI funding round at a valuation of about $75 billion, Bloomberg News reported in February. xAI investors have included Sequoia Capital, Andreessen Horowitz, Fidelity Investments and BlackRock Inc.
“Since its 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,” Musk said in the post.
X, meanwhile, “has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth,” he said.
The social network raised close to $1 billion in new equity from investors, Bloomberg reported this month, in a deal that gave the company a valuation in line with when Musk took it private in 2022.
The company also is on pace for its first year of advertising revenue growth since the Musk takeover. The company is projected to generate $1.31 billion in US advertising sales in 2025, an increase of 17.5%, according to research firm Emarketer. Globally, X’s ad sales are estimated to be $2.26 billion this year, up 16.5%.
X’s CEO, Linda Yaccarino, acknowledged the xAI deal in her own post on Friday, saying, “The future could not be brighter.”
This story was originally featured on Fortune.com