When Elon Musk announced that his AI startup xAI had acquired X (formerly Twitter) in an all-stock deal, many were surprised. But the move makes strategic sense. xAI’s chatbot “Grok” is already integrated with X and the platform has been struggling financially. The merger reframes Musk’s $44 billion Twitter purchase as a step toward AI dominance rather than a risky gamble.

Investing in Musk’s ventures isn’t about quick returns it’s about believing in his long-term vision.

“All of Elon’s companies today are basically one company,”

said Yoni Rechtman of Slow Ventures. His companies share people, funding, and ideas making the xAI–X deal more of a formal alignment than a sudden shift.

The Power of the Musk Ecosystem

Ron Baron of Baron Capital believes that “every single thing [Musk] does is helping everything else he does.” From Tesla and SpaceX to Neuralink and The Boring Company, Musk’s ventures are tightly linked. Data from X can train xAI’s models, which in turn can enhance Tesla’s self-driving capabilities or assist SpaceX missions.

Major firms including Andreessen Horowitz, Fidelity, and Saudi Arabia’s PIF are invested across Musk’s companies, reflecting their belief in this interconnected empire. This explains why investors backed the xAI–X merger even with X valued at $33 billion and xAI at $80 billion, despite minimal revenue.

Gene Munster of Deepwater Asset Management said, “The reason why [Tesla’s] stock trades at 80 times earnings… is that people are making a bet on the long term.” His firm, invested in X, xAI and Tesla shows strong belief in Musk’s future impact.

Risks Ahead: Legal Battles and Leadership Concerns

Merging X’s real-time data with xAI’s tech has great potential, but also carries risks. Professor Dan Wang of Columbia Business School pointed to an SEC lawsuit against Musk claiming he misled investors while buying Twitter shares.

There are also concerns about privacy. X reportedly opted users into AI data collection without asking, now under investigation by Ireland’s DPC. Plus, future AI regulations in the EU and California could add pressure on xAI.

Another issue is Musk’s focus.

“Elon’s number one company has been the Trump campaign and his other projects have languished,”

Said Rechtman. Still, investors like Munster are unfazed. he said

“We’re betting the firm on the belief that AI is going to be more transformative than what people think,”

And for those invested in Musk’s world, there’s another incentive. “SpaceX is a real thing, and it will never go public,” said Rechtman.

“So the only way to invest in SpaceX is to get access to the tenders. And the only way to get access.. is to be in Elon’s good graces.”

What This Means for Users and Investors

While the xAI–X merger appears futuristic, users should understand its practical effects. For example, xAI’s chatbot Grok already live on X might soon offer smarter, more personalized experiences by learning from user behavior on the platform. However, this raises serious concerns about privacy and data usage especially since X opted users into AI training without direct consent. Ongoing investigations by Ireland’s DPC could lead to stricter policies or even fines.

The Interconnected Web of Musk’s Ventures

When you think of Elon Musk and the companies he’s builtNeuralink, XAI, Tesla and SpaceX the reactions vary. Some people come up with conspiracy theories, while others think he’s driven by political motives, but let’s focus on him as a business and tech visionary.

Musk has always been clear about his goal: to revolutionize the future. He envisions a world where SpaceX’s rockets, Tesla’s electric vehicles, xAI’s artificial intelligence, and Neuralink’s health tech come together in ways that can change humanity’s course. He’s not just dreaming; he’s actively trying to make it a reality.

Elon Musk wants to build colonies on Mars, an idea that once seemed like science fiction. It’s like imagining having a lightsaber from Star Wars. While he might not have grown up watching Star Wars, he’s inspired by space exploration movies and sees how Earth’s future could be in jeopardy in the coming centuries.

Risks and Regulatory Concerns

AI systems that pose a risk to safety or fundamental rights will be considered high risk and divided into two categories. One category includes AI used in products covered by the EU’s product safety laws, like toys, aviation, cars, medical devices and lifts. The other category includes AI in sectors like critical infrastructure, education, employment, public and private services, law enforcement, migration and legal assistance, which must be registered in an EU database.

These high-risk systems will be assessed before they enter the market and throughout their lifecycle and people will have the right to file complaints with national authorities..

The Advantage of Being in Musk’s Orbit

Still, one advantage of staying within Musk’s orbit is access. “SpaceX will never go public,” one investor said.

“If you want in, you need to be part of the inner circle.”

For many, that’s reason enough to ride the Elon waves despite the uncertainties.