Overview

• Elon Musk's AI startup xAI has merged with his social media platform X in an all-stock deal, creating a combined entity valued at $113 billion under xAI Holdings Corp.
• The merger leverages X's user data, claimed to include 600 million active users, to enhance xAI's AI development capabilities, including its Grok chatbot.
• The deal values xAI at $80 billion and X at $33 billion, marking a steep rise in xAI's valuation and a significant markdown for X from its 2022 purchase price of $44 billion.
• Critics have raised concerns about governance and potential conflicts of interest, with Musk controlling both companies and the same advisers representing both sides of the transaction.
• Existing investors, including Andreessen Horowitz and Saudi Arabia’s Kingdom Holding Co., express optimism about the merger's potential to position the combined entity as a leader in the AI and tech sectors.