Musk Sold X To His Own Company Xai: Deal Done For ₹2.82 Lakh Crore, Bought In 2022 For ₹3.76 Lakh Crore

Elon Musk has sold his social media company X to his own artificial intelligence (AI) company xAI for $33 billion i.e., about Rs 2.82 lakh crore. This is an all-stock deal, which means that shares have been transacted instead of cash.

Musk said in a post on X – The future of xAI and X is intertwined. Today, we are officially taking steps towards bringing together data, models, computing, distribution and talent. This will open up immense possibilities by combining xAI’s superior AI capability and expertise with X’s large reach.

What will users get from the union of X and xAI?

X users can get a better, AI powered experience. Better content recommendation in real-time, catching fake news or answering user questions faster.

Understand the whole deal:

Background:

Elon Musk bought X (formerly known as Twitter) in October 2022 for $44 billion. As per today’s value, this amount is ₹3.76 lakh crores.

xAI was started by Musk in 2023, which aims to increase our understanding of the universe through AI. The company has developed advanced AI models like Grok.

Deal structure:

This is an “all-stock” deal, that is, xAI has used its shares to buy X, and not paid cash. This will give X investors shares in xAI.

X’s value has been fixed at $33 billion, which is derived by deducting $12 billion of debt from its total value of $45 billion. xAI is valued at $80 billion.

33 billion dollars i.e., 2.82 lakh crore rupees. 45 billion dollars i.e., 3.85 lakh crore rupees. 12 billion dollars i.e., 1.03 lakh crore rupees.

Purpose:

Musk has done this to combine xAI’s advanced AI technology with X’s large user base (more than 60 crore active users).

Using X’s data, xAI will be able to train its AI models (such as the Grok chatbot) more easily.

Musk claims that this combination will “accelerate human progress” and strengthen his core mission “to discover truth and advance knowledge”.

Effect:

For Musk: This deal will connect Musk’s business empire, which will increase collaboration between his companies.

For people: Musk claims that this will give billions of people a smarter and more meaningful experience.

Musk bought Twitter on 27 October 2022 for $44 billion (current value – ₹3.76 lakh crores). After this, he made many other changes including changing the name of the platform to X.

1. More than half the employees fired

After buying Twitter on 27 October 2022, Musk first fired four top officials of the company. These included CEO Parag Aggarwal, Finance Chief Ned Segal, Legal Executive Vijaya Gadde and Sean Edgett. When Musk took over the command of X, it had about 7500 employees, but now only about 2500 are left.

2. Unblocked many blocked accounts

In November 2022, Musk unblocked many blocked accounts including former US President Donald Trump. He had conducted a poll on X regarding Trump’s return. He had asked, should President Trump’s account be restored. Yes or no. More than 1.5 crore users participated in the voting and 52% of the people answered yes.

3. Blue subscription service launched

On December 12, 2022, Elon Musk launched Blue subscription in some countries for $ 8 per month. In February 2023, it was launched in India for Rs 650 for web users and Rs 900 per month for mobile. It offers many features including blue tick, long video posts. Musk later changed the name of this service from Twitter Blue to X Premium.

4. Removed legacy blue check marks

On April 20, 2023, Musk removed all legacy blue check marks from his platform. The blue check mark was previously reserved for verified accounts of politicians, celebrities, journalists and other public figures. Musk added it to the subscription service. Now users with subscription get blue checkmark only after review by Twitter’s team.

5. Character limit increased, limit to read posts

Musk has increased the character limit of posts from 280 to 25,000. When this company was formed, the character limit was 140. A limit has also been applied to read posts. Verified users can read only ten thousand posts in a day. Unverified users can read one thousand posts, while new unverified users can read only 500 posts daily.

6. Linda Yaccarino made the CEO of the company

On June 5, 2023, Linda Yaccarino joined as the CEO of the company. Earlier she was the Chairman of Global Advertising and Partnerships at NBC Universal. Linda was made the CEO of the company by Musk. Before Linda, he himself was handling this responsibility.

7. Changed the name and logo of the platform to X

On July 24, 23, Elon Musk made the biggest change by changing the name and logo of ‘Twitter’ to X. On changing the name, Musk had said- Twitter will provide all kinds of financial services in the coming months. In such a situation, the name Twitter has no meaning. At the same time, CEO Linda Yaccarino said- AI powered ‘X’ will connect us in ways that we are just beginning to imagine.

8. Video upload limit increased

Elon Musk has increased the video upload limit on X. Premium users can upload videos up to 4 hours. The limit for non-premium users is 140 seconds. X introduced short video feature. A dedicated “Videos” tab has been added.

Read Also:

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