Fidelity raised the valuation of its stake in X (formerly Twitter) by 32.37% in October, yet the company is still valued at 72% less than the $44 billion Elon Musk paid for it in 2022, according to Axios.
This adjustment is likely tied to xAI, Musk’s AI startup, which Fidelity also backed in its $6 billion Series B funding round earlier this year. xAI’s Grok chatbot, trained on X data, is available to X subscribers, and X is reported to hold a significant equity stake in xAI. Fidelity also increased its xAI valuation by 70% in October.
The valuation hike occurred before Donald Trump’s November presidential election victory, which saw Musk appointed as head of the newly created Department of Government Efficiency. Following the election, X experienced a surge in traffic, although millions of users also migrated to competing platforms like Bluesky.
These developments highlight Musk’s strategic alignment of X and xAI in both the technology and political landscapes. Fidelity’s investments suggest a strengthening connection between the two ventures, emphasizing the growing role of artificial intelligence in X’s future direction. However, X’s current valuation underscores the challenges the platform faces in regaining investor confidence and rebuilding market value.