Musk's Oppenheimer Moment: How the xAI-X Merger Changes Everything

It's a breakthrough: xAI (the new AI startup from Elon Musk) has just acquired X (formerly Twitter), incorporating the combined entity under a new holding company, xAI Holdings Corp, valuing xAI at $80 billion and X at $33 billion.

The new move just concretizes strong synergies developed over 2 years. As highlighted by Musk, "xAI and X's future are intertwined. Today, we officially take the step to combine the data, models, compute, distribution, and talent. This combination will unlock immense potential..."

One year ago, I made a detailed analysis for the School of Economic War (EGE) of Musk's takeover of Twitter (now X), and the information war between Musk and Zuckerberg.

At that time, I insisted that while one could guess Musk envisioned innovative Twitter monetization perspectives (notably extending it into a super-app), the acquisition was less rooted in a business rationale than motivated by political influence ambitions, and probably by far-reaching perspectives on AI, which was on the edge of reaching what I called the 'Oppenheimer moment'.

One year later, Musk's underlying strategy unfolds at full scale:

• As expected, while X's CEO Linda Yaccarino claims that X is now nearing profitability thanks to its drastic 80% workforce restructuring, its pure social media economic model remains fragile. Even though it made progress toward the super-app strategy with creator feeds, ticketed spaces, audio and video calls, and upcoming payments, plus growing other sources of revenue such as new paid subscriptions and data resales, it has hardly compensated for a 50% drop in advertising revenue until now.
• Yet, X has been instrumental in the MAGA movement's success and in Trump's election, compensating for its limited reach with a disproportionate impact in the political arena, with leading influencers such as Tucker Carlson and Musk himself. All this contributed to elevating Musk as the unofficial tycoon of the new Trump administration and to his nomination to head the DOGE, a strategic power position at the very heart of the US hegemon.
• Most importantly, the synergy between X and xAI has progressively gone full-scale, with xAI being trained with X data and becoming a key asset in X's value proposition, contributing to making Grok the top-ranked AI model in February, as highlighted by the Chatbot arena.

This xAI and X merger makes xAI Holdings Corp a pioneering company of a new kind: simultaneously a real-time news media platform, AI advisor, and social network.

It's ahead of what Musk's rival, Mark Zuckerberg, is doing with Meta, as it connects to the very heart of leading political, media, and business circles. And it goes far beyond what Musk's other major rival, Sam Altman, is able to do with OpenAI or Stargate, as X directly links 600 million monthly active users with the most influential real-time data feeds, and already leads the AI supercomputing race today with Colossus.

Was this the plan from the very start? Not sure. As I underlined in my original article focusing on the fight between Musk and Zuckerberg, the Twitter acquisition went through a very bumpy road, even threatening Musk's reputation and fortune two years ago, as Tesla's difficulties are doing today. But if we must recognize something about Musk, it's his far-reaching intuition and creativity, with a great sense of pivot and opportunity. Very clearly, Musk's move is a chess master's play.

What might be the next step? Launch an "X phone," integrating it with Starlink to smartly "connect the world" - far beyond Meta's original dream? Extend it later with mass robotics through Optimus? Before - in a far future - being able to ultimately connect to the human mind with Neuralink?

More than ever, the AI race is accelerating. It's a race that only a very few players now have the resources to compete in within the West, each with different assets: Alphabet, Microsoft, Amazon, Meta, OpenAI, Apple... With Asian contenders - Alibaba, Baidu, ByteDance, DeepSeek, Huawei... - also rising fast (with DeepSeek already ranking #4 today in the chatbot arena, being open source and operating at a fraction of its competitors' costs). And European companies such as Mistral and Aleph Alpha also striving to catch up.

Even as industry and resources make a strategic comeback in our multipolar world, controlling the cognitive information space may be the most critical battlefield of tomorrow.

At our AI Oppenheimer moment, like for the nuclear race, the competition is on. As in other domains, in just two years, Musk has taken pole position.