Elon Musk’s xAI could become the fourth hectocorn, as it seeks $113 billion valuation in small share sale

When venture capitalist Aileen Lee coined the term “unicorn” in 2013 to refer to those rare, near-mythical startups worth more than $1 billion, she probably didn’t foresee a future where more than a thousand of them stalked the land.

In 12 short years, however, that’s exactly what’s happened: data from CB Insights reveals that some 1,283 startups have reached a valuation requiring the use of a third comma, 705 of which are from the United States — more than the rest of the world combined.

Now, the rarest of the rare aren’t unicorns, or even decacorns, but “hectocorns”: private companies that investors have valued at more than $100 billion. Elon Musk, fresh off the back of a short-lived, long-felt political career, is hoping that his artificial intelligence firm xAI will join that elite club, with the Financial Times reporting that the company is looking to raise a $113 billion cap.

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That would make the barely 2-year-old entity the fourth-most-valuable startup in the world, behind TikTok parent company ByteDance, OpenAI, and another Musk venture, SpaceX.

The small secondary offering — worth just $300 million, or ~0.26% of the company’s value — will offer investors the chance to buy shares from employees, giving liquidity to some of its earliest stakeholders. A larger primary offering is expected to follow the $300 million tender offer.

If the proposed valuation holds, it would be a substantial uplift from the $33 billion price tag that the company acquired X (Musk’s social media platform, formerly known as Twitter) for in March.