Elon Musk's Private AI Ventures Soar in Value, Outpacing Tesla's Decline

Musk's private firms enjoy 45% valuation rise since US election - Bloomberg By Investing.com

Investing.com -- Since the US election on November 5, secondary market investors have increased the collective valuation of four of Elon Musk's private companies by 45%, according to an exclusive analysis shared with Bloomberg by trading platform Caplight. This contrasts with the recent downward trend of Musk's public company, Tesla (NASDAQ:TSLA) Inc. The four private companies, SpaceX, Neuralink Corp., the Boring Company, and xAI, have seen their estimated daily share price rise, based on aggregated secondary transaction data and other indicators such as buyer interest. The majority of these gains are attributed to xAI, Musk's artificial intelligence lab designed to compete with OpenAI. Caplight's data reveals that the xAI share price has seen a substantial increase of 110% since November 5.

Elon Musk's private companies SpaceX, xAI see values soar since...

Tesla's stock has taken a nosedive since Donald Trump was elected president -- but Elon Musk's privately held firms have seen their valuations soar, according to a report. Investors in secondary markets have driven up the collective valuation of four of Musk's privately held companies by 45% since the Nov. 5 election, according to an analysis from trading platform Caplight which was cited by Bloomberg News. Caplight's research compiles secondary transaction data and other market indicators, including buyer interest, to estimate a daily share price for Musk's ventures: SpaceX, Neuralink Corp., the Boring Company and xAI. The artificial intelligence startup xAI has been the biggest driver of these gains, with its share price surging 110% since Nov. 5, according to Caplight's findings. Recent talks between xAI and potential investors have suggested a valuation of $75 billion for the company. However, Caplight estimates that xAI, which is touting its flagship chatbot "Grok" as one that can rival OpenAI's ChatGPT and the Chinese-based DeepSeek, was trading in secondary markets at a valuation of $96 billion as of Tuesday -- or 110.1% higher since the Nov. 5 election. Shares of Neuralink, Musk's brain chip implant company, were trading on the secondary market at a valuation that was 25% higher as of Tuesday compared to Nov. 5. In its last known fundraising round in 2021, Neuralink raised $205 million, valuing the company at approximately $2 billion. By mid-2023, secondary market transactions indicated a valuation of around $5 billion. More recently, Forge Global estimated Neuralink's valuation at approximately $9.32 billion. Last year, Reuters reported that some Neuralink staffers were making preparations to sell the brain implant company's stock in the wake of its valuation jumping following its first human trial. These valuations reflect investor enthusiasm and the company's progress in developing brain-computer interface technology. The trading platform provides investors with access to these four Musk-led enterprises, alongside Tesla, in what it calls the "Elon Musk Crossover Index." Caplight omitted Musk's social media platform, X, from its analysis due to what it described as "very limited" secondary market activity, according to Caplight CEO Javier Avalos. Secondary transactions enable investors to purchase stakes in private companies, often through early employees or venture backers selling their shares. This method has become increasingly popular in Silicon Valley as large venture-backed firms, such as SpaceX, delay public offerings. Because secondary investors typically have little access to private companies' financial data, these share price estimates reflect investor sentiment more than actual business performance. However, within Musk's portfolio, SpaceX continues to attract buyers willing to pay a premium over the company's most recent tender offer price, Avalos noted. Another secondary trading platform, Augment, reported similar trends. As of March 12, Augment users noticed that shares of SpaceX and xAI had more than doubled since the election. Not all Musk ventures have seen a surge in value. The Boring Company, his tunnel-digging enterprise, experienced a 7.8% decline in secondary market valuation since the election. Despite secondary market dynamics, Musk has maintained strong investor interest in X. While the platform has faced challenges such as advertiser pullbacks and financial instability -- highlighted by significant writedowns from Fidelity Investments -- X was exploring new funding at a $44 billion valuation -- the same amount Musk paid for the company when it was known as Twitter in 2022. Following Donald Trump's election victory, Tesla's stock initially surged as investors anticipated Musk's close ties to the administration would benefit the automaker. However, production setbacks and public criticism over Musk's role as head of the cost-cutting Department of Government Efficiency (DOGE) have led to a reversal of Tesla's post-election gains. On Dec. 17, Tesla's share price hit an all-time high of nearly $480 -- but since has plummeted by almost 50%. As of Wednesday afternoon, Tesla stock was trading at around $246 a share. Musk owns 13% of Tesla and a majority of his wealth is tied up in his privately held companies, according to Bloomberg Billionaires Index. As of Wednesday, more than a third of Musk's net worth -- $136 billion -- stems from his holdings in SpaceX. Musk's wealth ballooned to an all-time high of $486 billion in mid-December, but it has since fallen by more than a third to $307 billion as of Wednesday. In private markets, Musk remains selective about who can invest in his companies. An increasing number of investors are gaining exposure through special purpose vehicles (SPVs), which allow them to pool capital and participate in secondary transactions. According to Caplight, SPVs made up 12% of the secondary transaction volume the firm measured at the beginning of 2023. By the final quarter of 2024, that figure had climbed to 43%, indicating growing investor interest in Musk's private ventures.