Elon Musk's xAI startup could soon be worth many times more than X
Anadolu
- Elon Musk's xAI is raising fresh funding at a $40 billion valuation, the WSJ reported.
- Social media network X, meanwhile, is currently valued at $9.4 billion, according to Fidelity filings.
- A Fidelity fund has devalued its shares of X by nearly 79% since 2022.
A new funding round in the works for xAI could value Elon Musk's startup at more than four times what his social media network, X, is currently worth, according to recent Fidelity filings.
The AI startup is reportedly in talks to raise funding at a $40 billion valuation, according to the Wall Street Journal. xAI, which Musk founded in 2023 and has billed as an alternative to OpenAI's ChatGPT, previously raised a $6 billion Series B from a16z and Sequoia Capital at a $24 billion post-money valuation.
Talks with investors are still in the early stages, sources told the Wall Street Journal. But if the funding round goes through at a $40 billion valuation, that would make xAI worth more than four times the value of X, according to Fidelity's estimates, which held steady from August to September.
Fidelity, which invests in startups through multiple mutual funds, including its Blue Chip Growth Fund, valued shares of X at $4,185,614 at the end of September, according to its monthly filing released at the end of October. The fund had 196,600 Class A shares at the end of July, according to an annual filing from August.
At $21.29 a pop, this price is unchanged from the Blue Chip Growth Fund's August estimation of X's value. It is, however, a 78.7% drop compared to two years ago: Musk in October 2022 purchased X for $44 billion. The Fidelity fund at the time invested $19.66 million, according to filings.
Assuming the investment was made at X's $44 billion valuation, the fund now estimates X's value to be around $9.4 billion.
Fidelity's Blue Chip Growth Fund also has a stake in xAI, valuing its investment at $44,152,362, according to the October filing. The fund had 3,688,585 shares at the end of July, according to an annual filing from August. That's $11.96 per share.