Elon Musk’s artificial intelligence company, xAI, has announced its acquisition of X (formerly Twitter), marking a significant shift in the relationship between AI and social media, Axios reports.
The move highlights a broader trend in which AI-driven companies are increasingly shaping the future of digital platforms, while traditional social media networks struggle to maintain growth.
Musk’s decision to merge xAI with X reflects the changing landscape of the tech industry, where artificial intelligence is emerging as the dominant force. Investors have placed high valuations on AI companies, positioning them as key drivers of future innovation. In contrast, social media platforms—while still widely used—are now seen as mature businesses with limited growth potential.
Major players like Meta (Facebook, Instagram) and Google (YouTube) continue to generate substantial revenue from their platforms, but their long-term strategies are increasingly tied to AI advancements rather than social media expansion.
The acquisition also serves a financial purpose. X has faced revenue challenges since Musk’s $44 billion purchase of Twitter in 2022, with ad revenue declining and the company carrying significant debt. While cost-cutting measures have helped, X has struggled to reach its previous annual revenue levels of over $5 billion.
Meanwhile, xAI has seen rapid growth and investor enthusiasm, with a reported valuation of $80 billion despite modest revenue figures. Merging X with xAI allows Musk to reposition his social media platform within the AI sector, potentially increasing investor confidence and financial stability.
One of the key drivers behind this acquisition is data. AI models require vast amounts of information to improve their capabilities, and social media platforms provide a rich source of training data. xAI has already been using X’s content to refine its AI models, similar to how Meta and Google leverage user data to enhance AI-driven products.
Under xAI’s ownership, X’s role may shift further from a social network toward an AI-powered platform that prioritizes data collection and machine learning development. This could raise concerns among users about how their posts and interactions are utilized.
