Anadolu
Elon Musk's AI startup, xAI, has reportedly been valued at $50 billion — $6 billion more than what the billionaire paid to acquire Twitter, the social media platform now known as X.
The startup told investors it had raised $5 billion in a funding round that saw its valuation double from the spring, The Wall Street Journal reported.
The new valuation means xAI has surpassed the $44 billion Musk paid for Twitter back in October 2022. X was valued at $9.4 billion by Fidelity, one of its investors, in September. The firm, which invested $19.6 million in the social media platform, has written down the value of its investment by nearly 79% since 2022.
The Journal reported last month that xAI had previously been in talks to raise money at a valuation of $40 billion.
X has faced financial challenges since Musk took control of the company in 2022. The platform has seen a drop in advertising revenue after some major brands pulled their content from X, and the company has struggled to win back advertisers.
Representatives for xAI did not immediately respond to a request for comment, made outside normal working hours.
Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz are expected to participate in xAI's fresh funding round, people familiar with the matter told The Journal. Qatar's sovereign wealth fund and Qatar Investment Authority are also expected to be involved, per the report.
xAI previously raised a $6 billion Series B from A16z and Sequoia Capital at a $24 billion post-money valuation. The new round means the AI company has raised a total of $11 billion this year.
Musk founded xAI in 2023, partly to serve as an alternative to OpenAI, which the billionaire cofounded in 2015 alongside current CEO Sam Altman. Musk parted ways with the company in 2019 and has been publicly critical of its shift away from its nonprofit origins.
He sued the company this year, accusing OpenAI and Microsoft of creating an artificial-intelligence monopoly and engaging in "intensified" anti-competitive practices, citing "lavish compensation" offers as one example.
