• Elon Musk has had a big year with Tesla and SpaceX soaring in value, supercharging his net worth.
• He helped Donald Trump win reelection and intends to transform the US government in 2025.
• Scroll down for seven charts showing how Musk's 2024 played out.

Elon Musk has had a year for the record books.

His businesses have taken off, with Tesla, SpaceX, xAI, and Neuralink all touching new valuation highs. Their success has boosted Musk's net worth to above $450 billion for the first time, putting him over $200 billion ahead of the world's second-richest person, Amazon's Jeff Bezos.

Musk has also become a power player in US politics after wielding his cash and clout to help win Donald Trump a second term in office. As one of the president-elect's closest advisors, he's now gearing up to overhaul the US government.

The situation seems worse at X, formerly Twitter, after Musk's $44 billion takeover and reshaping of the platform sparked an advertiser exodus.

Take a look at Musk's 2024 in charts (all data is accurate as of Friday, December 20):

1. Charging ahead

Tesla shares have shot up as much as 85% this year, driving the electric vehicle maker's market value above $1.4 trillion for the first time. They've since retreated but continue to trade near record levels.

The automaker has benefited from market buzz around artificial intelligence — which it's harnessing to develop self-driving cars and humanoid robots — plus a robust US economy and the Federal Reserve cutting interest rates.

Investors are also betting that Musk's businesses will benefit from his close ties to Trump, which could translate into less stringent regulations, government subsidies, tariff exemptions, and more.

2. Reaching for the stars

SpaceX's valuation nearly doubled from $180 billion at the end of last year to $350 billion this month, based on the price paid by the company and its backers for employee shares in its latest tender offer.

Musk's rocket, spacecraft, and satellite communications company made several technological breakthroughs this year. For example, it plucked the first-stage booster of its new Starship out of the air using a massive pair of mechanical "chopsticks" in October.

3. Shifting fortunes

Musk's net worth slumped in the spring as Tesla stock tumbled, dropping below $170 billion at its nadir.

But it rebounded by over $300 billion to touch an unprecedented $486 billion on December 17, as Tesla hit fresh highs and SpaceX notched a $350 billion valuation.

4. Rise of the robots

Musk's artificial intelligence company, xAI, was only founded in July 2023.

Yet it notched a post-money valuation of $24 billion in May following its Series B funding round. That rose to $50 billion in November, reports say, meaning the maker of the Grok chatbot is worth roughly as much as Monster Beverage.

5. X marks the drop

It remains tricky to gauge the health of X, the social media company formerly known as Twitter that Musk took private in 2022. One way is to use Fidelity's monthly estimates of the value of its stake in the business.

The mutual fund giant's figures imply that X's valuation has crashed since Musk's purchase. The tech billionaire laid off a large part of the company's workforce and relaxed content moderation in support of greater free speech, triggering an advertiser exodus that hammered the company's revenues.

Regardless, Musk recently posted on X that the platform has roughly 1 billion active users, although around 40% of them only log on during important world events.

6. Trump train

Musk was one of the biggest spenders in the US presidential election, deploying over $270 million to back Trump's race for president, run ads against Democrats, and promote conservative viewpoints.

His starring role in Trump's victory and emergence as one of the president-elect's closest advisors and a co-chief of the new Department of Government Efficiency suggests that his investment in the election has paid off.

7. Building brainpower

Neuralink, Musk's neurotechnology company, was valued at $8 billion this summer, up from about $2 billion three years earlier.

The developer of brain-computer interfaces wants to allow people with quadriplegia to control computers with their thoughts. Musk released footage this spring of the first patient to receive one of its brain implants.

• Sam Altman isn't done firing shots at Elon Musk.
• The OpenAI CEO said the Tesla boss was "clearly a bully" who likes to pick fights with rivals in an interview with The Free Press.
• Musk is in a lengthy legal battle with OpenAI and Altman, and refiled a lawsuit against both earlier this year.

Sam Altman and Elon Musk once started OpenAI together — but now their relationship is a lot more complicated.

In an interview with The Free Press on Thursday, Altman said his OpenAI cofounder was "clearly a bully" and said that Musk's high-profile feud with his former company had become a "sideshow."

Since stepping down from OpenAI in 2018, Musk has been highly critical of the AI startup and CEO Altman.

The Tesla boss refiled a lawsuit in August, arguing he had been "deceived" into starting the company by Altman and fellow cofounder Greg Brockman.

Musk has also asked a federal court to block OpenAI from transitioning into a for-profit entity, with OpenAI firing back by releasing a cache of emails showing Musk pushed for the AI startup to be for-profit while working at the company.

In the interview, Altman described Musk as a "legendary entrepreneur" who did a lot to help OpenAI in its early days.

"He's also clearly a bully, and he's also someone who clearly likes to get into fights," added the OpenAI CEO, pointing to the billionaire's high-profile spats with Jeff Bezos and Bill Gates.

Altman also said he believes much of Musk's animosity is rooted in OpenAI's recent success and the fact that he now runs a direct competitor.

Musk announced xAI, his own AI startup, last year, and the company has since released several versions of its chatbot Grok.

"Everything we're doing, I believe Elon would be happy about if he were in control of OpenAI," said Altman.

"He left when he thought we were on a trajectory to certainly fail, and also when we wouldn't do something where he had total control over the company," he added.

Altman's comments come as Musk prepares to occupy an increasingly prominent role in the second Trump administration. Though Musk will have an influential political position, Altman said he did not believe Musk would use his power to go after his rivals.

"I think there are people who will really be a jerk on Twitter who will still not abuse the system of the country," he said.

OpenAI and Musk did not respond to requests for comment, sent outside normal working hours.

• Elon Musk fixes the biggest problems at his companies every week, Marc Andreessen says.
• Musk quickly tackles pressing issues by working directly with engineers and coders, the VC said.
• The Tesla and SpaceX CEO's method attracts great talent and inspires deep loyalty, Andreessen said.

Elon Musk has built some of the world's most valuable companies, from Tesla to SpaceX. A key driver of his success is a relentless focus on solving problems fast, often by working directly with the engineers or coders who've gotten stuck, Marc Andreessen says.

The legendary venture capitalist shared his insights from working closely with Musk on X, xAI, and SpaceX during a recent episode of the "Modern Wisdom" podcast.

Unlike many CEOs, Musk is devoted to understanding every aspect of his businesses, the Andreessen Horowitz cofounder and general partner said. He's "in the trenches and talking directly to the people who do the work," and acting as the "lead problem solver in the organization."

Musk's businesses include Tesla, SpaceX, Neuralink, xAI, The Boring Company, and X — formerly Twitter. Andreessen said that every week at each of his companies, Musk "identifies the biggest problem that the company is having that week and he fixes it. And then he does that every week for 52 weeks in a row. And then each of his companies has solved the 52 biggest problems that year, in that year."

In contrast, the bosses of most large corporations spend months or years holding meetings, watching presentations, and conducting legal and compliance reviews before they address their most pressing issues, Andreessen told host Chris Williamson.

Musk sees his businesses almost like assembly lines, and he focuses on removing bottlenecks and speeding up the conveyer belt a little more every week, the billionaire VC and Netscape cofounder said.

His laser focus on fixing problems attracts exceptionally talented people to his companies who want to work extremely hard and meet exacting standards, fueling further success for his businesses, Andreessen said.

Straight to the source

When Musk spots a bottleneck, he cuts through the layers of management to talk to the people actually working on the line or writing the code, Andreessen said.

"So he's not asking the VP of engineering to ask the director of engineering to ask the manager to ask the individual contributor to write a report that's to be reviewed in three weeks," the early-stage investor said. "He would throw them all out of the window."

Andreessen said Musk's approach of finding the person grappling with a particular issue, and then working with them to solve it, inspires deep loyalty.

The person thinks "if I'm up against a problem I don't know how to solve, freaking Elon Musk is going to show up in his Gulfstream, and he's going to sit with me overnight in front of the keyboard, or in front of the manufacturing line, and he's going to help me figure this out," the tech guru said.

Musk's strategy of tackling problem after problem has a "catalytic, multiplicative effect" that helps his businesses power ahead of rivals, Andreessen added.

In the past, Musk has been criticized for spreading himself too thin and not allocating enough time, energy, and resources to any one business like Tesla.

The world's wealthiest man has also said at points that he's working too hard and juggling too much, and his "hardcore" management style has been slammed as brutal and mercurial.

But in terms of technical progress and value generation, Musk's approach of getting involved quickly to fix things appears to be paying off.

• In a lawsuit, Elon Musk alleged OpenAI overpays as part of a pattern of anticompetitive practices.
• An analysis of salary data found that both companies offered pay well above typical industry wages for some roles.
• xAI paid one worker double the industry standard wage for the role; one OpenAI worker made over three times as much.

As the artificial-intelligence industry continues to attract attention, power, and billions of dollars in funding, two major players — Elon Musk's xAI and Sam Altman's OpenAI — are locked in a contentious battle over talent. Musk filed a lawsuit in August accusing Altman's company of offering "lavish compensation" to "starve competitors."

To examine Musk's claims about salaries, Business Insider analyzed wage data from specialty visa applications for each company from 2024. While both offered compensation well above typical industry wages for the handful of roles for which data was available, OpenAI paid some of its staff an even higher premium over standard rates.

The documentation that companies must file when hiring foreign workers on specialty visas like the H-1B provides a window into otherwise private compensation data at both firms and gives rare insight into the expensive war for AI talent.

xAI is only a fraction of the size of OpenAI; the company employs about 100 workers, compared with about 3,000 at OpenAI, PitchBook reported.

xAI reported pay data for 10 worker applications, compared with OpenAI's 86 worker applications. The companies paid 37% and 87%, respectively, above the typical industry wage — or "prevailing wage" — for the roles surveyed, based on data from US Customs and Immigration Services.

The prevailing wage is determined by the Department of Labor. It represents the average wage paid to workers in a particular occupation within a defined geographic area. Employers who hire workers on specialty visas like H-1Bs must pay them at least as much as the prevailing wage.

The data found that pay for the 10 xAI roles with specialty visa applications ranged from $250,000 to $500,000. At the top end, xAI paid one worker nearly double the prevailing wage for the role of principal machine learning engineer.

Among the 86 roles with available data on specialty visa applications, OpenAI paid between $145,000 and $530,000, with one member of the company's technical staff earning more than three times the prevailing wage for the role.

In the table above, BI compared the average salary for each job title included in the USCIS data for the two companies to the average prevailing wages for those titles.

The data offers some insight into how Musk's company approaches compensation amid a legal battle that has reignited the feud between Musk and Altman.

The pair cofounded OpenAI in 2015, and Musk was one of several Silicon Valley investors to collectively pledge $1 billion to the venture. He resigned from OpenAI's board of directors in 2018, citing a potential conflict of interest due to Tesla's work with artificial intelligence.

Since then, Musk has repeatedly bashed OpenAI and Altman, saying the company is "not what I intended at all." Musk sued OpenAI and its CEO earlier this year but withdrew the lawsuit, only to file a new suit in August. In addition to claims about OpenAI's allegedly anticompetitive practices, lawyers for Musk said that he was "deceived" and "manipulated" into cofounding the company.

"This suit is the latest move in Elon Musk's increasingly blusterous campaign to harass OpenAI for his own competitive advantage," OpenAI's attorneys wrote in motion to dismiss Musk's latest lawsuit. Since launching xAI Musk "has been trying to leverage the judicial system for an edge," they added.

Musk, Altman, and representatives for xAI and OpenAI did not respond to requests for comment.

Emails between Musk, Altman, and other OpenAI workers between 2015 and 2016 showed that Musk repeatedly emphasized the importance of recruiting top AI talent.

In the exchanges, which were included as part of Musk's most recent lawsuit, Musk wrote that recruitment should be OpenAI's "most important consideration," and the company should do "whatever it takes to bring on ace talent."

In April, Musk said xAI brought over a Tesla engineer after OpenAI began "aggressively recruiting" workers from the electric-car maker. Based on a review of LinkedIn profiles, xAI has hired at least nine former OpenAI employees, including xAI cofounder Igor Babuschkin, since Musk launched xAI in 2023.

Do you work for xAI or OpenAI? Reach out to the reporter via a non-work email and device at [email protected] or 248-894-6012

• Oracle and xAI love to flex the size of their GPU clusters.
• It's getting hard to tell who has the most supercomputing power as more firms claim the top spot.
• The real numbers are competitive intel and cluster size isn't everything, experts told BI.

In high school, as in tech, superlatives are important. Or maybe they just feel important in the moment. With the breakneck pace of the AI computing infrastructure buildout, it's becoming increasingly difficult to keep track of who has the biggest, fastest, or most powerful supercomputer — especially when multiple companies claim the title at once.

"We delivered the world's largest and fastest AI supercomputer, scaling up to 65,000 Nvidia H200 GPUs," Oracle CEO Safra Catz and Chairman, CTO, echoed by Founder Larry Ellison on the company's Monday earnings call.

In late October, Nvidia proclaimed xAI's Colossus as the "World's Largest AI Supercomputer," after Elon Musk's firm reportedly built a computing cluster with 100,000 Nvidia graphics processing units in a matter of weeks. The plan is to expand to 1 million GPUs next, according to the Greater Memphis Chamber of Commerce (where the supercomputer is located.)

The good ole days of supercomputing are gone

It used to be simpler. "Supercomputers" were most commonly found in research settings. Naturally, there's an official list ranking supercomputers. Until recently the world's most powerful supercomputer was named El Capitan. Housed at the Lawrence Livermore National Laboratory in California 11 million CPUs and GPUs from Nvidia-rival AMD add up to 1.742 Exaflops of computing capacity. (One exaflop is equal to one quintillion, or a billion billions, operations per second.)

"The biggest computers don't get put on the list," Dylan Patel, chief analyst at Semianalysis, told BI. "Your competitor shouldn't know exactly what you have," he continued. The 65,000-GPU supercluster Oracle executives were praising can reach up to 65 exaflops, according to the company.

It's safe to assume, Patel said, that Nvidia's largest customers, Meta, Microsoft, and xAI also have the largest, most powerful clusters. Nvidia CFO Colette Cress said 200 fresh exaflops of Nvidia computing would be online by the end of this year — across nine different supercomputers — on Nvidia's May earnings call.

Going forward, it's going to be harder to determine whose clusters are the biggest at any given moment — and even harder to tell whose are the most powerful — no matter how much CEOs may brag.

It's not the size of the cluster — it's how you use it

On Monday's call, Ellison was asked, if the size of these gigantic clusters is actually generating better model performance.

He said larger clusters and faster GPUs are elements that speed up model training. Another is networking it all together. "So the GPU clusters aren't sitting there waiting for the data," Ellison said Monday.

Thus, the number of GPUs in a cluster isn't the only factor in the computing power calculation. Networking and programming are important too. "Exaflops" are a result of the whole package so unless companies provide them, experts can only estimate.

What's certain is that more advanced models — the kind that consider their own thinking and check their work before answering queries — require more compute than their relatives of earlier generations. So training increasingly impressive models may indeed require an arms race of sorts.

But an enormous AI arsenal doesn't automatically lead to better or more useful tools.

Sri Ambati, CEO of open-source AI platform H2O.ai, said cloud providers may want to flex their cluster size for sales reasons, but given some (albeit slow) diversification of AI hardware and the rise of smaller, more efficient models, cluster size isn't the end all be all.

Power efficiency too, is a hugely important indicator for AI computing since energy is an enormous operational expense in AI. But it gets lost in the measuring contest.

Nvidia declined to comment. Oracle did not respond to a request for comment in time for publication.

Have a tip or an insight to share? Contact Emma at [email protected] or use the secure messaging app Signal: 443-333-9088.

• On Saturday, some users of Elon Musk's X saw Grok running a new image generator called Aurora.
• The new model appears to have more photorealistic generations than the prior Flux model.
• Aurora hasn't been widely released, though reports indicate it has few limits on what it creates.

For a few hours on Saturday, some users of Elon Musk's X reported having access to Aurora, a new, more photorealistic image generator powered by Musk's artificial intelligence model, Grok.

While Aurora has not been widely released — and some users who reported having access to it later said their Grok had reverted to its older model, Flux — the brief glimpse at the newer model offered the first insight into how it compares to its predecessor and competitors.

Aurora's detailed generations are a notable improvement from Grok's Flux model and appear to rival the output of other models such as OpenAI's DALL·E 3.

TechCrunch reported Aurora's beta version — like Flux's — appears to have few creative limitations, and in brief tests created images of copyrighted characters like Mickey Mouse and public figures, including a depiction of a "bloodied Donald Trump," but "stopped short of nudes." In tests by Business Insider, Grok's Flux version also created images of Mickey Mouse but refused to create any violent imagery.

On X, users with access to the model shared photos of Aurora's creations, including images of Ray Romano and Adam Sandler on a sitcom set and Musk boxing with OpenAI CEO Sam Altman.

While the images gained praise online for their quality and realism, there was still some evidence that they were AI-generated, such as unusual proportions in the arms and hands and an uncanny smoothness to some facial and skin features.

"X AI casually releasing one of the best image models on a Saturday at 2am... @xai y'all are built different," Guillaume Verdon, the founder of AI startup Extropic and of the effective accelerationism movement, which supports AI growth and development without guardrails or regulation, wrote in a post tagging xAI, Musk's artificial intelligence company that created Grok.

Musk replied to Verdo, who goes by Based Beff Jezos online, saying, "Just the beta version, but it will improve very fast."

Representatives for X did not immediately respond to a request for comment from Business Insider.

• Elon Musk's xAI plans to make a tenfold increase to the number of GPUs at its Memphis supercomputer.
• The expansion aims to help the startup compete with OpenAI and Google in the AI race.
• Nvidia, Dell, and Supermicro Computer also plan to establish operations in Memphis.

Elon Musk's xAI is ramping up its Memphis supercomputer to house at least 1 million graphic processing units, the Greater Memphis Chamber said on Wednesday.

The supercomputer, called Colossus, is already considered the largest of its kind in the world. The expansion would increase the number of its GPUs tenfold.

The move is part of xAI's effort to ramp up AI development and outpace rivals like OpenAI and Google. The GPUs are used to train and run xAI's AI-powered chatbot Grok, the company's answer to products like OpenAI's ChatGPT and Google's Gemini.

"In Memphis, we're pioneering development in the heartland of America," Brent Mayo, an xAI engineer, said in a statement. "We're not just leading from the front; we're accelerating progress at an unprecedented pace while ensuring the stability of the grid utilizing megapack technology."

The Greater Memphis Chamber said Nvidia — the leader in the GPU market and a supplier to Colossus — along with Dell and Supermicro Computer, also plan to establish operations in Memphis.

A 'superhuman' task

xAI built its supercomputer, Colossus, at a rapid pace. The supporting facility and supercomputer were built by xAI and Nvidia in just 122 days, according to a press release from Nvidia.

In an interview with Jordan Peterson on X in June, Musk said it took 19 days to get Colossus from hardware installation to beginning training, adding it was "the fastest by far anyone's been able to do that."

The speed of xAI's expansion won praise from Jensen Huang, the CEO of Nvidia, who described the effort as a "superhuman" task and hailed Musk's understanding of engineering.

Huang said a project like Colossus would normally take "three years to plan" and another year to get it up and running.

Musk's AI startup has also been on a fundraising streak. The Wall Street Journal reported that xAI is valued at $50 billion, doubling its valuation since the spring.

Investors in xAI's latest funding round reportedly include Sequoia Capital and Andreessen Horowitz. Earlier this year, xAI raised a $6 billion Series B from A16z and Sequoia Capital at a $24 billion post-money valuation. The new round means the AI company has raised a total of $11 billion this year.

• Sam Altman offered some kind words for his OpenAI cofounder Elon Musk.
• Altman and Musk have been embroiled in a legal dispute for the better part of a year.
• The OpenAI CEO said he believes Musk will not abuse his new political influence.

It seems like at least one-half of technology's hottest feud is offering an olive branch.

Sam Altman, the CEO and cofounder of OpenAI, had mostly positive words about Elon Musk, his OpenAI cofounder and current competitor, at Wednesday's DealBook Summit.

"I grew up with Elon as a mega hero. I thought what Elon was doing was absolutely incredible for the world," Altman told DealBook founder Andrew Ross Sorkin.

"Of course, I have different feelings about him now, but I'm still glad he exists," he added. "Not just because I think his companies are awesome, which I do think, but because I think, at a time when most of the world was not thinking very ambitiously, he pushed a lot of people, me included, to think much more ambitiously."

Despite what Altman characterized as his "different feelings," he still believes Musk will do the right thing given his new proximity to political power as an advisor to President-elect Donald Trump.

"I believe pretty strongly that Elon will do the right thing," Altman said. "It would be profoundly un-American to use political power, to the degree that Elon has it, to hurt your competitors and advantage your own businesses."

"I don't think Elon would do it," he added. "It would go so deeply against the values I believe he holds very dear to himself."

Musk seemed to appreciate the comment — liking a post on X that included Altman's quote.

The pair have been battling it out both in court and online for the better part of two years, but their troubles go back to 2018 when Musk stepped down from OpenAI's board after the company reportedly rejected his offer to run the company and he pulled future funding.

After a series of jabs — with Altman's being more mild-mannered — Musk sued OpenAI and Altman in March, alleging that the company's transition to a "capped-profit" entity and its partnership with Microsoft was in opposition to its founding as an open-sourced nonprofit.

Musk dropped the OpenAI suit in June, reportedly after he met Altman on the sidelines of a technology conference in Big Sky, Montana. The pair shared a hug after speaking, The Wall Street Journal said. However, Musk filed a new suit a couple of months later, claiming he was "deceived" into cofounding the firm. Last month, he amended the lawsuit to add Microsoft as a defendant.

"OpenAI has attempted to starve competitors of AI talent by aggressively recruiting employees with offers of lavish compensation, and is on track to spend $1.5 billion on personnel for just 1,500 employees," lawyers for Musk said in the complaint.

Since Trump won the US presidential election, people close to Musk have said he "despises" Altman, the Journal also reported. The outlet said Altman's attempts to contact the president-elect through friends or business associates have been largely unsuccessful because they knew his entreaties would be unwelcome to Musk.

Musk has skin in the game. His own artificial intelligence company, xAI, which could compete with OpenAI, was recently valued at $50 billion, just 16 months after it was founded. OpenAI was last valued at $157 billion in October.

Altman, for one, didn't seem surprised about xAI's swift success.

When asked by Sorkin if he'd expected xAI to be a serious competitor, Altman was resolute: "Yes."

• Elon Musk's xAI reportedly closed a $5 billion funding round last month at a $50 billion valuation.
• A Fidelity fund has boosted the value of its shares in xAI by 70%, according to filings.
• The fund also boosted the value of its shares in Musk-owned social media platform X by 32.4%.

Fidelity increased the value of its shares in two Elon Musk-owned companies in October, social media platform X and startup xAI, according to filings.

The financial giant, which invests in startups and large corporations through multiple mutual funds, has stakes in both companies via its Blue Chip Growth Fund.

That fund valued its xAI shares at $75,062,706 at the end of October, according to filings released publicly at the end of November. The fund had 3,688,585 shares at the end of July, according to an annual filing from August, which means the shares are currently valued at $20.35 each.

Last month, the fund valued its xAI shares at $44,152,362, or $11.96 each. That's a 70% jump from September to October.

Representatives for Fidelity did not immediately respond to a request for comment.

Fidelity's October markup for OpenAI rival, xAI, foreshadowed what turned out to be a huge month for Musk, who was tapped as President-elect Donald Trump's government efficiency boss in early November.

Later in the month, xAI closed a hotly anticipated $5 billion funding round reportedly from Qatar's sovereign-wealth fund, Qatar Investment Authority, as well as VC firms Sequoia Capital and Andreessen Horowitz, the Wall Street Journal reported.

xAI is now valued at $50 billion, which is more than double the $24 billion valuation it received earlier this year after its $6 billion Series B funding round.

The AI startup has made up significant ground on its rivals by using X as a source of third-party data, one of the main sources for training large language models.

Fidelity also bumped up the value of its X shares to $5,530,358 in October, according to the November filing. The bump followed months of Fidelity lowering the value of its shares of X.

The fund had 196,600 Class A shares of X at the end of July, according to an annual filing from August. That means the fund is currently valuing its shares of X at $28.13 a piece, which is a 32.4% jump from the previous month when the fund valued its X shares at $4,185,614, or $21.29 a pop.

Previously, Fidelity's value of X shares had dropped more than 80% compared to two years ago, when Musk, in October 2022, purchased X for $44 billion. While critics initially said he 'overpaid' for the social media platform, it is starting to bear fruit — including supporting his AI ambitions and winning favor with Trump.

At the time of the purchase, the Blue Chip Growth Fund invested $19.66 million, according to filings. Assuming the investment was made at X's $44 billion valuation, the fund last month estimated X's total value to be around $9.4 billion. For October, X's value is now estimated to be around $12.5 billion.

Fidelity's value in OpenAI, meanwhile, remained mostly unchanged from September to October. At least five Fidelity funds have a stake in the AI juggernaut, and Fidelity participated in OpenAI's $6.6 billion funding round to the tune of at least $100 million.

Four of the five funds held the same value for its OpenAI shares, and the firm's Stock Selector All Cap Fund increased the value of its investment slightly to $584,180, up from $580,570.

Representatives for OpenAI did not immediately respond to a request for comment.

• Elon Musk's $44 billion Twitter buyout was seen by many as overpriced.
• However, the social media platform has helped give Musk close access to the Trump administration.
• Twitter, now X, has also been a valuable data source for Musk's $50 billion startup xAI.

When Elon Musk bought Twitter for $44 billion, it was panned as one of the worst tech acquisitions in history. Two years, an election, and a generative AI boom later, it's starting to look like more of a bargain.

Shortly after the deal closed in October 2022, Wedbush Securities tech analyst Dan Ives said it would "go down as one of the most overpaid tech acquisitions in the history of M&A deals on the Street."

On paper, the $13 billion that Musk borrowed to buy Twitter, now X, has turned into the worst merger-finance deal for banks since the 2008 financial crisis.

Yet the deal has provided significant benefits for Musk. He now wields considerable influence in the incoming Trump administration after using X to throw his support behind the former president's reelection.

Not only has X served as Musk's political megaphone, but it's also been a lucrative source of training data for one of the billionaire's other ventures: xAI, the startup that's rocketed to a $50 billion valuation just 16 months after launch.

That fresh valuation means xAI has surpassed Musk's purchase price for X. It came with a $5 billion funding round, which The Wall Street Journal reported was backed by the Qatar Investment Authority and Sequoia Capital.

Musk launched xAI in July 2023 as a springboard to get in the AI race after cofounding and then leaving ChatGPT maker OpenAI due to differences with its CEO, Sam Altman.

The startup has made up significant ground on its rivals by using X as a source of third-party data, one of the key avenues for training large language models.

In late 2023, Musk blocked other organizations from scraping X data for free — but gave xAI continued access. That gave xAI a crucial boost.

Ellen Keenan O'Malley, a senior associate at intellectual property law firm EIP, told Business Insider that xAI's access to "third-party information through X is the potential kryptonite to ChatGPT's edge" and a potential driver behind the rising valuation of Musk's startup.

Although the number of X users has been falling, it had 600 million monthly active users as of May, according to Musk.

"This is a level that neither OpenAI nor any other third party can access, or at least not as easily, which provides a huge competitive edge and therefore makes xAI a valuable company," added O'Malley.

Access to 0.3% of X's data costs around $500,000 annually, which prices many out, Wired previously reported.

"Clearly, X's or indeed any social media platform's data is valuable," Advika Jalan, head of research at MMC Ventures, told BI.

X marks the spot in the Musk-Trump alliance

Musk spent at least $119 million on a political action committee to support Trump's campaign.

X played a large role, too. Musk has long been an avid poster on X, but he ramped up the volume during the election cycle. Analysis by The Economist found that the share of Musk's political posts on X has risen from less than 4% in 2016 to over 13% this year. Since endorsing Trump, has has posted more than 100 times on some days to his more than 200 million followers.

A study published by the Queensland University of Technology this month suggested that Musk may have tweaked X's algorithm to boost the reach of his and other Republican-leaning accounts.

Shmuel Chafets, cofounder of venture capital firm Target Global, told Business Insider that "X has become a powerful tool" in Musk's ecosystem, adding that it serves "as a platform for promotion and influence, similar to how Warren Buffett leverages the Berkshire Hathaway annual shareholders meeting and his shareholder letters."

X didn't always seem destined to attain such influence in Musk's hands.

In the months and years following Musk's takeover, an advertiser revolt ensued over content moderation concerns, the company laid off about 80% of staff, and service outages disrupted users.

Musk's co-investors have been writing down the value of their X stakes in the two years since. In September, Fidelity, one of its investors, slashed the value of its holding, giving X an implied valuation of $9.4 billion.

Yet Musk's support for Trump, which came after an assassination attempt against the president-elect at a rally in Pennsylvania in July, gives the tech billionaire political sway that is hard to put a price on.

Musk, who Trump said was a "super genius" in his victory speech at the Mar-a-Lago resort in Palm Beach, was selected by the president-elect to run a new Department of Government Efficiency alongside Vivek Ramaswamy, who ran in the 2024 Republican primary.

DOGE will be a "threat to bureaucracy," according to Musk, whose remit at the newly formed department will include driving $2 trillion in federal spending cuts and slashing regulations he deems superfluous and in the way of his corporate empire. As one SpaceX official told Reuters, Musk "sees the Trump administration as the vehicle for getting rid of as many regulations as he can, so he can do whatever he wants, as fast as he wants."

Since Trump's election win, the billionaire has been seen side-by-side with the president-elect at a UFC fight night while reportedly joining his calls to leaders like Volodymyr Zelensky and Google CEO Sundar Pichai.

X-odus

How long X maintains a Musk-Trump bromance and supports xAI's growth remains to be seen.

Musk, for instance, isn't always getting his preference for cabinet appointments chosen by Trump; his choice of Wall Street veteran Howard Lutnick as Treasury secretary was shunned for Trump's pick Scott Bessent, dismissed by Musk as a "business-as-usual choice."

X also faces legal challenges in which judges have expressed concerns over gatekeeping user data. In May, a federal judge in California dismissed a lawsuit filed by X against Israeli firm Bright Data. X claimed Bright Data was "using elaborate technical measures to evade X Corp.'s anti-scraping technology."

Earlier this month, X partially revived its suit against Bright Data. Should X be unsuccessful, it would raise questions about the value of the X to xAI data pipeline.

Elsewhere, the renewed interest in X rivals like Bluesky and Threads risks seeing Musk's social media site lose users who are both key for advertising revenue and providing vital sources of data for training future models at xAI. X is now in a position where "lots of people hate it because they see it as being a weaponized instrument of MAGA," Calum Chace, cofounder of AI startup Conscium, told BI.

For now, though, Musk has a powerful tool in his hands with X.

"Critics may enjoy pointing out his missteps, but Musk's ability to leverage X for both personal and business purposes reinforces his reputation as a visionary entrepreneur who consistently thinks several steps ahead of his contemporaries," said Target Global's Chafets.

"Ultimately, this deal could prove highly lucrative if he decides to sell or take the company public in the future."

• Elon Musk's demand for Nvidia chips has put pressure on the company to deliver.
• A Nvidia sales lead told colleagues in an email that their supply chain was under strain, per the Journal.
• A Nvidia spokesperson told BI that the company has "worked hard to meet the needs of all customers."

Nvidia is feeling the pressure from trying to meet Elon Musk's insatiable demand for chips.

Musk's demand for chips was straining the chip giant's supply chain, a sales lead for Nvidia told colleagues in an email obtained by The Wall Street Journal.

The Journal's report, which was published on Wednesday, did not specify when the email was sent.

When approached for comment, a spokesperson for Nvidia told Business Insider that the company has "worked hard to meet the needs of all customers."

Nvidia has also "greatly expanded the available supply" of its chips, the spokesperson added.

Musk did not respond to a request for comment from BI.

Nvidia's chips have become a hot commodity among tech companies, who use them to train and deploy their AI models.

In January, Meta CEO Mark Zuckerberg told The Verge in an interview that Meta would own more than 340,000 Nvidia H100 GPUs by the end of 2024.

"We have built up the capacity to do this at a scale that may be larger than any other individual company. I think a lot of people may not appreciate that," Zuckerberg told the outlet.

Musk, meanwhile, has been building his own war chest of chips. The billionaire launched his own AI startup, xAI, in 2023 and has since raised billions of dollars in funding.

In June, CNBC reported that Musk had redirected $500 million worth of Nvidia chips from Tesla to X and xAI.

"Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse," Musk said on X in response to CNBC's story.

Then, in September, Musk announced that xAI had brought a massive new training cluster of Nvidia chips online.

The system, dubbed Colossus, was built using 100,000 Nvidia H100 GPUs in Memphis, Tennessee, in 122 days, Musk wrote on X.

"Colossus is the most powerful AI training system in the world. Moreover, it will double in size to 200k (50k H200s) in a few months," Musk said in his post.

The engineering feat was praised by Nvidia's founder and CEO, Jensen Huang, who called it a "superhuman" feat.

"As far as I know, there's only one person in the world who could do that. Elon is singular in his understanding of engineering and construction and large systems and marshaling resources," Huang said in an interview on the "Bg2 Pod" podcast that aired on October 13.

"It's just unbelievable," Huang added.

Musk and Zuckerberg aren't the only tech executives hungry for Nvidia's chips.

Larry Ellison, the cofounder and chairman of Oracle, said in an earnings call in September that he and Musk had asked Huang for more GPUs while the three were having dinner.

"I would describe the dinner as me and Elon begging Jensen for GPUs," Ellison said.

The robust demand for chips has turned Nvidia into one of the most valuable companies in the world.

Nvidia announced its third-quarter earnings on November 20, where it recorded $35.08 billion in revenue for the quarter — a 94% year-over-year increase. The company's shares are up by 173% year to date.

• Elon Musk's xAI is reportedly close to unveiling a chatbot app similar to OpenAI's ChatGPT.
• The app could arrive as soon as December, The Wall Street Journal reported.
• It would be another sign that Musk and xAI want to challenge OpenAI directly.

Elon Musk's xAI is reportedly planning an app that could expand its chatbot's reach to a much wider audience and take on ChatGPT.

xAI could release the chatbot app as soon as December, The Wall Street Journal reported on Wednesday. The company did not immediately respond to a request for comment from Business Insider.

The app, if it materializes, would be another sign that xAI and Musk are trying to take on ChatGPT-maker OpenAI. Musk co-founded OpenAI but left the company in 2018. He has sued OpenAI and cofounder and CEO Sam Altman twice, most recently alleging he was "deceived" into confounding the company.

Musk founded xAI last year. Since then, the company has provided services to his other ventures, such as AI customer support for Starlink, and Grok, a chatbot only available to paid subscribers of X, the social network formerly known as Twitter that Musk acquired in 2022. A chatbot app would be its first product offered directly to consumers.

xAI's valuation has hit $50 billion, the Journal reported earlier this month. The artificial intelligence startup is now worth more than the $44 billion that Musk paid to acquire X.

Investors who backed Musk's acquisition of Twitter have registered losses on paper since the deal. On Wednesday, the Financial Times reported that Musk gave a quarter of xAI's shares to those investors, a move that could make up for those losses.

xAI's valuation is still smaller than that of OpenAI, which was last valued at $157 billion in its latest funding round in October. It also generates less revenue. xAI is "on pace to surpass $100 million annually," the Journal reported on Wednesday. OpenAI, meanwhile, expects revenue of $3.7 billion in 2024, the Journal reported earlier.

• LinkedIn cofounder Reid Hoffman hopes a second Trump term can usher in an era of AI innovation.
• In a recent op-ed for The Financial Times, he shared several concerns he has for the administration.
• Hoffman warned that Elon Musk shouldn't use his relationship with Donald Trump to boost xAI.

LinkedIn cofounder Reid Hoffman said Elon Musk has a "serious conflict of interest" when it comes to guiding a second Trump administration on AI policies in the US.

In an op-ed published Friday with The Financial Times, Hoffman said the advisory role Musk has taken up with Donald Trump could pose a conflict of interest if the xAI founder is guiding the president-elect on laws around artificial intelligence.

"With direct ownership in the fledgling AI start-up xAI, Elon Musk, who is advising Trump in many domains, has a serious conflict of interest in terms of setting federal AI policies for all US companies," Hoffman wrote. "Using his position to favor xAI in any way, such as awarding it government contracts, encouraging federal agencies to unfairly target AI companies, or imposing new regulations that limit exports will come at the expense of US technological, economic and cultural security and competitiveness."

Musk did not respond to a request for comment. Hours after the FT published the op-ed, Musk responded to an X post unrelated to Hoffman's column, criticizing people who post on LinkedIn.

"I instantly lose respect for anyone who posts on LinkedIn," he said. "Unbearably cringe."

Hoffman, who is also the cofounder of Inflection AI, shared his hopes and concerns for Trump's second term in the FT op-ed.

Hoffman credited the Biden Administration for leaving behind a "strong Democrat-engineered economy" and said he was hopeful that Trump could build on it, ushering in more business investments and technological innovations around artificial intelligence.

But he also warned that a Trump White House could stifle innovation by being unwilling to work with US global allies to develop technology such as AI.

"While Trump campaigned on the promise of making America more unilateral and insular, I continue to believe a pluralistic, multilateral approach is what creates innovation and prosperity in an increasingly networked world," Hoffman said. "That extends to AI. In contrast, I expect the administration will adopt a mercantilist AI policy that will bar long-standing global allies from accessing US models, infrastructure, and technology."

A spokesperson for Trump's transition team did not respond to a request for comment.

Hoffman and Musk have a bitter rivalry that dates back to the PayPal days in 2000, when Musk's online banking company at the time, X.com, merged with Confinity, a security software company, to become PayPal.

The two CEOs have recently been more public about their rivalry, particularly over political disputes. Musk, who has gradually shifted to the Republican Party over the years, has been a vociferous supporter of Trump. Hoffman supported Vice President Kamala Harris' campaign.

After Trump's victory on November 5, Musk has already been spending a lot of time in Trump's orbit and has been tasked to lead a new Department of Government Efficiency focused on reducing the size of the federal government.

Hoffman did not respond to a request for comment.

• Elon Musk's AI startup xAI has been valued at a reported $50 billion, 16 months after its founding.
• It hit the milestone nearly nine years faster than it took rival OpenAI to cross the threshold.
• The funding round widens the valuation gap between xAI and its rivals like Anthropic and Perplexity.

Elon Musk has a certified rocketship in his hands — and, no, we're not talking about SpaceX.

One of his other companies, his artificial-intelligence startup xAI, has catapulted from launch just 16 months ago into an AI company now worth a reported $50 billion.

The chart below underlines just how rapid xAI's rise has been.

So how does that $50 billion compare to the competition?

It took OpenAI, last valued at $157 billion in October, about nine years to reach the $50 billion milestone, according to PitchBook data.

Elon Musk, starting with a team of 12 people in July 2023, did it in less than a year and a half.

The $50 billion valuation furthers the valuation gap between xAI and smaller rivals like Anthropic (valued at $19 billion) and Perplexity (valued at $2.8 billion), and has it approaching the market cap of companies like the fast-fashion giant Shein, which was valued at $66 billion last year.

It's also a testament to the high level of investor interest in the so-called Musk economy of companies he oversees — and his ability to raise vast sums of money quickly (also see the billions in funding Musk quickly put together to support his acquisition of Twitter).

The startup, which created the AI chatbot Grok and the large language model Grok-2 that underpins it, recently set up an AI data center brimming with Nvidia H100 chips. Musk said the process took 122 days — and the startup plans to double the number of AI chips in the center in the coming months.