Fidelity has raised the estimated value of its stake in Elon Musk’s X (formerly Twitter) by 32.37% in October, according to an Axios report. Despite the boost, the social media platform is still valued at nearly 72% less than the $44 billion Musk paid to acquire it in 2022. The move marks the largest monthly increase in X’s valuation since Fidelity participated in Musk’s acquisition.
Fidelity’s actions extend beyond X. The firm also marked up its stake in Musk’s artificial intelligence venture, xAI, by approximately 70% in October. xAI, which uses X data to train its chatbot Grok, raised $5 billion in a Series B funding round last month, nearly doubling its valuation. Observers suggest the interconnected operations of X and xAI are influencing Fidelity’s assessments. X is believed to hold a significant equity stake in xAI, further tying their valuations together.
October’s reassessment follows a year of fluctuating valuations for X. Earlier in 2023, Fidelity consistently reduced its estimates, with cuts in January and March dropping the valuation to nearly 79% below Musk’s purchase price. While X remains a private entity, Fidelity’s calculations provide one of the few public indicators of its perceived value.
Market momentum surrounding Musk’s companies gained traction after Donald Trump’s victory in the U.S. presidential election this November. Fidelity’s valuations, although updated before the election, are expected to show further gains in November. Musk has been named to lead the newly created Department of Government Efficiency in Trump’s administration, which has also promised corporate tax cuts and deregulation. These developments have fueled optimism across Musk’s ventures.
For instance, Tesla shares surged by 39% in November, and SpaceX, a major holding of the Destiny Tech 100 fund, helped drive the fund’s 269% jump in value during the same period. These spikes suggest broader investor enthusiasm for Musk-led enterprises under the new administration.
Fidelity’s latest valuations hint at a strategic recalibration, likely influenced by the rising synergy between Musk’s ventures. The connection between X and xAI underscores the growing value of integrated ecosystems, particularly where AI is concerned. If these trends continue, Musk’s interconnected business model could set a precedent for future tech innovation.
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