Because both companies are privately held and controlled by Musk, the transaction likely amounts to a stock swap, with X investors getting paid out in xAI shares. The companies have a number of mutual investors, including venture firms Andreessen Horowitz and Sequoia Capital, as well as Fidelity Management, Vy Capital and Saudi Arabia's Kingdom Holding Co.
Musk, who's also CEO of Tesla and SpaceX, acquired Twitter in a deal valued at around $44 billion in late 2022, implementing massive cost cuts and soon renaming it X. Linda Yaccarino, who Musk hired as CEO of X, wrote in a post after Friday's announcement, "The future could not be brighter."