Elon Musk’s AI startup, xAI, is reportedly valued at $50 billion, which is $6 billion more than the $44 billion he paid for Twitter, now known as X.
As per a Wednesday report from The Wall Street Journal, xAI announced that it raised $5 billion in a funding round, boosting its valuation to twice what it was earlier this year.
This new valuation of $50 billion now exceeds the $44 billion Musk spent on acquiring Twitter in October 2022. In comparison, X was valued at just $9.4 billion in September, according to Fidelity, which has significantly written down its investment by 79% since the acquisition.
The Journal also noted that xAI had previously been in talks to raise funds at a valuation of $40 billion.
Since Musk’s takeover of Twitter in 2022, the platform has faced challenges, including a drop in advertising revenue due to major brands pulling ads, and difficulty in attracting advertisers back to the platform.
Outside of regular business hours, xAI representatives did not immediately reply to requests for comment.
Prominent investors like Sequoia Capital, Andreessen Horowitz, Valor Equity Partners, and the Qatar Investment Authority are anticipated to take part in the next investment round, according to people familiar with the situation who spoke to The Journal.
A16z and Sequoia Capital contributed $6 billion to xAI’s Series B round earlier this year, increasing its post-money valuation to $24 billion. The AI startup has now raised $11 billion in 2024 with this most recent investment.
In 2023, Musk established xAI, in part, in reaction to OpenAI, which he and Sam Altman co-founded in 2015. Following his departure from OpenAI in 2019, Musk has criticized the company’s departure from its charitable roots. In addition, he sued Microsoft and OpenAI this year, alleging anti-competitive behavior and the establishment of an artificial intelligence monopoly.
