Popular social media platform X (formerly Twitter) has returned to a valuation of $44 billion, according to the Financial Times. This is the same value Elon Musk paid for the platform’s purchase in 2022.
The platform’s revenue has continued to decline since Elon Musk took charge. However, X witnessed a turnaround in 2024, recording $1.2 billion in adjusted earnings (before interest, taxes, depreciation, and amortization). This is the same revenue the platform posted before Musk took over.
In a different report, Bloomberg stated that the company is now valued at around $32 billion after it raised funds close to $1 billion from investors. The report added that Musk participated in the equity raise.
Despite the differences, a takeaway is that X has experienced a huge turnaround in its financial performance after it was last valued below $10 billion in September 2024. The new valuation also represents a rebound for Musk and the group’s investors, including Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments.
In addition, the report briefed that X is working on raising fresh capital in a primary round. The round which would aim to raise about $2bn through selling new equity, will be used to pay off more than $1 billion of junior debt that Musk agreed to take on to finance his buyout of the company.
Since taking over the social media platform three years ago, Elon Musk has reduced the platform’s moderation policies, prompting many advertisers to leave.
A group of seven Wall Street banks including Morgan Stanley, Bank of America, Barclays, and MUFG have sold almost all the $12.5bn of loans Musk used to finance his takeover of Twitter in 2022. The lenders had been saddled with the debt while Musk sought to turn around X’s operations as equity investors repriced their stakes in the platform at dramatic discounts.
The platform’s finances also improved after Musk transferred a 25 per cent stake in his artificial intelligence startup xAI to investors in the social media company early last year. The AI startup is now valued at $45 billion, serving as a source of security to lenders and a boost to the social media’s valuation.
Similar Read: Grok 3: Elon Musk’s xAI releases the latest Grok model with enhanced arithmetic reasoning.
xAI
Amid the rise in the valuation of his social media platform, Elon Musk’s AI startup has added image generation capabilities to its application programming interface (API).
Presently, only one model is available in the API – “grok-2-image-1212.” With a prompt caption, the model, which can generate about 10 images per request in JPG format, is priced at $0.07 per image. The request is limited to 5 per second.
The company explained that the API doesn’t support adjusting the quality, size, or style of images yet and that prompts are subjected to revision by a chat model.
On price comparison, Ideogram, a popular image model provider, charges $0.08 per image on the higher end. AI startup Black Forest Labs, with which xAI partnered last year to launch image generation on Musk’s social network X, charges around $0.05 per image.
The AI startup, which launched its API in October 2024, recently procured a generative AI video company. It also aims to stretch the arms of its Memphis-based data centre to train and run its various models.
In future actions, xAI is aiming for a significant pile of revenues with various training and development of models such as Grok 3. As the latest model of Grok, the AI company stated at the launch in February that Grok 3 has been in development for quite a while. The model was previously stated to be released in 2024 but missed the deadline.
Elon Musk described the model in a post, claiming that Grok 3 was developed with “10 times” more computing power than its predecessor, Grok 2. It also comes with an expanded training data set that includes filings from court cases.
Also, The AI company is reportedly meeting with investors about a potential $10 billion funding round that could bring its valuation to $75 billion.
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