Elon Musk's AI startup, xAI, has acquired his social media platform X, formerly known as Twitter, in an all-stock deal, valuing xAI at $80 billion and X at $33 billion, Musk announced in a post on X Friday. The acquisition brings together two of Musk's most high-profile companies, further blurring the lines between his business ventures.

The deal values X at $33 billion, lower than its original purchase price of $44 billion in 2022, due to the company's $12 billion in debt. However, the valuation has fluctuated over the years, with Fidelity once valuing X at less than $10 billion. The platform's valuation has risen in recent months, largely due to its increased influence, with over 600 million active users.

xAI, founded in 2023, has been rapidly expanding its AI capabilities, hiring top researchers from Google DeepMind, Microsoft, and OpenAI, and building massive AI data centers. The startup has made significant progress, releasing Grok 3, a frontier AI model competitive with industry leaders, in February. xAI's valuation has now surpassed $80 billion, following a $6 billion funding round in December.

The acquisition provides xAI with access to X's vast repository of user-generated content, giving it a significant advantage in the AI training data race. X's large user base also offers xAI a consumer app to reach users directly. This move suggests that X's true value may lie in advancing Musk's broader AI ambitions, rather than its standalone social media platform.

Musk's history of blurring the lines between his companies has led to legal troubles in the past. This acquisition raises questions about the potential conflicts of interest and the implications for users' data and privacy. As Musk continues to expand his AI empire, it remains to be seen how this deal will impact the tech industry and the future of AI development.

The deal's structure involves the exchange of shares of X and xAI for shares of a new holding company called xAI Holdings Corp., according to The Wall Street Journal. Executives at both companies believed that it would be easier to raise money for a combined entity.

This acquisition also raises questions about Musk's ongoing feud with OpenAI, a startup he co-founded with Sam Altman. Musk is currently trying to thwart OpenAI's for-profit transition and submitted a $97 billion takeover bid in February, which was rejected by OpenAI's board. The move may have driven up the market price for OpenAI's assets, giving xAI an advantage in the AI race.

As the tech industry continues to evolve, this deal marks a significant shift in the AI landscape, with Musk's xAI emerging as a major player. The implications of this acquisition will be closely watched, as the boundaries between social media, AI, and entrepreneurship continue to blur.