People say that X aka Twitter was a bad investment because advertising revenue is down from when Elon Musk purchased it at $44 billion. The losses are not that bad while advertising is down, Elon was able to drastically reduce costs and headcount. X also added subscription revenue. A major thing that people forget is that X owns 25% of XAI. X content has enabled better realtime performance for XAI Grok 2.
If XAI hits the planned release of Grok 3 by the end of this year and X releases X payments then both companies should be comfortably valued at over $80 billion by the end of 2024. X would then be able to raise funds at a valuation about double what Elon Musk paid.
XAI was valued at $24 billion after raising $6 billion in May, 2024. However, XAI has released the Grok 2 AI model that is very close to the performance of OpenAI’s top GPT 4o (Omni) and the latest Gemini model from Google.
XAI has bought 100,000 Nvidia H100 chips and is setting up the expanded AI data center to train, Grok 3, a GPT 5 class model by the end of this year.
OpenAI is valued at $86 billion based upon its last funding by Microsoft. OpenAI’s Revenue is on track for an annualized revenue of $3.4 billion in 2024. It is unclear if this estimate is still accurate with the release of the open source Meta Llama 3 models. Microsoft is trying to making billions and perhaps $10 billion be adding OpenAI GPT4 to its products.
XAI Grok is incorporated into X Premium subscription service. XAI Grok will be integrated into Tesla cars and the Teslabot.
X owns 25% of XAI. XAI needed to train on the text in X. If XAI valuation increases towards OpenAI’s $86 billion with the release of Grok 3 then X would own $21.5 billion of XAI. The previous XAI valuation in May for X’s 25% of XAI was $6 billion. The release of Grok 2 likely makes XAI worth at least $48 billion. X’s shares would be worth $12 billion.
X is getting about $120 million per year in subscription revenue and has far lower ad revenue from before Elon Musk’s purchase at a price of $44 billion.
X, the social media platform formerly known as Twitter, is set to introduce a peer-to-peer payment service in 2024. This service is intended to function similarly to existing platforms like PayPal or Venmo. X wants to become a comprehensive everything app like China’s WeChat, which combines messaging, social media, and payment functionalities into a single platform. X has approvals in place for over 32 states and plans to expand to all 50. Musk aims to integrate these payment services deeply into the X platform, allowing users to manage their finances alongside their social interactions. While the exact launch date has not been specified, Musk has indicated that the service could be available as early as mid-2024.
Venmo was last valued at $38 billion in 2020 and Paypal trades at $69 billion. X has about 500 million users while Paypal has about 230 million and Venmo has about 90 million. X could launch a Paypal like service and rapidly get a $50 billion valuation for a payments and banking business.
SpaceX Starlink will be enabling global satellite direct to unmodified cellphone texting, voicecalls and low speed internet. Starlink direct to cell combined with X and X payments would enable rapid growth to billions of users.
X’s 25% share of XAI guarantees X will reach a higher valuation in 2025 than the $44 billion purchase price. X payments and Starlink integration will move X towards the trillion valuation of Meta.
By the end of 2024, if Grok 3 is released and is GPT 5 class, substantial improvement over Grok 2and Grok 3 is integrated with Tesla cars then XAI should end 2024 with about $100 billion in valuation.
If XAI reaches that goals and and if the X payments service is launched then X would be worth about $80 billion.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
Musk did a lot of good to progress science and technology. The biggest mistake was when he bought Twitter because of his personal complexes. Just remember the pedo guy tweet and the latest civil war comments. Totally unecessary.
He is just losing energy there and making enemies with his commentaries. Not to mention support for corrupt criminal who is against electric vehicles, not fan of technology, and pro-big oil and coal.
Elon is not a good politician or intellectual. He is an amazing engineer and technologist. He should do what he is best at. I think Brian overinflates Tesla value and similar valuations. These are just speculations. Many of them had proven false. We haven’t seen tons of Gigafactories as forecasted, no super high vehicle ramp up, the new cell ramp is slow,…
A reasonable analysis. X.ai is valued on the same basis as OpenAI and $100B is realistic if they execute perfectly. X.com as you point out owns 25% so would get a third of the way there from that. Musk doesn’t want the platform to be funded by ad revenue at all so it’s declining ad revenue isn’t a fair criticism. It’s just an odd and difficult thing to pivot a fairly big established enterprise to an entirely new revenue niche while still keeping the lights on and payroll met.
Let’s try to be realistic: twitter failed to deliver an adequate service both for DeSantis campaign launch AND for Donald Trump interview. Before discussing of AI services, banking and so on the platform should be able to perform its basic functions. Everything else is just unrealistic expectations/hype not substantiated by the documented performances we can observe.
It was under a massive, massive DDOS.
No.
The rest of Twitter was working as usual, and a non trivial number of people indeed made fun of the issue, and the lame excuse, on Twitter itself.
No.
X is popular to those of a certain political persuasion and hated by everyone else. That does not make it more valuable than Twitter used to be before Musk bought it.
As for his ai. It’s hardly unique, not the most powerful, has yet to prove itself, and it’s allowed to generate “suspect” material unfettered. So right now, it’s garbage.
These valuations remind me of the .com era, having internet/AI in the company’s title had a bgger impact on the market valuation than having a robust monetisation strategy.
Musk always looks so vital, never ruddy, in his AI renderings.
Musk seems to want to be a business titan, a social media celebrity, and a political player.
There are good reasons most serious business CEOs stay out of those latter two arenas.
Agreed. But the ‘titan, celebrity, and player’ are only but necessary (but likely not undesirable) Means to his own hyper-self-interested Ends – that of being a hyper-independently wealthy Individual with the opportunity to go to Space, Moon, and Mars as if undertaking any epic, long-term voyage/ trip; with his favourite Family and Friends, leaving behind a Rich World (but maybe just a part, not the whole World) without financial, resource, or oppressive Governmental control. When you witness his lifestyle and Brand, he’s not trying to change or control everything but just, with his businesses and behaviours, enable a True Medium-Government Libertarian Option – as in you can do, say, and be anything you want with minimal oversight but reasonable nearby infrastructure and modernity (as opposed to the off-the-grid nutcase Libertarian who is little better than an Anarchist without Outside Ambitions). I think, that deep down, he wants all of us to be Like Him and undertake our grandest, pro-capitalistic, pro-everything ambitions. That’s the Likeable thing about him – not that he’s an obnoxious over-achiever, but that he wants everyone to be that Way (on their own terms) and to embrace such an endlessly opportunistic World.
I would agree regarding his business ventures but he has waded into the waters of social commentary and actively expressed oppressive views on segments of the population. True libertarians would live and let live so long as it doesn’t infringe on our freedoms.
I understand your concerns, but there really is no such thing as a “True Libertarian that would live and let live” – such people are doomsday preppers and hermits with little interaction with the outside world – factually a cartoon character. A modern Libertarian wants minimized/ negligible regulation and oversight to pursue ‘normal person’ objectives of career/work, close personal relationships, and personal property definitions which all require, in any realistic sense, interacting with the outside world, ideally a rich, modern world; likely that contains political boundaries and the residents of such, that can facilitate a wide range of personal objectives. Interacting with such a world requires One to have opinions and make choices and have preferences, whether it is in what One buys, who One votes for, what One chooses to opine about to chosen Others, and what One sells. It is nigh impossible, in this day and age, and in this part of the World to speak freely without offending some self-identifying/ self-righteous Group or Individual and have it not portrayed as some attack requiring public renouncement and escalation. An over-sensitive world is a dysfunctional world, for which there is an endlessly slippery slope to personal and group conflict and anxiety shut-down.
He is, of course, a bit like an unfiltered toddler, yes; but that is a lesser crime than being offended by it and initiating contrary and escalating action. Perhaps the better role model are those infamous People for which you can scream in their face without response but then they still put in a full day’s work and love of their group; barely batting an eye, as if a fly in the wind.
Given up with twitter. I mainly used it for my innocent hobby of retro computing. But since the riots in the UK, it keeps showing me trending stories, often by Musk himself, that are obnoxious, racist and just plain wrong. Life’s too short for putting up with that crap
So I’m sure as hell never going to trust it with my money either.
You do realize that its feeding you more of what you have been clicking on, right?
That’s not all it does, it also feeds Musk and the content he associates with whether you block him or not. Given he almost exclusively interacts with divisive political issues now, that’s what comes to the surface.
It’s like he’s bored of waiting for Starship to work, he’s forgotten about Mars and all the grand futuristic dreams and just wants to roll in the mud with the pigs.