Elon Musk announced that his xAI startup had merged with his social networking platform X. This stock swap values xAI at $80 billion and X at $33 billion.

“xAI and X have a tightly knit future. Today, we are officially consolidating data, models, computing power, distribution channels, and personnel,” Elon Musk wrote on X.

He said the deal will combine xAI’s cutting-edge AI technology with the broad influence of X. The announced acquisition price is $45 billion, minus $12 billion in debt.

Both companies are private businesses run by Musk. This transaction is most likely a stock swap. Investors of X will receive xAI shares. The two companies share a number of major shareholders such as Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital and Kingdom Holding Co. of Saudi Arabia.

xAI and X have had a connection before, when xAI’s Grok chatbot was integrated into this social networking platform.

Elon Musk is also the CEO of Tesla and SpaceX. In 2022, he bought Twitter for about $44 billion. He then cut costs on a large scale and renamed the platform X. X CEO Linda Yaccarino said that “the future has never been brighter.”

Billionaire Elon Musk founded xAI less than two years ago with the goal of “understanding the true nature of the universe”. This company is competing with OpenAI – an AI startup that Musk co-founded in 2015. Musk later left OpenAI and has recently had many controversies with the company and with CEO Sam Altman.

In June, xAI announced that it would build a supercomputer in Memphis, Tennessee to train Grok. In September, Elon Musk revealed that part of this supercomputer called Colossus was operational.

Several environmental and public health organizations have expressed concern about the project’s pace of development in Memphis. They argue that this project lacks community consultation and close monitoring. The facility operates on natural gas turbines.

Last year, investors valued xAI at around $50 billion in a funding round. Last month, the press reported that xAI was negotiating to raise capital at a valuation of $75 billion. OpenAI recently completed a funding round with a valuation of $260 billion. Generative AI startup Anthropic was also valued at $61.5 billion in a recent deal.

In addition to running Tesla, SpaceX, xAI, and X, Elon Musk also spends a lot of time in Washington, D.C. He played a central role in President Donald Trump’s second-term administration. He was appointed head of the Department of Government Efficiency (DOGE). The ministry is tasked with cutting spending and eliminating cumbersome regulations. This position allows Musk to adjust policy in favor of his businesses.

This is not the first time Elon Musk has merged his two companies.

In 2016, Tesla acquired SolarCity for $2.6 billion. SolarCity was founded by Musk’s cousins Lyndon and Peter Rive and received funding from Musk. After this deal, Tesla shareholders sued Musk, alleging that this was a deal to rescue SolarCity. They argue that Elon Musk violated fiduciary duties and personal gain. However, the Delaware court ruled in favor of Musk and Tesla. The deal remains the same and there is no compensation.