Investors in Elon Musk’s takeover of Twitter are set to make a huge windfall from a surge in the valuation of his artificial intelligence company, reaping rewards from being loyal backers of the billionaire’s business empire.
Musk has given investors that backed his $44bn Twitter acquisition 25 per cent of the shares in xAI, which he founded last year to take on rivals such as OpenAI and Anthropic. xAI is set to close a new $5bn fundraising round as early as Wednesday, according to people with knowledge of the talks, doubling its valuation to $50bn in just six months.
That has meant some of Musk’s backers, who were sitting on billions of dollars of unrealised losses from the Twitter takeover, could be made “whole” through shares in xAI thanks to the start-up’s massive rise in value.
Those set to benefit as investors in both Musk companies include Fidelity, Oracle co-founder Larry Ellison, Saudi Prince Alwaleed bin Talal, Twitter founder Jack Dorsey and Silicon Valley venture firms Sequoia Capital and Andreessen Horowitz.