Big news this morning in the tech industry, with the announcement that @xAI has acquired @X for $45B, however there is a $12B debt, making a net balance of $33 Billion.
Elon famously purchased Twitter (later renaming to X) for US$44 Billion, so despite the debt, it looks like they’ve returned the value above the purchase price in 2023.
xAI’s most popular product is Grok and version 3 has certainly done well in comparisons against competitors. Perhaps the most impressive thing xAI has accomplished is the rapid installation of hundreds of thousands of GPUs in a training cluster, even praised by Nvidia’s CEO.
Colossus is a 200k GPUs cluster. The first 100k were installed an running in 122 days, then doubled in 92 days.
In the announcement, we learn that xAI and X’s data, infrastructure and teams will be combined.
This combination is expected to unlock the potential of AI, with the the massive reach of social network X. The most insight into future product changes lies in the following statement.
The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge.
This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.
We know the X platform has been focused on rolling out new features to become ‘the everything app’ particularly leaning into X Payments that hasn’t yet launched.
This reference refers to other international platforms like WeChat that allows users to purchase items directly from the platform, so expect an eCommerce play as well.
There’s no doubt there’s going to be some massive benefits of sharing resources, including attracting talent that could move between both projects.
The announcement post also confirms x has grown to a user base of 600 Million active users, up from an estimated 450M around the time Twitter was acquired.
We know these users are active, but don’t know from this data how many are monetizable (mDAUs). If we assumed all were, we’d divide the total company valuation by the number of users. $45 Bil / 600M users means the price per user is $75.
I am a little surprised that X didn’t swallow xAI, instead the opposite is true, this makes you wonder if there are other acquisition targets in mind.
Elon has confirmed that xAI’s Grok LLM will be integrated into Tesla’s in the future as the voice assistant. xAI will also enter the gaming development industry, with one of the most obvious platforms for distributions being Tesla vehicles, particularly once FSD unsupervised is in place.
