Elon Musk made his second acquisition of the social media platform X, formerly known as Twitter. In an all-stock purchase that valued X at 33 billion dollars, excluding debt, Musk used his artificial intelligence business, xAI, to acquire his social networking platform on March 28. 

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The real question is: Why did Musk do this deal?

First and foremost, the xAI deal offers unexpected wins for X investors.

After more than two years of uncertainty following Musk's takeover, during which both users and advertisers fled the social network, the decision to merge the businesses is a win for X investors. They now have a stake in a young AI company with significantly more potential.

According to Musk, the new combined firm, xAI Holdings, is valued at 80 billion dollars after the latest deal, which is an increase from the valuation of about 50 billion dollars in November, when the firm previously raised investment.

Although unexpected, the two companies have collaborated extensively, sharing information and distributing Grok, xAI's chatbot.

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The question, though, is: What is the real value of X in xAI?

From a tech point of view, the exclusive dataset that xAI will have access to through X and its billions of user postings has garnered the majority of attention.

This implies that xAI has ultimate control over X's dataset and can refuse to license that to any other AI rivals. Meanwhile, X can assist xAI in reaching millions of customers with its Grok chatbot and other offerings. This is where Musk gains a brownie point for the deal.

Ai businesses have been known to devour private data sets. This is to train their AI systems and find methods to distinguish their chatbots from competitors. One company that generates hundreds of millions of dollars annually from AI licensing is reddit.

The firm has leased its vast collection of user material to Google. Other AI firms may consider purchasing other social networks to obtain their own exclusive datasets similar to xAI. While perplexity did propose a merger with TikTok US as a solution to keeping the Bytedance-owned service in America, the deal did not go through.

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(With inputs from the agencies)