Elon Musk (Craig T Fruchtman/Getty Images)

Musk’s xAI seeking a $50 billion valuation is a lesson in chutzpah

Musk is raising $6 billion for xAI at a nosebleed valuation, despite low revenue.

11/18/24 11:57AM

It’s a good time to fundraise for an AI startup: less than two months after OpenAI raised $6.6 billion at a $157 billion valuation, CNBC reported that Elon Musk’s AI startup, xAI, is raising $6 billion at a $50 billion valuation, with $5 billion to come from funds in the Middle East. The funding round is expected to close next week, CNBC said.

One interesting detail about this fundraise: xAI’s revenue is likely far below competitors OpenAI and Anthropic.

In October, The Information reported that OpenAI was on pace for $4 billion in 2024 revenue, driven mostly by ChatGPT. Previously The Information reported that Anthropic, the owner of generative-AI platform Claude, was on pace for $1 billion in annualized revenue, with the majority coming from API fees. At the time, Anthropic was looking to raise new funding at a $30 billion to $40 billion valuation.

Unlike these two competitors’ 10-digit revenue figures, xAI’s revenue is likely much, much lower. Until mid-October, when xAI added a tool to let developers create applications powered by its chatbot, Grok, the company’s only known revenue stream was X Premium subscriptions, which gave users access to Grok. On October 15, TechCrunch reported that X had made a total of $200 million from in-app purchases since X Premium was initially launched as Twitter Blue, meaning that any revenue cut earmarked for xAI is likely in the tens of millions, a far cry from the billion-dollar figures of its competitors.

But xAI does have a few things working in its favor.

The company claims it has the world’s largest data center in Memphis, Tennessee, which Nvidia CEO Jensen Huang called “easily the fastest supercomputer on the planet.” The company is also already integrated with social-media platform X, and there’s an opportunity for xAI to work with Musk’s other companies, like Tesla.

We can’t forget that Musk was one of OpenAI’s founders (he’s now suing the company), and his relationship with President-elect Trump could prove advantageous when it comes to new AI regulations.

Basically, a $50 billion valuation is as much a bet on Musk as it is on xAI.

Max Knoblauch1h

The Trump administration is reportedly planning a 50% made-in-America requirement for USMCA tariff relief

Qualifying for USMCA-related lower tariffs may soon require more US-made vehicle components, according to reporting by the Wall Street Journal.

The Trump administration is reportedly planning to introduce a 50% US content requirement for vehicles covered by the trade pact to receive lower tariffs. The content would be measured by cost, according to the WSJ.

There currently isn’t any US-specific requirement for those lower tariff rates, but in order to receive preferential tariffs, vehicles are must contain at least 75% regional content (components made in North America). Per Reuters reporting, the Trump admin is seeking to raise the Regional requirement to 82%.

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Overall, Tesla will likely have the easiest time qualifying for any stricter requirements. The automaker’s vehicles contained the highest amount of US/Canadian content in 2025, according to American University research. Ford, GM, and Stellantis all scored lower. Notably: the underlying government data that many domestic content measurements rely on intentionally combines US and Canadian components, so it’s difficult to know exactly how much of any given vehicle is specifically US-made.

Exclusive | Trump Administration Wants Autos Under USMCA to Be at Least 50% Made in America

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Tom Jones8h

The $640,000 Luce makes the average Ferrari look like a bargain

Put aside the shape; put aside the smoothing out of Ferrari’s iconic sharp edges; put aside, even, the calls from former Chairman and President Luca Cordero di Montezemolo to “take the Prancing Horse off.” On the grounds of price alone, Luce detractors might have a point.

By now, many of us will have read the criticisms of Ferrari’s first fully electric vehicle, as the Luce — which was unveiled to the world earlier this week and promptly saw the company’s shares crash out in New York and Milan — gets subtly shaded by competitors online and not-so-subtly shaded by basically everyone else.

What makes all of this worse for Ferrari is that, even by the luxury car maker’s notoriously high standards, they’ve slapped a pretty hefty price tag on the Luce, and the company’s CEO, Benedetto Vigna, has already been forced to defend the €550,000 ($640,000) price point, saying yesterday that it’s “fair to pay for innovation,” per Reuters.

While Ferrari’s cars have been getting more expensive of late, as recently as 2022, Ferrari’s average revenue per car sold was around $340,000. At nearly twice that price, this new electric model is obviously proving a little much (visually, conceptually, and financially) for many loyal and long-standing fans of the Prancing Horse to stomach.