The Musk Merger
How Elon Musk is reshaping AI, social media, and Washington—all at once
What does xAI's acquisition of X mean for Elon Musk’s business empire and its investors?
ICYMI: Who are the “Dirty 15” — top U.S. trade deficit partners in 2024?
xAI Absorbs X in $45 Billion All-Stock Deal
We’ve previously explored Elon Musk’s growing business empire—now, in a move that further tightens his hold over the intersection of AI, media, and political influence, Musk announced on Friday that his artificial intelligence start-up, xAI, has acquired social platform X (formerly Twitter) through an all-stock transaction. The deal, which values xAI at $80 billion and X at $33 billion (including $12 billion in debt), places the effective transaction size at $45 billion—deliberately surpassing the $44 billion Musk paid to take Twitter private in 2022.
The merger is not simply a financial manoeuvre, but a calculated effort to align two of Musk’s most powerful assets. "xAI and X’s futures are intertwined,” Musk posted, noting that the fusion would integrate “data, models, compute, distribution, and talent” to create a new ecosystem where AI and mass communication co-evolve. With over 600 million active users on X, the platform offers an unparalleled distribution network for xAI’s tools—particularly its chatbot Grok, already embedded within X’s infrastructure.
From Chatbot to Power Broker
Founded less than two years ago, by early 2025, xAI had firmly positioned itself among the top-funded AI startups in the United States, securing $12 billion in equity—placing it just behind industry giants OpenAI ($18 billion) and Databricks ($14 billion). This rapid ascent highlights xAI’s growing clout in the generative AI landscape.
Its latest model, Grok 3—released in February—has demonstrated competitive performance across benchmarks in mathematics, science, and programming. Perhaps more significantly, Grok has been integrated directly into the X platform, where it actively engages with user content. Its responses often echo Elon Musk’s anti-establishment tone, reinforcing his narrative against so-called “woke” culture and elevating xAI’s visibility far beyond that of a typical chatbot.
By fusing the AI engine with a real-time, large-scale data platform, Musk appears to be positioning xAI as a unique competitor. Unlike OpenAI, which relies heavily on licensed datasets and web crawls, xAI has direct access to the vast, ongoing user-generated content on X. This not only provides training advantages but also a real-time feedback loop for model development and deployment.
Musk has made clear that this merger is about more than synergy. It is, in his words, about “unlocking immense potential” by fusing AI capability with “massive reach”—a potential that becomes all the more potent in the context of his expanding influence in U.S. politics 😂.
Politics, Profit, and Power
Since assuming the role of head of the newly formed Department of Government Efficiency (DOGE) under President Trump’s second administration—following a $270 million political donation—Musk has significantly increased his leverage in Washington. The department, aimed at slashing government spending and regulatory red tape, effectively places Musk at the centre of policy decisions that directly impact his business empire, from Tesla and SpaceX to xAI.
The merger could also serve to streamline Musk’s attention and resources, which have been stretched thin across multiple ventures. Yet the political dimension cannot be ignored. With X increasingly used as a megaphone for pro-Trump messaging and as the de facto channel for White House updates, the line between Musk’s business interests and political activities is blurring rapidly. As a platform, X has seen a rebound in valuation—from a low point where Fidelity estimated it had lost 80% of its value, to recent figures suggesting it has recovered up to 30% of Musk’s original purchase price. The involvement of major brands like Amazon and Apple, now reportedly reinvesting in X, has further bolstered investor confidence.
📈 What does this mean for investors? For existing X shareholders, the all-stock swap offers exposure to the faster-growing AI sector via xAI. But the merger also concentrates power—and risk—in Musk’s hands. As regulatory and political pressure builds, investor returns will hinge not just on technology, but on how well Musk navigates the shifting AI-policy landscape.
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In Case You Missed It 📬
🔍Countdown to Tariffs: Trump’s Trade Blitz Incoming
President Trump is hours away from unveiling what could become the most sweeping set of U.S. tariffs in a century — with an announcement expected at 4pm local time today. The White House has confirmed the measures will take immediate effect, targeting “all countries,” with a focus on the so-called “Dirty 15” — nations with large trade surpluses and high tariffs on U.S. goods. That likely means 🇨🇳 China, 🇪🇺 the EU, 🇲🇽 Mexico, and more are in the crosshairs.
So far this year:
🔺 20% trade tax on Chinese imports
🔺 25% tariffs on global steel & aluminium
🔺 25% tariffs on non-USMCA goods from Canada & Mexico
Markets are on edge. The VIX fear index is creeping up, signalling investor unease and expectations of heightened volatility.
🇪🇺 Meanwhile, EU Commission President Ursula von der Leyen says Brussels has a “strong plan to retaliate” but still hopes for a negotiated off-ramp.
With the clock ticking, one question looms large: Is the global economy ready for another tariff storm?
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