Two years after Elon Musk bought Twitter for tens of billions of dollars, the value of the social media platform might be on the up and up again.
Fidelity has raised the value of its stake in the company, now known as X, by 32.37% in October, Axios reports — the largest monthly hike since October 2022. Despite the increase, Fidelity still believes X is worth 72% less the $44 billion Musk paid for it.
As of November 2023, X was worth $12.5 billion. The site has lagged in both user growth and dollar value since Musk’s acquisition. Major advertisers, including Walmart, IBM (IBM+0.80%), and NBCUniversal (CMCSA+1.14%), began leaving the site over concerns about hate speech on the platform last year, including Musk’s apparent endorsement of an antisemitic post.
Following the presidential election, the site saw its biggest wave of deactivations in years as users fled to left-leaning competitor, Bluesky.
Fidelity’s valuation hike is owed in large part to one of Musk’s other companies: his artificial intelligence startup and OpenAI competitor, xAI. Not only is that firm, which Musk founded in March 2023, reportedly worth some $50 billion, but it also has a somewhat symbiotic relationship with X.
While the likes of OpenAI, Google, and Microsoft are forced to strike deals with newspapers, authors, visual artists, and more to train their generative AI tools, xAI uses posts on the social media platform to train its chatbot, Grok.
Disclosures obtained by Axios also show that Fidelity invested in xAI’s $6 billion funding round earlier this year, marking it up 70% for the first time last month.
X has also seemingly become more valuable as Musk’s own status has risen. Already the world’s richest person, Musk has become a top ally to President-elect Donald Trump — and leveraged X to do so.
Musk has shared a litany of political posts taking aim at the Democratic Party and in support of Trump to his more than 206 million followers on the platform since first endorsing him back in June. The billionaire Tesla (TSLA+2.79%) CEO has showed he has considerable sway, both on social media and within Trump’s transition team.
Musk also pitched in a pretty penny to support Trump’s campaign. His recently-formed America PAC spent an estimated $200 million to help elect Trump, the Associated Press reports. America PAC raised $130 million between April and mid-October, according to campaign finance filings, most of which came from Musk.
Steve Bannon, who served as chief strategist for the first seven months of the first Trump administration, told Puck last week that the money was the reason Trump won.
In the weeks since, Musk has stayed close to the president-elect, sitting in on many of Trump’s meetings, including those with foreign ambassadors and candidates for the new administration. Several of Trump’s latest appointees are favored by Musk, including his pick to lead the Federal Communications Commission.
Musk will also lead the undefined “outside of government” Department of Government Efficiency alongside billionaire entrepreneur and former presidential candidate Vivek Ramaswamy. They will work with House and Senate Republicans, including Rep. Marjorie Taylor Greene of Georgie and Sen. Joni Ernst of Iowa, as well as federal agencies.
DOGE, a reference to Musk’s favorite cryptocurrency of the same name, aims to slash trillions in government spending and wants to “delete” some federal agencies. Musk has proposed getting rid of the Consumer Financial Protection Bureau, while Ramaswamy mentioned cutting the IRS, FBI, and the Bureau of Alcohol, Firearms, and Tobacco on the campaign trail. Trump and other Republicans also want to scrap the Department of Education.
