Musk's xAI Worth $200 Billion

"Elon Musk's xAI is a mash-up of the social media company X and his xAI particular intelligence company. When the two were thrown together in March, X was given a valuation of $33 billion, and xAI at $80 billion. There was not a great deal to support these figures. However, institutional investors don't seem to care. Musk recently raised $10 billion for the company, which gives it a $200 billion valuation, a jump of 76% in six months."

"The jump says something about Musk or AI valuations or both. xAI competitors have also seen huge increases in valuations. Anthropic raised $13 billion, which gave it a $183 billion valuation. OpenAI, the industry leader, held a secondary share sale that valued it at $500 billion. If OpenAI were a public company, it would be worth more than Exxon Mobil ( NYSE: XOM)."

"Almost all the money raised by these companies is to build AI server farms, some of which are the size of several football fields. Musk bought a one-million-square-foot piece of property outside Memphis. Meta will build a property in Louisiana to build a 400 million square foot server facility. Taken together, Meta ( NASDAQ: META), Microsoft ( NASDAQ: MSFT), Amazon ( NASDAQ: AMZN), and the largest private AI companies have announced plans to invest $500 billion in AI facilities this year."

Elon Musk combined his social media company X with xAI, assigning valuations of $33 billion and $80 billion respectively when merged in March. Institutional investors recently funded $10 billion for the combined entity, implying a $200 billion valuation, a 76% increase over six months. Competitors Anthropic and OpenAI saw valuations of $183 billion and $500 billion after large fundraisings. Most capital is earmarked for massive AI server farms, with acquisitions like a one-million-square-foot site near Memphis and planned facilities in Louisiana. Meta, Microsoft, Amazon and leading private AI firms plan about $500 billion in AI infrastructure investment this year.

Read at 24/7 Wall St.