Musk investors who got hosed on Twitter takeover set to reap windfall as xAI value surges: report
High-profile investors who took painful losses backing Elon Musk’s takeover of Twitter are now in line for a sweet consolation prize — in the form of surging stakes in Musk’s artificial intelligence startup, according to a report.Musk has given 25% of the shares in xAI, which Musk founded last year, to investors who helped fund his $44 billion acquisition of the social media platform X, formerly known as Twitter, in 2022, sources with knowledge of the talks told the Financial Times.XAI is set to close a $5 billion fundraising round as early as Wednesday – doubling the company’s valuation to $50 billion in just six months, according to the paper.Those who backed Musk’s takeover of Twitter – which has seen advertisers and users flee due to concerns over a lack of content regulation – have been sitting on billions of dollars worth of unrealized losses.But xAI’s gains could help them recoup the unfavorable investments. Investors set to benefit from stakes in both Musk companies include Fidelity, Oracle co-founder Larry Ellison, Saudi Prince Alwaleed bin Talal, Twitter founder Jack Dorsey and venture firms Sequoia Capital and Andreessen Horowitz, according to the report.The unique “reward” system is Musk’s latest way of intertwining his companies, which also include rocket manufacturer SpaceX and electric vehicle maker Tesla.Many of the investors who helped fund Musk’s purchase of Twitter justified it as an investment not in X, but in Musk himself.“There are few adages in tech that really hold up,” one investor in Musk’s companies told the Financial Times.
“Never bet against Elon is one.”The billionaire’s AI startup has grown rapidly and will have raised about $11 billion in total investments after this week’s funding round shuts – welcome growth for Twitter investors, who funneled about $7 billion into Musk’s acquisition. “It’s hard to manage conflicts of interest on this sort of stuff,” an investor in one of the comp...