X ownership changes from Elon Musk to xAI, exhibits financial creativity

The ownership for social media platform X (formerly Twitter) has changed hands earlier today in an all-stock deal. Elon Musk is now not the owner of X, but instead, artificial intelligence startup xAI now owns X. xAI, for anyone who may have missed a fine detail, is owned by Elon Musk. It’s not very difficult to wrap one’s head around this unexpected development.

This deal values xAI at $80 billion and X at $33 billion (Musk clarifies this is a calculation of $45B and then reducing the $12B debt amount). X currently has 600 million active users. XAI was founded two years ago, and has quickly become one of the leading AI startup’s in the world in this time — the latest Grok 3 generative AI evolution, proficient enough to worry Google, Microsoft, OpenAI and Meta.

“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,” Musk details, in a post on X, his preferred communications methodology.

An example of intertwined futures is perhaps well represented by the importance of Grok 3’s integration within X — the AI chatbot’s free tier includes DeepSearch and Think, something that’s significantly restricted in Google Gemini, ChatGPT and Microsoft Copilot free tiers. This also gives xAI potential visibility across a 600 million active user base, as it competes with other AI companies, also including Anthropic and Meta.

Musk talks about a “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.”

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This shift means X is now a wholly owned subsidiary of xAI, rather than being under X Corp as it was before.

Decoding new structures at X and xAI

X is now fully owned by xAI following the acquisition announced earlier today, March 28, 2025. The deal has valued xAI at $80 billion and X at $33 billion (or $45 billion including $12 billion in debt). This marks a shift from X Corp, which was previously the parent entity of X, established by Musk in March 2023 as the successor to Twitter, Inc.

xAI remains a private company primarily controlled by Elon Musk, founded in March 2023. The company’s ownership percentages aren’t publicly detailed due to its private status, but Musk is the majority shareholder and considered the driving force. Other investors include venture firms like Sequoia Capital, Andreessen Horowitz, Fidelity, and BlackRock, who have participated in funding rounds totaling over $12 billion, including a $6 billion round in December last year.

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All things considered, this significantly increases Musk’s influence over the combined business entity.

Operationally, X continues under the leadership of CEO Linda Yaccarino, with Musk believed to be continuing as Executive Chairman and CTO. This merger would hope to leverage xAI’s AI capabilities (we’ve already illustrated a strong footing for the Grok chatbot, following its integration into X).

It is believed , X Corp investors held a 25% stake in xAI, but today’s deal to acquire will have changed this dynamic considerably.