xAI → X Corp
Elon Musk merged X, the social network he had bought as Twitter for about $44bn, into his two-year-old AI company xAI in an all-stock swap that valued X at $33bn and xAI at $80bn — the first of two mergers between Musk companies that ended with both inside SpaceX within a year.
Musk's AI company absorbed the social network in an all-stock swap valuing X at $33bn and the combined business at $113bn.
- Value
- $33B
- Announced
- March 2025
- Completed
- March 2025
- Sector
- Technology
- Deal type
- acquisition
- Acquirer
- xAI (United States)
- Target
- X Corp (United States)
Why it mattered
The Twitter purchase of October 2022 had loaded the company with about $13bn of debt that the lending banks were left holding until 2025, and advertisers left: X's advertising revenue fell by $595m in 2024 alone, which SpaceX's later prospectus put down to the loss of advertising partners. Fidelity had valued the company at $15bn in May 2023. xAI, founded in March 2023 and the maker of the Grok chatbot, had been valued at about $50bn in a 2024 funding round.
Musk announced the deal in a post on X on 28 March 2025. X was priced at $45bn less $12bn of debt; each X share became 2.776 xAI shares, and both companies were put under a new holding company, X.AI Holdings. Musk's case was that the two businesses' "futures are intertwined" and that the merger would "combine the data, models, compute, distribution and talent", pairing xAI's models with X's reach. Because Musk held a controlling interest in both, the transaction was later accounted for as a reorganisation of entities under common control. The two shared many investors, including Andreessen Horowitz, Sequoia Capital and Fidelity, who swapped one private Musk holding for another.
What it left behind
The combined business lost money heavily. xAI raised $5bn of equity and $5bn of debt in July 2025, with SpaceX investing $2bn. In 2025 the AI segment — X plus xAI — earned $3.2bn of revenue and lost $6.4bn at the operating level, with research spending of $5.1bn. On 2 February 2026 SpaceX acquired xAI in a second all-stock deal that valued xAI at $250bn and SpaceX at $1tn, and X Corp stopped operating as a standalone business. SpaceX listed on Nasdaq in June 2026, xAI was renamed SpaceXAI in July, and in August SpaceX completed a $60bn purchase of Cursor, the AI coding company. When one person controls both sides of a merger, the valuation is declared rather than discovered; minority holders should judge it by the exchange ratio and by the next priced round.