Latest news with #xAIHoldings
Free Malaysia Today
26-04-2025
- Business
- Free Malaysia Today
Musk's xAI Holdings in talks to raise US$20bil from investors
xAI acquired X in a deal last month that valued the social media platform at US$33 billion. (AP pic) NEW YORK : Elon Musk's xAI Holdings is in talks with investors to raise roughly US$20 billion in funding for his newly combined artificial intelligence start-up and social media business, Bloomberg News reported today, citing people familiar with the matter. The transaction would value the company at more than US$120 billion, the report said, citing one of the people. The amount in the round could be more than US$20 billion, the report said, adding that the total had not yet been decided, and terms could change. xAI didn't immediately respond to requests for comment. xAI acquired X in a deal last month that valued the social media platform at US$33 billion and allowed the value of Musk's AI firm to be shared with his co-investors in the company formerly known as Twitter.
Mint
26-04-2025
- Business
- Mint
xAI Holdings aims for $120 billion valuation with fresh $20 billion fund raise: Report
Elon Musk's xAI Holdings is in talks with investors to raise around $20 billion in a deal that would value the company at more than $120 billion, according to sources cited by Bloomberg. If the deal goes through, it would be the second largest funding round of all time, behind only OpenAI's $40 billion financing earlier this year. Notably, xAI Holdings was formed last month following the merger of xAI (the company behind popular chatbot Grok) and X (the social media platform formerly known as Twitter). Musk had bought Twitter at a valuation of $44 billion in late 2022, but sold the company to his own AI startup for $33 billion in March. 'This combination (of X and xAI) will unlock immense potential by blending xAI's advanced AI capability and expertise with X's massive reach.' Musk had said after the merger last month. Reportedly, xAI Holdings may use some of the new funding to pay down the debt that Musk took on when he took Twitter private. A previous Bloomberg report revealed that the debt was weighing on the social media company, even though its balance sheet is improving with stabilising advertising revenue and an optimistic investor outlook due to Musk's close relationship with US President Donald Trump. Last month, X paid about $200 billion in debt service, and annual interest expenses were more than $1.3 billion at the end of 2024. X's heavy debt has been a problem not only for the social media company, but also for the banks that helped Musk buy Twitter. However, since the creation of XAI Holdings, Musk and his colleagues have been reaching out to investors to put more money into the combined entity. Reportedly, the prospective round is currently in the early stages and the actual amount to be raised may even go beyond $20 billion. First Published: 26 Apr 2025, 01:51 PM IST
Forbes
02-04-2025
- Business
- Forbes
Elon Musk Scores $33 Billion In Self-Serving Merger
Elon Musk speaks at the Milken Institute's Global Conference at the Beverly Hilton Hotel on May 6, 2024 in Beverly Hills, California. Getty Images On Friday evening, Elon Musk announced on his social media company X that xAI, his artificial intelligence startup, had bought X in an all-stock transaction. According to Musk, the deal values the newly combined company called xAI Holdings at $113 billion. The move to combine X and xAI invites criticism, given that Musk controls both companies. It also doesn't help that X has struggled since he took the company private in 2022. Among those struggles: an exodus of bluechip advertisers and a slump in revenue. 'Elon Musk is opportunistically using the very high valuation he has for his xAI business in order to make his investors in Twitter whole,' says Gil Luria, an analyst at D.A. Davidson. 'Elon is the controlling shareholder of xAI, he's the controlling shareholder of the company formerly known as Twitter, so he gets to make that decision.' Investors in X aren't complaining. The new deal values the social media company at $33 billion net of debt, or $45 billion overall, which is $1 billion more than what investors initially paid for Twitter back in 2022. What's more, investors in X are swapping their shares for a piece of the combined entity that will include the artificial intelligence business, which is far more valuable. Founded in 2023, xAI has already raised more than $12 billion from investors, who have helped finance the creation of a massive supercomputer cluster in Memphis with over 100,000 Nvidia GPUs. The pending merger values xAI at $80 billion, or $30 billion more than the $50 billion valuation from the company's last outside funding round in November (which was already more than double the $24 billion valuation from xAI's prior funding round in May 2024). 'This is a historic deal,' Saudi billionaire Prince Alwaleed Bin Talal Alsaud, whose investment firm Kingdom Holding Company is a major investor in both X and xAI, boasted on X. 'After this deal, the value of our investments is expected to reach between 4 and 5 billion dollars, i.e. between 15 and 20 billion riyals, and the meter is running, thank God.' Nobody benefits more from the merger than Musk himself. When Forbes locked in his net worth at $342 billion for the annual World's Billionaires list (which was published yesterday), his estimated 74% stake in X was valued at $7 billion while his estimated 53% stake in xAI was worth $26.3 billion. Now his estimated 59% stake in the newly combined xAI Holdings is worth $66.4 billion. That's double the combined value of his stakes prior to the merger. His net worth is now $374 billion. What makes this even more of a sweetheart deal for Musk is the fact that X's finances last year were mixed. A February report in the Wall Street Journal citing investor materials revealed adjusted earnings before interest, taxes, depreciation and amortization of $1.25 billion on revenues of $2.7 billion, compared to $682 million in EBITDA and $5.1 billion of revenue in 2021 (before Musk took over). While the EBITDA figure looked like an improvement, a March report by the Financial Times indicated that it was 'wildly adjusted.' Fidelity, which helped take Twitter private in 2022, valued X at a roughly 70% discount to the initial purchase price as recently as January (implying an equity value of around $10 billion). X began to look a lot more appetizing, following Trump's election and Musk's elevation to head of DOGE. Some of the bigger advertisers returned. In early February, banks holding some of X's debt sold $5.5 billion worth of loans for 97 cents on the dollar. A week later, X debt was trading at face value. In March, X raised $1 billion in fresh equity at a $44 billion valuation (including $12 billion of debt) from outside investors, setting the stage for a combination with xAI at a similar valuation. The backers in that round included Sequoia Capital, 8VC, Andreessen Horowitz, Fidelity, 1789 Capital, Goanna Capital, and Bossa Invest, according to PitchBook. The main driver for investors who bought X shares in March was the social media company's ties to xAI, says one X investor. Prior to the merger, X held a 10% stake in xAI worth $5 billion, while xAI is feeding data from X into its large language model. Investors were 'well aware that X and xAI would merge at some point,' says the X investor who asked to remain anonymous in order to speak candidly. 'The ability for Elon to merge xAI with X makes an even more compelling investment thesis for X.' While xAI's new $80 billion valuation is a significant bump from $50 billion in November, it's in line with where the startup has been trading in secondary markets, where xAI has commanded a valuation of between $80 billion and $100 billion since early January, according to research firms Caplight, and PM Insights, which track private market data. In February, a group of investors (including again Sequoia Capital and Andreessen Horowitz, which later backed X in March) were reportedly seeking to invest in xAI at a $75 billion valuation. Columbia University law professor Dorothy Lund, who has followed Musk's career closely, points to the merger's similarities with a previous Musk deal from around a decade ago: Tesla's 2016 acquisition of SolarCity, a green energy company run by Musk's two cousins and backed by Musk. Despite the appearances of self-dealing and an investor lawsuit (which was finally resolved in Musk's favor in 2023), the SolarCity acquisition turned out okay for Tesla and its investors. 'There's a lot of levels that we could be critical and skeptical of this deal,' says Lund. 'There's also the level that maybe in five years, we look back and see [how] it turned xAI into the top AI company.'
