This post was originally published on this site.
It’s a crazy time on social media. Over the week, thanks to ChatGPT, AI-generated “Ghibli-fied” images flooded the internet after OpenAI sampled from the Japanese animation studio allegedly without consent. Now, Elon Musk’s own artificial intelligence company xAI bought social media platform X, formerly Twitter, for $33 billion in an all-stock deal.
A social media platform like X, which contains historic data in tweets spanning the past two decades, is a treasure trove for xAI to work on. Unlike Sam Altman’s OpenAI, which is notorious for allegedly flouting IP consent with the latest iteration of ChatGPT, xAI’s native LLM Grok now has a bigger playground to “sample” from—its own product, X.
When Elon Musk bought Twitter in 2022 for $44 billion, he went on a layoff spree—firing 75 per cent of its employees—and renaming it to X. One year later, the billionaire launched xAI—merging their fate, in principle.
And now, they have officially merged, with xAI opening itself to the massive reach of the social media platform.
“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 posted.
And historically, combining talent has always meant laying off more jobs.
This time, however, Grok and xAI—whose artificial intelligence capabilities have exponentially grown over the past two years—may take over more tasks from humans at X.
Apart from the layoffs, the fact that X and xAI are both private entities means they are not required to disclose their finances regularly, like listed companies. “The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt),” according to Musk.
Musk bought X for $44 billion. He now sold it to a company he owns at $33 billion, showing $12 billion debt and just $1 billion more in value appreciation. This means a $11 billion loss, and it could be part of a massive tax writeoff for the billionaire.
Specific information on this is yet to be revealed if and when the financials of both companies are made public.
The latest sale of X also brings into question the future of severance pay litigations against the social media platform. Back in December 2024, US Magistrate Judge Christopher Burke stated that X needs to face six out of the 10 claims from the 2023 million lawsuit where the social media platform was accused of breach of contract, severance pay exclusions, and wage theft, along with not providing enough advance notices of layoffs.
The other four claims alleging that X engaged in fraud and breached the merger agreement were to be dismissed.
So far, Elon Musk has managed to beat most lawsuits against him, and with this latest AI acquisition of X and his increased role in the US administration led by President Donald Trump, it remains to be seen what would be the fate of the once-revered microblogging platform, formerly known as Twitter.