Here's something I bet you didn't know. About xAI.
But first, what we do know: that Elon Musk bought the "social media company formerly known as Twitter" for $US 44 billion in 2022, renaming it "X".
We marvelled that one man could put out $44 billion as if it was chump change. Because he was annoyed that Twitter had banned his favourite satirical account, The Babylon Bee.
Many, on the Right, celebrated the purchase. A win for Free Speech. A win for balance in the social media space.
Many, on the Left, mourned the purchase. They wished Musk ill. They encouraged advertisers to abandon the site. They called it every name under the sun, "a cesspit", "a right-wing sewer". Some abandoned the site altogether.
Well, I'm glad to say that Elon Musk has proved the naysayers wrong.
X is currently profitable. It makes $1.7 billion EBITDA on sales of $2.7 billion. That's a Gross Margin of 46%, fabulous for any company, about normal for many software based companies, which are highly scalable. That is, where increasing revenues don't lead to increased costs. Which means that increased revenue flows through to the bottom line.
There's about $1 billion in annual interest payment on debt, giving Net Income of $700 million, or 26% Net Income. Still not at all shabby.
Revenues are rising as advertisers return -- Apple and Amazon, for example. Premium subs ($300 a year) are now 15% of revenues and rising. I would guess that the value of the total company X is now back to its purchase price, probably more. And certainly will become more. As people realise it's the only serious game in town for what it does -- instant short posts -- and has added functionalities since Elon bought it.
But that's not the main bit of what I guess you don't know. I didn't know, till just now. Namely that Musk's AI company -- xAI -- is valued at around $50 billion.
I learned that because I now use Grok a lot -- the AI search engine on X Premium. Grok-3 is great. It's built by xAI. From there I learned that X has a 10% stake in xAI, worth $5 billion. i.e. in total worth $50 billion.
xAI? I knew about it, as I'm a long-time Musk fan-boy. But I didn't know how quickly it's grown and what its value now is.
xAI, to refresh, is a company Elon Musk established in 2023, with just 12 staff. Today, barely 2 years later, it's got around 1,200 staff and is worth around $50 billion. That, apparently, is a record growth. Even in frenetic tech in frenetic US.
So, there you have it. Elon Musk spent $44 billion on X. His naysayers were hoping he'd fail, but he didn't. He made it better and worth more than when he bought it.
And, just as an aside, while running and inspiring his other companies, SpaceX, Tesla, the Boring Company, Neuralink, the drama of Twitter-X purchase, then helping out on Trump's campaign and setting up DOGE, in the midst of all that, he created a company which went from zip to 50 Billion in two years! A Super Unicorn! Way to go! What an amazing man.
Grok:
xAI went from a 12-person startup in 2023 to a $40+ —some reports say $50 billion—billion AI contender in under two years, outpacing rivals like Anthropic ($19 billion) and closing in on OpenAI ($157 billion). Its financial condition looks robust—flush with cash, aggressively expanding—but opaque revenue and hefty spending make its net position a calculated bet rather than a proven profit machine. Musk’s “Muskonomy” halo (Tesla, SpaceX, X synergies) keeps the money flowing, but it’s a high-stakes play in a crowded AI race.
The "Muskonomy" (first time I've seen the word) is the cites he's building in Texas. Like this one, Snailbrook, in Bastrop County Texas.
