Elon Musk, the CEO of Tesla and an advocate for launching spacecraft to Mars, has finalized a deal he believes will streamline his corporate operations. On Friday, he announced the sale of X, formerly known as Twitter, to his artificial intelligence startup, xAI. Both entities will now function under a new company controlled by Musk.
Musk disclosed that the transaction was valued at $113 billion, with $80 billion attributed to xAI and $33 billion to X. In his announcement, Musk had valued X at $45 billion, prior to accounting for $12 billion in outstanding debt.
X was acquired by Musk in 2022 for $44 billion and has since become a platform for controversial discussions, often initiated by Musk himself. During the 2024 election campaign, the site featured significant pro-Trump content and continues to highlight Trump’s initiatives and political views. Musk stated that X now has 600 million active users.
Despite its active user base, X has faced valuation challenges. According to The New York Times, X’s value had decreased to $12 billion in January, a figure based on data from Fidelity Investments, which had assisted Musk in the original purchase. It remains uncertain if this valuation accounts for X’s debt.
In March, X raised $900 million from investors at a valuation slightly exceeding its initial acquisition price, as reported by The Wall Street Journal. Nonetheless, X has struggled to generate revenue post-acquisition. In January, Musk informed employees that the company’s revenue was “unimpressive” and that it was “barely breaking even.” By early March, it had difficulty meeting its first-quarter ad-revenue targets.
X and xAI are already collaborating, with intertwined futures, according to Musk. They share resources, including software engineers, and a portion of X’s revenue is derived from xAI. The Wall Street Journal reported that all shares of X and xAI will be consolidated into a new entity, xAI Holdings Corp., with Musk as president. This company is registered in Nevada.
Musk created xAI to contend with OpenAI, the artificial intelligence lab he co-founded, which developed ChatGPT software. Musk has sued to prevent OpenAI from becoming a for-profit entity, and the case is scheduled for trial in the fall.
Most of Musk’s business ventures, including SpaceX, Neuralink, and the Boring Company, remain privately held. The Boring Company is currently in early development of a major tunnel project in Las Vegas to mitigate traffic congestion.
Meanwhile, Tesla shares have been affected by investor concerns over declining sales and Musk’s close association with President Trump. The shares dropped 3.5% on Friday to $263.55, down 34.7% in 2025 and 46.1% from their 52-week high of $488.54 on December 18. The shares reached a low of $222.15 on March 10.
Musk is also heading the so-called Department of Government Efficiency, striving to reduce federal spending and its workforce, although this department has not been officially sanctioned by Congress.