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Musk merges X with xAI

Musk merges X with xAI

📉 Perplexity financially struggling?

Martin Crowley, Liam Lawson & Amanda Greenwood
March 31, 2025

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Monday’s AI Report

• 1. 🤝 Musk merges X with xAI
• 2. 💼 In partnership with Innovating with AI
• 3. 📉 Perplexity financially struggling?
• 4. ⛔ ChatGPT withdraws restrictions?
• 5. 🔒 In partnership with Incogni
• 6. ⚙️ Trending AI Tools
• 7. 🏗️ Practical AI Applications
• 8. 📑 Recommended Resources

Read Time: 5 minutes

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Musk merges X with xAI

🚨 Our Report

Elon Musk’s AI start-up, xAI, has bought his social media platform, X (formerly Twitter), less than three years after Musk originally acquired it, in “an all-stock transaction” in which shares in X and xAI will be exchanged for shares in a new holding company, called xAI Holdings.

🔓 Key Points

The ‘all-stock transaction’ values xAI at $80B and X at $33B (which is $12B less than the Enterprise value of $45B it had when Musk acquired it in 2022, due to accumulating deficits).
According to Musk, the deal will allow him to combine “the data, models, compute, distribution, and talent” of both companies to “build a platform that reflects the world” and “actively accelerates human progress."
Musk originally launched xAI in 2023 and has since poached top AI talent from Google, Microsoft, and OpenAI, and secured a historic $6B in funding to catch up and compete with his rivals.

🔐 Relevance

Musk is in an advantageous position as xAI has direct access to the large volume of posts that X has accumulated over the years, to train its AI models, and he can reach a large number of users through X (which he has stated has reached 600M, although experts have been quick to note that he didn't say “monthly active users”, which is believed to be half that).

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🚨 Our Report

Perplexity CEO, Aravind Srinivas, has directly addressed rumors that the AI search engine start-up is “doing horribly, financially,” taking to Reddit to reassure users and address their complaints about the product.

🔓 Key Points

Users think Perplexity is “making changes to cut costs,” using the launch of the Auto Mode feature—which auto-selects which model to use to answer a user's prompts—as an example of a cost-cutting measure.
Srinivas clarified that Auto Mode was a strategic move aimed at simplifying the interface, reducing the number of options— improving the user experience as a result, as “the user shouldn’t have to learn so much.”
He also defiantly stated that Perplexity has “all the funding” it’s raised and that its “revenue is growing,” confirming that, despite pressure, it has no plans of “IPO’ing before 2028.”

🔐 Relevance

By directly addressing these rumors and establishing there are no plans to go public with an IPO, anytime in the near future, Srinivas has undoubtedly boosted user, investor, and the broader tech market confidence and established that Perplexity’s focus is firmly on sustainable growth and innovation, rather than rushing into the public market.

After launching its new ChatGPT image generator (which went viral for its ability to generate the Japanese animation studio, Studio Ghibli, style images), OpenAI has changed its content moderation policies.
After previously blocking these requests for potentially being controversial and harmful, users can now ask ChatGPT to generate images of public figures, hateful symbols, and racial features.
OpenAI has shifted “from blanket refusals in sensitive areas to a more precise approach” which aligns with its wider goal to “un-censor” ChatGPT and allow it to handle more diverse perspectives and requests.

Is weakening ChatGPT’s restrictions a good or bad idea?

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